KUALA LUMPUR: Hong Leong Bank Bhd
(HLB) posted Q2 earnings of RM683mil, a 24.2% increase over the year-ago quarter, backed by solid income growth, stable margins, cost control and recovery from associates' contributions.
For the six months period to Dec 31, 2017, the bank recorded 21% higher earnings of RM1.32bil over the year-ago period. HLB's board has declared an interim dividend of 16 sen per share with ex and payment dates on March 12 and 28 respectively.
According to a statement issued to the press, HLB's total income for the quarter under review was a 4.2% increase to RM1.23bil from RM1.18bil a year earlier, anchored by disciplined asset-liability management and stable franchise-led non-interest income contributions
This brought revenue in the six months period 5.8% higher to RM2.41bil.
Net interest income grew for the seventh consecutive quarter to RM896mil, representing a 7.6% increase year-on-year.
"Consequently for HIFY18, net interest income was 9% higher at RM1,782mil compared to the corresponding period last year."
Non-interest income was RM625mil, representing a non-interest income ratio of 26%, underpinned by robust contribution from wealth management income and stable treasury operations income.
There was also improved cost-to-income ratio of 42.5% for the six months period as operating expenses was better managed from digitisation and strategic cost-management efforts.
"Operating profit for H1FY18 expanded 7.8% y-o-y to RM1,384 million versus RM1,284 million for the same period last year."
"In line with our strategy of being digital at the core, we remain focused in executing our digital strategy which includes strengthening our digital offerings, transforming our products and services as well as improving our engagement with our customers.
"We will continue to grow our domestic franchise and regional businesses through our multi-channel banking approach," said Hong Leong Bank group managing director and CEO Domenic Fuda.
HLB said overall loan growth was driven by expansion in the mortgages, SME and overseas operations segments, although this was partially offset by unscheduled corporate loans repayments.
"Gross loans, advances and financing growth expanded 1.8% y-o-y to RM125.bil in H1FY18 on the back of moderate industry credit growth as well as still cautious business sentiments."
Customer deposits for H1FY18 increased 3.1% to RM155.3bil, supported by strong CASA growth of 9.3% on-year to RM41.3bil, which gave rise to an improved CASA mix of 26.6%.
"The bank's stable funding base continues to be supported by strong individual deposit based, represented by an industry leading mix of 54.3%."
The bank's associate, Bank of Chengdu, saw profit soar 111.7% y-o-y to RM273mil in H1FY18 and contributed 16.9% of the bank's pre-tax profit
Hong Leong Financial Group Bhd
Hong Leong Financial Group (HLFG) posted second quarter earnings of RM495.34mil versus RM443.03mil a year earlier on the back of improved contribution from Hong Leong Bank Bhd.
Group revenue in Q2FY18 was RM1.37bil versus RM1.35bil in the previous corresponding quarter. Meanwhile, revenue for the six months period was RM2.64bil over RM2.54bil a year earlier.
"Our core businesses continue to show strong credit and liquidity risk metrics. We have a clear and focused business and digital strategy, which we will continue to execute diligently and we remain focused on building long-term sustainable value for our shareholders," said HLFG president and CEO Tan Kong Khoon.
In the insurance diision, HLA Holdings Sdn Bhd's pretax profit fell 19.4% y-o-y to RM152.4mil in H1FY18, due to higher profits from a jump interest rates in the previous comparative period.
Meanwhile, the group said its investment banking division under Hong Leong Capital Bhd recorded a slightly lower pretax profit of RM37.4mil in H1FY18.
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