KUALA LUMPUR, Nov 28 — Hong Leong Bank Bhd’s net profit rose 5.8 per cent to RM1.09 billion in the first quarter ended Sept 30, 2024 (1Q FY2025) from RM1.03 billion in the same period last year.
The bank said in a filing with Bursa Malaysia today that the performance was underpinned by its robust loans or financing growth, improved non-interest income, and stable contributions from its associates.
Revenue climbed to RM1.60 billion from RM1.39 billion previously, driven primarily by a rise in net interest income and non-interest income and a higher share of profit from associated companies.
Group managing director and chief executive officer (CEO) Kevin Lam said the bank’s gross loans and financing portfolio grew 6.9 per cent year-on-year (y-o-y) to RM194.2 billion, contributed by expansion in its mortgage, auto loans, small and medium-sized enterprise (SME) and commercial banking segments.
“We continue to monitor our asset quality in line with our prudent risk management culture and tight credit underwriting process, ending the first quarter with a solid gross impaired loan (GIL) ratio of 0.54 per cent and loan impairment coverage (LIC) ratio of 145.5 per cent,” he said.
According to the bank, its total income for 1Q FY2025 increased 14.6 per cent y-o-y growth to RM1,598 million, and net interest income grew 10.5 per cent y-o-y to RM1.24 billion, as a result of solid loans and financing growth and effective asset and liability management.
The bank’s net interest margin (NIM) rose eight basis points y-o-y to 1.92 per cent.
Hong Leong Bank’s non-interest income (NoII) surged 32 per cent y-o-y to RM354 million with a non-interest income ratio of 22.1 per cent, complemented by healthy fee income, higher realised investment income and improved foreign exchange gains.
Moving forward, Lam said the bank will continue to double down on its digital capabilities, foster strategic partnerships and develop a world-class talent pool to drive the growth of the bank’s core businesses and build a strong ASEAN franchise.
Hong Leong Bank is a subsidiary of Hong Leong Financial Group Bhd (HLFG).
Separately, HLFG saw its net profit rise 14.3 per cent to RM847.67 million in 1Q FY2025 from RM741.65 million previously due to higher contributions from the banking and insurance divisions.
Its revenue surged to RM1.89 billion from RM1.58 billion previously.
President and CEO Tan Kong Khoon said the group’s strong 1Q FY2025 performance was led by its growing topline, which increased by 20.0 per cent y-o-y.
“This is evident by the group’s robust NoII growth of 46.7 per cent y-o-y, following fee-income expansion initiatives and investment gains, especially in the insurance segment.
“We also saw positive results from NIM recovery efforts and continued above-industry loan growth, resulting in sustained net interest income growth of 10.2 per cent y-o-y,” he said.
HLFG’s unlisted insurance arm, HLA Holdings Sdn Bhd’s (HLAH) pre-tax profit rose 142.3 per cent y-o-y to RM237 million in 1Q FY2025 on stronger investment income and higher net insurance service results.
Its investment banking and asset management division, Hong Leong Capital Bhd, however, saw its pre-tax profit lower by 20.5 per cent y-o-y in 1Q FY2025 due to delays in the completion of mandated deals, mark-to-market decline in valuation of hedging instruments and lower equity investment returns.
Moving forward, Tan said the group anticipates Malaysia’s positive economic momentum will carry into the year 2025 but is mindful of downside risk and external headwinds stemming from evolving geopolitical and trade tensions between major economies.
“We will continue to uphold our sound loan monitoring and management of credit risk while exercising prudent cost control and investment in operational resiliency and digital capabilities across the group,” he said.
Both Hong Leong Bank and HLFG did not declare any dividends for the quarter under review. — Bernama
