Hong Leong Bank records RM1.04bil net profit in 3Q

KUALA LUMPUR: Hong Leong Bank Bhd is cautiously optimistic over the business outlook and macroeconomics for the remainder of FY24 following the results of its recent quarter, said group managing director and CEO Kevin Lam.

“We are pleased with the underlying sound 9MFY24 performance led by sustained loans/financing growth, healthy asset quality, solidified with prudent funding and liquidity positions,” he said in a results announcement.

In the third financial quarter ended March 31, 2024, Hong Leong Bank posted a net profit of RM1.04bil, which was higher than RM929.96mil in the year-ago quarter, resulting in earnings per share growth to 50.97 sen form 45.39 sen.

The bank reported revenue of RM1.44bil, up from RM1.4bil in the comparative quarter.

Over the cumulative nine-month period, Hong Leong Bank registered a net profit of RM3.16bil against RM2.95bil in 9MFY23, while revenue was slightly lower at RM4.29bil as compared to RM4.38bil in the previous corresponding period.

The bank attributed the stronger bottomline to solid loans/financing growth, disciplined cost management and robust contributions from our associates.

“Consequently, this translates into a commendable ROE of 12%,” it said.

During the nine-month period, net interest income was sustained at RM3.46bil, with net interest margin (NIM) at 1.85%.

Non-interest income moderated to RM831mil due to lower trading and investment income as well as reduced forex exchange gain due to change in monetary policy stance in the US.

The bank said operating expenses remained stable for the quarter with a cumulative amount of RM1.71bil for 9MFY24. Accordingly, the cost-to-income ratio (CIR) for the period was commendable at 39.8%.

Gross loans, advances and financing expanded 7.8% y-o-y to RM187.8bil.

Customer deposits in 9MFY24 rose 4.7% y-o-y to RM212.4bil, with current account savings account (Casa) growth of RM65bil and a Casa ratio of 30.6%.

Separately, Hong Leong Bank’s parent company Hong Leong Financial Group Bhd said it recorded net profit of RM2.39bil in 9MFY24 as compared to RM2.22bil in 9MFY23, while revenue stood at RM4.93bil against RM4.99bil in the year-ago period.

It said in a bourse filing, its insurance division, HLA Holdings Sdn Bhd, achieved pre-tax profit growth of 2.1% y-o-y to RM453mil on stronger investment income as well as a higher share of associate profits.

The group’s investment banking arm, Hong Leong Capital Bhd, meanwhile, recorded a pre-tax profit of RM73.9mil, up 40% y-o-y due to higher stockbroking income and improved equity investment performance, but recorded lower contribution from investment banking.

HLFG president and CEO Tan Kong Khoon said the group’s performance was commendable as it achieved a return on equity (ROE) of 11.3%, underpinned by strong asset quality, robust loans/financing growth, improved investment income and higher contributions from our associates.

“Going into the final quarter of the financial year, we are cautiously optimistic on the continuity of our business growth momentum as we anticipate Malaysia’s economy to remain resilient on the back of domestic demand and government economic initiatives.

“Nevertheless, we are cognisant of downside risks as the global economy faces external headwinds from evolving geopolitical and trade tensions between major economies,” he said.