Hong Leong Bank group managing director and CEO Kevin Lam
KUALA LUMPUR: Hong Leong Bank Bhd
wrapped its 2024 financial year (FY24) with earnings and revenue growth despite the challenges of the macro economy and operating environment, said group managing director and CEO Kevin Lam.
"This achievement was a result of being steadfast in the execution of our 3-5 Year Strategic Plan along with commendable loans/financing growth, improved current account savings account (Casa) ratio, healthy asset quality as well as maintaining
prudent funding and liquidity positions," he said in his review of the bank's financial report.
In the final quarter of FY24 (4QFY24), Hong Leong Bank recorded a net profit of RM1.03bil, up from RM864.68mil in the year-ago quarter, while earnings per share rose to 50.45 sen against 42.21 sen previously.
The bank's revenue expanded to RM1.48bil in the quarter under review from RM1.3bil in the comparative quarter.
Over the entire financial year, Hong Leong Bank posted a net profit of RM4.2bil, which compares with RM3.82bil in the previous year, while revenue rose to RM5.77bil from RM5.69bil in FY23.
The board of directors declared a final dividend of 43 sen per share, which brings the total dividend for the year to 68 sen per share.
This represents a nine sen higher dividend from the previous year as well as a higher dividend payout ratio of 33.6%.
During the quarter, Hong Leong Bank said net interest income registered a 10.7% increase year-on-year (y-o-y) to RM1.21bil, led by expansion in loans/financing and effective funding cost management.
Correspondingly, the bank recorded a fifth consecutive quarter of improved net interest margin (NIM) to 1.89%.
Over the 12-month period of FY24, net interest income grew 2.6% y-o-y to RM4.67bil.
Meanwhile, non-interest income expanded 26.5% y-o-y to RM271mil on the back of higher fee income from wealth management and credit card-related fees, coupled with gains in foreign exchange.
Non-interest income over the entire FY24 period was RM1.1bil.
Hong Leong Bank reported an operating expense of RM2.34bil in FY24, which lead to a cost-to-income ratio of 40.5%.
It said gross loans, advances and financing maintained its commendable growth momentum, with an expansion of 7.3% y-o-y to RM194.9bil, driven by expansion in our key segments of mortgage, auto loans, SME and commercial banking, as well as key overseas markets.
Customer deposits in FY24, meanwhile, increased 4.1% y-o-y to RM220.4bil, with Casa delivering strong growth of 10% y-o-y to RM71.6bil. This translated to an improved Casa ratio of 32.5%.
Meanwhile, the bank's parent company, Hong Leong Financial Group Bhd (HLFG), reported a net profit of RM806.09mil in 4QFY24 against RM663.91mil in 4QFY23.
HLFG said revenue came in at RM1.72bil in the quarter under review against RM1.49bil in 4QFY23, while earnings per share rose to 71.1 sen from 58.5 sen previously.
In the 12-month period to June 30, 2024, HLFG's net profit was RM3.2bil against RM2.88bil in FY23, while revenue climbed to RM6.65bil from RM6.48bil in the previous year.
"The key drivers to our profit growth were underpinned by strong loans/financing growth, higher investment gains from insurance segment, improved brokerage income and healthy contributions from our associates.
"This showcases the strength of the group’s operating companies in successfully navigating a challenging operating environment amid persistent external headwinds," said HLFG president and CEO Tan Kong Khoon in a statement.
He added that while Malaysia's prospects remain favourable, the group is mindful of any downside risk of external headwinds from evolving geopolitical and trade tensions between major economies.
For its final dividend, HLFG declared a payout of 36 sen a share, which brings its total dividend to 54 sen a share in FY24, a five sen increase from the previous year.
