KUALA LUMPUR: Hong Leong Financial Group reported a net profit of RM455.25mil compared to RM386.12mil in the year-ago quarter as it recorded stronger contribution from both commercial banking and insurance bsinesses.
"Our core business businesses continue to show strong credit and liquidity risk metrics which are important in these times," said group president and CEO Tan Kong Khoon.
The group's commecial banking division, Hong Leong Bank, saw 15.7% growth in profit before tax to RM780mil due to higher net interest income and a 65% surge in associate contribution to RM147.8mil from the Bank of Chengdu.
The group said net interest income expanded 10.5% on-year to RM886mil in 1QFY18 amid improved loan growth and net inerest margin.
Residential mortgages grew 9.9% y-o-y to RM58bil while loans to SMEs rose 6.5% to RM20.6bil.
Gross impaired loans ratio stood at 0.98% while loan impairment coverage was 96%.
Meanwhile cost/income ratio imrpved to 43% as revenue growth outpaced expense growth.
The bank's capital position remained robust, with Common Equity Tier 1, Tier 1 and Total Capital Ratios at 12.9%, 13.3% and 15.3% respectively as at Sept 30.
For the group's insurance division, HLA Holdings Sdn Bhd recorded a pretax profit of RM60.6mil, rising 13.1% on-year due to lower actuarial reserves arising from higher interest rates and business growth.
Hong Leong Assurance Bhd's new business premium within its target segment of regular premiums increased 9.2% to RM139.3mil in 1QFY18.
"We continued to make significant progress in growing our non-participating share of new business," it said.
"The focus remains on growing and improving the quality of HLA's premium base, increasing profitability drivers as well as growth across multiple distribution channels."
Meanwhile, the investment banking division, Hong Leong Capital Bhd
, recorded a steady pretax profit of RM18.4mil in 1QFY18.
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