Hong Leong Bank posts record net profit

CEO says per­for­mance due to strong rev­enue growth

The Star Malaysia - StarBiz - - News - Rev­enue (RM mil) Pre-tax profit (RM mil) Net profit (RM mil) EPS (sen) Div­i­dend (sen) Rev­enue (RM mil) Pre-tax profit (RM mil) Net profit (RM mil) EPS (sen) Div­i­dend (sen) Rev­enue (RM mil) Pre-tax profit (RM mil) Net profit (RM mil) EPS (sen) Div­i­dend (se

KUALA LUMPUR: Hong Leong Bank Bhd is look­ing for­ward to an­other strong year af­ter re­port­ing a record net profit of RM2.64bil for the fi­nan­cial year ended June 30.

The in­crease in net profit rep­re­sented a 23% in­crease year-on-year (y-o-y).

Group manag­ing di­rec­tor and chief ex­ec­u­tive of­fi­cer Domenic Fuda at­trib­uted the per­for­mance to strong rev­enue growth, pru­dent cost-man­age­ment and im­proved con­tri­bu­tion from its as­so­ciate, Bank of Chengdu.

Mov­ing for­ward, he said the bank ex­pected to con­tinue its strong per­for­mance into FY19, with im­proved loans growth and bet­ter con­tri­bu­tion from its wealth man­age­ment seg­ment, among oth­ers.

He said the bank was tar­get­ing a 5% loan growth in FY19, in line with in­dus­try.

In FY18, the group’s gross loans, ad­vances and fi­nanc­ing grew 3.1% to RM129.1bil.

“Un­til June, in­dus­try loan growth was at 5%.

“For our fi­nan­cial year, I think a growth of around 5%, or a bit more is achiev­able,” he told a me­dia brief­ing here yes­ter­day.

The an­tic­i­pated growth in loans, he said, would be on the back of stronger con­tri­bu­tion across the board, par­tic­u­larly in mort­gages and the SME seg­ments.

He said a turn­around in auto loans was ex­pected af­ter hav­ing de­clined in FY18.

“In the first two months (of FY19) we have seen bet­ter growth in auto.

“Apart from the im­pact of the zero-rat­ing of the GST, we also saw some mar­ket gain in this area,” he said.

For FY18, the group saw its rev­enue grow 6.3% to RM4.8bil, while re­turn on eq­uity (ROE) im­proved to 11.3% from 9.8% last year.

Net in­ter­est in­come grew 4.2% to RM3.4bil, lead­ing to a net in­ter­est mar­gin of 2.1%.

Non-in­ter­est in­come, mean­while, grew 12.5% to RM1.3bil on the back of stronger in­come from wealth man­age­ment and con­tri­bu­tion from trea­sury op­er­a­tions.

On the group’s plans for its dig­i­tal plat­form, he said they would con­tinue to in­vest and have al­lo­cated be­tween RM150mil and RM200mil in over­all tech­nol­ogy costs.

On an­other mat­ter, Fuda said the bank was open to in­creas­ing its stake in Bank of Chengdu in line with China’s re­moval of lim­its on for­eign hold­ings in its do­mes­tic banks.

Pre­vi­ously, for­eign own­er­ship was capped at 20% for a sin­gle in­sti­tu­tion.

The group’s stake in the Chi­nese bank had been di­luted to 18% from 19.9% fol­low­ing an IPO in Jan­uary.

“It has been a prof­itable re­la­tion­ship.

“In the past it was not pos­si­ble to in­crease our stake as reg­u­la­tion did not al­low, but now there may be an op­por­tu­nity for us to in­crease our stake,” he said. EA Tech­nique Sal­con Mi­tra­jaya Af­fin Bank Ireka OCK Spritzer

(90.03) (182.79) (9.46) – (36.61) (36.72) (7.28) – (4.33) (9.05) (1.41) – – – – – (94.40) (66.60) (3.44) – – (1.36) (0.84) (0.13) – – – – –

Op­ti­mistic: Fuda ex­pects to con­tinue its strong per­for­mance into FY19.

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