BANKING ON CORE BUSINESS STRENGTH
Group’s full-year earnings higher at RM1.51b despite lower contribution from commercial unit
LOWER contributions from Hong Leong Bank Bhd, the commercial banking unit of Hong Leong Financial Group Bhd (HLFG), have dragged the latter’s net profit down by 34.2 per cent to RM258.79 million in the fourth quarter ended June from RM393.50 million previously.
Revenue, however, inched 5.5 per cent higher to RM1.27 billion, from RM1.21 billion in the same quarter last year, while earnings per share was 22.60 sen compared with 34.40 sen previously.
HLFG group president and chief executive officer Tan Kong Khoon said core businesses continued to show strong credit and liquidity risk metric.
“Our continued focus remains on the execution of our business strategies in tandem with our digital plans to build sustainable long-term value for our shareholders,” he said.
For the full year, HLFG’s profit expanded 10.88 per cent to RM1.51 billion from RM1.36 billion, with revenue rose 10.81 per cent to RM5.04 billion from RM4.54 billion previously.
HLFG noted that despite the one-off mutual separation scheme (MSS) expense last year, its higher full-year profit was supported by its banking, insurance and investment banking businesses.
Hong Leong Bank’s RM2.75 billion profit before tax for the year ended June was 15.4 per cent higher than RM2.38 billion posted previously.
Excluding the MSS expense, Hong Leong Bank’s pre-tax profit would have increased 7.6 per cent.
This was due to higher revenue of RM372.8 million, lower operating expenses of RM79.3 million (inclusive of MSS expense last year) and higher share of profit from the Bank of Chengdu and Sichuan Jincheng Consumer Finance joint venture of RM30.7 million.
This was, however, offset by higher allowance for impairment losses on loans, advances and financing of RM108.6 million and higher allowance for impairment losses from securities of RM7.6 million.
Tan noted HLFG’s life insurance unit HLA Holdings’ gross premium surged past RM3 billion mark for the first time to RM3.01 billion for the year ended June.
HLA Holdings’ RM337.8 million profit before tax for the year ended June was a 71 per cent jump from RM197.5 million previously.
The increase was mainly due to higher life fund surplus of RM61.3 million, higher revenue of RM45.2 million, lower allowance for impairment losses on securities of RM40.5 million and higher share of profit from an associated firm of RM4.6 million.
This was, however, offset by higher operating expenses of RM11.3 million.
Tan went on to highlight higher contribution from the investment banking, stockbroking and asset management divisions lead to Hong Leong Capital achieving RM84 million in profit before tax for the year ended June.
This was 30.2 per cent higher than RM64.5 million posted, previously.