Hong Leong Bank quarterly net profit rises

The banking group reported slightly lower revenue of RM1.39bil for the first quarter.

PETALING JAYA: Hong Leong Bank Bhd kickstarted its new financial year with a set of encouraging results, underpinned by growth in its loans and financing portfolio.

“Amid ongoing external headwinds and volatility in global markets, we remain vigilant and resolute in executing our strategic priorities and driving our continued business expansion,” said group managing director and chief executive officer (CEO) Kevin Lam in a statement.

“We will continue our efforts in elevating our customer experience by providing customer-centric banking solutions that anchor on our brand promise of ‘Built Around You’.”

In the first quarter ended Sept 30, 2023 of financial year 2024 (1Q24), Hong Leong Bank recorded a net profit of RM1.03bil, an improvement from RM981.41mil in the same 2022 quarter, representing an increase in earnings per share to 50.26 sen from 47.91 sen previously.

The banking group reported slightly lower revenue of RM1.39bil during the quarter under review from RM1.5bil in the previous comparative quarter.

Consequently, the group registered a higher return on equity of 12.1% for the quarter.

This was attributed to strong loan and financing expansion, sustained non-interest income and improved asset quality metrics, coupled with solid contributions from associates.

Total income in 1Q24 was RM1.39bil with net interest income improving 3.4% quarter-on-quarter (q-o-q) to RM1.3bil and net interest margin rising to 1.84% from 1.83% in the preceding quarter.

Non-interest income in 1Q24 was sustained at RM268mil with a non-interest income ratio of 19.2%.

Operating expenses, meanwhile, stood at RM556mil while cost-to-income ratio remained healthy at 39.9%.

During the quarter, the group’s gross loans and financing portfolio grew 7.2% to RM181.7bil led by growth across its mortgage, auto loans, small and medium enterprise, and commercial banking segments, as well as overseas operations.

Customer deposits rose 6% year-on-year (y-o-y) to RM209.2bil with current account savings account standing at RM61.9bil.

Meanwhile, the bank’s parent company, Hong Leong Financial Group Bhd (HLFG), announced its own net profit of RM741.65mil for the quarter, up from RM669.47mil in the previous corresponding quarter.

Basic earnings per share in 1Q24 rose to 65.4 sen from 59 sen in the previous comparative quarter.

Revenue, meanwhile, was lower at RM1.57bil compared to RM1.6bil in the previous corresponding quarter.

HLFG president and CEO Tan Kong Khoon said the positive performance was testament to the resilience of its operating companies despite the turbulent economic environment posed by elevated interest rates and volatile market conditions.

Separately, Hong Leong Capital Bhd (HLCB) recorded a net profit of RM22.7mil in 1Q24, an increase of 41.8% y-o-y.

This was mainly due to better performance in proprietary investment and higher profit contribution from its key operating subsidiary, Hong Leong Investment Bank Bhd.

“As at Sept 30, 2023 the book value per share decreased to RM3.99 from RM4.09 as at June 30, 2023, after declaration of a final single-tier dividend of 17 sen for the financial year ended June 30, 2023,” it said.

HLCB is an investment holding company of the investment banking and asset management business group under HLFG.

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