Hong Leong Bank posts improved net profit of RM2.12bil in 1HFY24

KUALA LUMPUR: Hong Leong Bank Bhd reported a stronger bottomline in the first six months of the financial year, underpinned by continued strong loans/financing expansion, improved non-interest income and contributions from its associates.

Reviewing the bank's results for the period, group managing director and CEO Kevin Lam said net profit in 1HFY24 rose to RM2.12bil from RM2.02bil in the same year-ago period, with earnings per share expanding to 103.34 sen from 98.78 sen previously.

The board of directors declared an interim dividend of 25 sen per share, payable on March 26, 2024.

For the period under review, the bank reported gross loans and financing portfolio grew 7.5% year-on-year (y-o-y) to RM185.2bil, led by growth across mortgage, auto loans, SME and commercial banking segments as well as overseas operations.

"We consistently monitor our asset quality and place strong emphasis on our credit underwriting process, as evidenced by a stable GIL ratio of 0.56% and a sufficient LIC of 163.4%," said Lam in a statement.

Meanwhile, the bank's revenue during the period dropped to RM2.86bil from RM2.99bil in the year-ago period.

In 2QFY24 alone, net profit was higher at RM1.09bil from RM1.04bil it posted in the year-ago quarter while revenue slipped to RM1.46bil against RM1.49bil previously.

According to the bank, its net interest income in 1HFY24 fell to RM2.28bil due to funding cost pressure although it was partially mitigated by expansion in loans/financing portfolio and effective asset/liability management.

The net interest margin (NIM) in 1HFY24 stood at 1.85%.

Non-interest income (NoII) in 1HFY24 grew 3.7% to RM577mil with an improved NoII ratio of 20.2%.

"This was mainly supported by higher wealth management income in line with our wealth expansion plan and growth in credit card-related fees as economic recovery translates to stable consumer spending growth, coupled with improvement in foreign exchange gain during the period," said the bank.

It said operating expenses in 1HFY24 was RM1.13bil while the cost-to-income ratio (CIR) for the period was sustainable at 39.7%.

Meanwhile, customer deposits in 1HFY24 rose 6.2% y-o-y to RM211.2bil with current account savings account (Casa) expanding 5.8% y-o-y to RM65.8bil. The Casa ratio stood at 31.1%.

Lam said it remains crucial to build world-class digital capabilities and continue to support and enable our employees to develop to their greatest potential.

"In line with our carbon-neutral ambition, we will continue enhancing our ESG strategies and practices, while working with our stakeholders to create positive impact across our customers, communities and environment," he said.

In a separate statement, Hong Leong Financial Group Bhd, the parent company of Hong Leong Bank, registered a net profit of RM1.57bil in 1HFY24 as compared to RM1.48bil in 1HFY23, while revenue was lower at RM3.23bil against RM3.35bil.

The group declared a dividend per share of 18 sen, which amounts to a payout of RM204.9mil.

Group president and CEO Tan Kong Khoon said the group is maintaining a cautious stance given the continuing macroeconomic uncertainty, although it anticipates the economy to remain resilient driven by domestic demand and the government's economic initiatives.

"The group’s sustained 1HFY24 financial performance is a positive reflection of the strong fundamentals and growing momentum in all segments of our business.

"Strong asset quality, stringent cost controls and higher contributions from our associates contributed to improved profitability," he said.

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Hong Leong Bank , HLFG , finance


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