Hong Leong Bank group managing director and CEO Domenic Fuda said the favourable set of results were due to solid top-line performance, sustained margin and improved efficiency while its associates' contribution recovered.
KUALA LUMPUR: Hong Leong Bank Bhd
posted a strong set of earnings in the financial year ended June 30, 2017 at RM2.14bil, up 12.7% from the RM1.90bil a year ago and it expects the brighter economic growth outlook to spur the moderate growth in loans and deposits.
It reported on Thursday that revenue rose 8.9% to RM4.55bil – the highest level since the merger with EON Bank -- from RM4.17bil a year ago. It rewarded shareholders with a dividend of 30 sen a share.
For FY17, gross loans and financing rose to RM125.10bil, underpinned by the domestic retial, SME and international operations.
In the final quarter, its earnings fell 13.5% to RM482.92mil from RM558.54mil. Revenue was however higher at RM1.15bil from RM1.08bil. Earnings per share were 23.61 sen compared with 29.28mil.
Commenting on the FY17 results, group managing director and CEO Domenic Fuda said the favourable set of results were due to solid top-line performance, sustained margin and improved efficiency while its associates' contibution recovered.
He said Hong Leong Bank recorded a new milestone as its operating profit for FY17 jumped 21.6% on-year to RM2.54bil, “the highest ever attained in the past five years”.
Fuda said net interest income grew in the fourth quarter, underpinned by a 11.6% on-year growth to RM864mil – and helping to push on-year growth by 9.1% to RM3.35bil for FY17.
Non-interest income for FY17 rose 8.4% on-year to RM1.196bil as it benefited from stronger wealth management fees, dividend income from investments and higher gains from treasury operations. Non-interest income ratio for FY17 was at 26.3%, refeflecting the banking group's move to diversify the bank's income.
Gross loans, advances and financing expanded 3.8% on-year to RM125.1bil, especiually in the domestic retails and SME as well as overseas operations.
Domestic loans to the retail segment underpinned the bank's loan growth and led by residential mortgages. These mortgages rose 10.4% on-year to RM56.9bil while there was decline in transport vehicles loans at RM17.6bil due to soft industry growth. Credit card receivables rose 6.5% on-year to RM4bil in 2017.
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