Hong Leong lowers loan growth target
KUALA LUMPUR: Hong Leong Bank Bhd has lowered this year’s loan growth target to three to four per cent from five to six per cent previously.
This follows the bank’s 1.8 per cent loan growth in the first half of the 2018 financial year.
Group managing director and chief executive officer Domenic Fuda said the lower projection was due to moderate industry credit growth as well as cautious business sentiments.
Gross loans, advances and financing growth in the first half of the 2018 financial year expanded 1.8 per cent year-on-year to RM125.5 billion.
“Overall loan growth was led by expansion in our key segments of mortgages, small and medium enterprise and overseas operations,” he said at a briefing on Hong Leong Bank’s financial performance here yesterday.
For the first half, Hong Leong Bank’s domestic loans to the retail segment continued to grow 3.8 per cent year-on-year amid a cautious consumer backdrop.
Net profit increased 24.2 per cent in the second quarter ended December 31 2017 to RM683.07 million, from RM549.94 million in the same quarter a year ago.
The increase was mainly due to higher revenue of RM49.8 million, higher share of profit from the Bank of Chengdu and Sichuan Jincheng Consumer Finance joint venture of RM85 million and lower allowance for impairment losses on loans, advances and financing of RM17.9 million.
This was offset by higher operating expenses of RM15.1 million and lower writeback of allowance for impairment losses on securities of RM1.1 million.
Its second-quarter revenue increased 4.2 per cent to RM1.22 billion from RM1.18 billion previously. For the first half, net profit increased 21 per cent to RM1.32 billion from RM1.09 billion, while revenue grew 5.8 per cent to RM2.41 billion from RM2.27 billion.
The board has declared an interim dividend of 16 sen for the first half.
Fuda said the bank expected loans and deposits to continue their moderate growth trend.
“We remain focused on executing our digital strategy, which includes the strengthening of digital offerings, transforming our products and services as well as improving our engagement with customers.
“We will continue to grow our domestic franchise and regional businesses through the multichannel banking approach,” he said.