Hong Leong Bank group managing director and CEO Kevin Lam
KUALA LUMPUR: Hong Leong Bank Bhd
kicked off its new financial year on a strong note with improved topline and bottomline, supported by loans and financing growth and higher non-interest income.
The group recorded a net profit of RM1.09bil in the first quarter ended Sept 30, 2024, up from RM1.03bil in the year ago quarter, representing an earnings per share of 53.17 sen against 50.26 sen previously.
It reported a revenue of RM1.6bil during the quarter under review as compared to RM1.39bil in the year-ago quarter.
According to the group, its net interest income grew 10.5% year-on-year (y-o-y) to RM1.24bil as a result of solid loans and financing growth and effective asset/liability management.
The bank's net interest margin (NIM) rose eight basis points y-o-y to 1.92%.
Meanwhile, non-interest income jumped 32% y-o-y to RM354mil with a non-interest income ratio of 22.1%, complemented by healthy fee income, higher realised investment income and improved foreign exchange gains.
The group said operating expenses were tightly managed at RM626mil during the quarter for a cost-to-income ratio of 39.l%
On balance sheet, gross loans, advances and financing registered 6.9% y-o-y growth to RM194.2bil, driven by expansion in the key segments of mortgage, auto loans, SME and commercial banking.
Customer deposits during the quarter increased 4.9% y-o-y to RM219.4bil with current account savings account (Casa) risig 13.6% y-o-y to RM70.4bil, for a Casa ratio of 32.1%.
Hong Leong Bank group managing director and CEO Kevin Lam said the group will double down on its digital capabilities, foster strategic partnerships and develop a world class talent pool.
"In our journey towards carbon neutrality, the bank remains committed to step up environmental, social and governance (ESG) efforts to deliver meaningful impact to all of our stakeholders,” he said in a statement.
Separately, Hong Leong Bank's holding company Hong Leong Financial Group Bhd (HLFG) said it had delivered a net profit of RM847.67mil in 1QFY25, as compared to RM741.65mil in the year-ago quarter.
HLFG's earnings per share rose to 74.7 sen from 65.4 sen in the comparative quarter.
As for revenue, the group registered RM1.89bil in the quarter, compared to RM1.58bil in 1QFY24.
It said in a statement, that its insurance division HLA Holdings Sdn Bhd posted a pre-tax profit of RM237mil up 142.3% from a year ago due to stronger investment income and higher net insurance service results.
However, this was mitigated by the lower share of profits from its associate, MSIG Insurance (Malaysia) Bhd.
The group's investment banking and asset management division Hong Leong Capital Bhd, meanwhile, recorded a 20.5% y-o-y dip in pre-tax profit to RM22mil due to delays in the completion of mandated deals, mark-tomarket decline in valuation of hedging instruments and lower equity investment returns.
"The group anticipates Malaysia’s positive economic momentum will carry into year 2025, but are mindful of downside risk and external headwinds stemming from evolving geopolitical and trade tensions between major economies," said HLFG president and CEO Tan Kong Khoon.
