KUALA LUMPUR: Hong Leong Bank Bhd
wrapped its 2026 financial year (FY26) with a resilient financial performance, driven by sustained topline growth, strategic cost management and solid asset quality.
The bank said net profit in FY26 rose to RM4.53bil from RM4.27bil in the previous year as revenue rose to RM6.69bil from RM6.4bil previously.
Operating profit during the year was 6.6% higher y-o-y to RM4.18bil while pre-tax profit rose 2.2% to RM5.48bil.
The moderation in growth rate was owing to lower profit contribution from associated company, Bank of Chengdu Co, Ltd (BOCD) following the natural dilution of the bank’s stake in BOCD with the completion of its convertible bonds’ conversion, alongside FX translation impact from a stronger ringgit.
For the fourth-quarter (4Q), Hong Leong Bank's net profit was RM1.24bil as compared to RM1.09bil in the preceding-year quarter, while revenue climbed to RM1.76bil from RM1.62bil in the comparative quarter.
The board of directors declared a final dividend of 80 sen per share. The entitlement and payment dates will be advised at a later time.
Over the 12-month period, the bank's improved performance was driven by strong momentum in gross loans, advances and financing, which registered 7.7% growth year-on-year (y-o-y) to RM226.3bil, underpinned by expansion in the key segments of mortgage, auto loans, SME and commercial banking, as well as key overseas markets.
Net interest margin stood at 1.84% as a result of loans/financing portfolio
expansion and strategic funding cost management.
Meanwhile, the bank's non-interest income rose 9.3% y-o-y on the back of scaling wealth management business and global markets franchise sales, improving the non-interest income ratio to 24%.
Operating expenses during the year yielded positive JAWS through continuous emphasis on Artificial Intelligence (AI) integration and strategic cost management initiatives, achieving a sustainable cost-to-income ratio (CIR) of 37.6%.
Customer deposits in FY26 were up 5.5% to RM252.1bil while current account savings acocunt (Casa) grew 11.3% y-o-y to RM87.4bil. Casa ratio rose to 34.7%.
Moving forward, the bank said it will pursue growth opportunities with prudent risk management and balance sheet discipline as our foundation.
"We will continue to invest in our digital and AI capabilities, alongside strategic alliances that enhance our business strengths and broaden our offerings.
"Sustainability remains an integral part of our long-term strategy, with environmental, social and governance considerations integrated into our business practices as we strive to create enduring value for our customers, communities and stakeholders," said group managing director and CEO Kevin Lam in a statement.
Meanwhile, Hong Leong Bank's parent company, Hong Leong Financial Group Bhd (HLFG), reported its strongest net profit of RM3.43bil in FY26, up from RM3.25bil in FY25, on the back of stronger performances across its three business franchises.
The group reported revenue of RM7.6bil in FY26 as compared to RM7.22bil.
It declared a final dividend of 57 sen a share.
"Looking ahead, HLFG will remain vigilant through proactive risk management in navigating the prevailing uncertainties from the ongoing geopolitical conflicts in the Middle East and evolving protectionist trade policies.
"The group will continue fortifying our business franchises to adapt to an evolving operating landscape while actively pursuing new growth opportunities for sustainable expansion," said president and CEO Tan Kong Khoon in a statement.
