Hong Leong Bank Q1 earn­ings up 8%, aided by higher in­come

The Sun (Malaysia) - - SUNBIZ -

PETALING JAYA: Hong Leong Bank Bhd (HLBB) re­ported a 7.9% rise in net profit to RM542.63 mil­lion for the first quar­ter ended Sept 30, 2016 com­pared with RM502.96 mil­lion in the pre­vi­ous cor­re­spond­ing pe­riod, driven by higher net in­come of RM73.0 mil­lion and higher share of profit from as­so­ciate com­pany and joint ven­ture to­talling RM10.0 mil­lion.

Its rev­enue rose 7.1% from RM1.02 bil­lion to RM1.1 bil­lion.

In a fil­ing with the stock ex­change, HLBB said its net in­ter­est in­come ex­panded 5.4% to RM801 mil­lion, ben­e­fit­ting from fo­cused loan pric­ing, lower cost of fund­ing due to the ma­tu­rity of higher cost fixed de­posits cam­paigns and re­demp­tion of cap­i­tal se­cu­ri­ties in pre­ced­ing quar­ter.

Con­se­quently, its net in­ter­est mar­gin rose seven ba­sis points to 2.01%, de­spite the 25 ba­sis-point cut in the Overnight Pol­icy Rate in July 2016.

HLBB’s non-in­ter­est in­come sus­tained its growth mo­men­tum, with a 12.2% growth to RM295 mil­lion, mainly sup­ported by higher in­come from trea­sury op­er­a­tions. Its gross loans and fi­nanc­ing ex­panded 4.0% to RM121.0 bil­lion with a gross im­paired loan ra­tio of 0.84%.

HLBB is in ro­bust cap­i­tal po­si­tions with com­mon eq­uity tier 1 (CET-1), tier-1 and to­tal cap­i­tal ra­tios im­prov­ing to 12.9%, 13.3% and 14.8% re­spec­tively.

Mov­ing ahead, the group manag­ing di­rec­tor and CEO Domenic Fuda said he ex­pects mod­er­ate growth in loans and de­posits in the com­ing quar­ters as the Malaysian econ­omy re­mains on a mod­er­ate growth tra­jec­tory, amid con­tin­ued sup­port from do­mes­tic de­mand es­pe­cially pri­vate sec­tor ac­tiv­i­ties.

“The group will con­tinue to strengthen dig­i­tal of­fer­ings and cus­tomer an­a­lyt­ics ca­pa­bil­i­ties to add value and dif­fer­en­ti­ate our multi-chan­nel bank­ing ser­vices for both do­mes­tic and re­gional busi­nesses.

“At the same time, there will also be strong em­pha­sis on im­prov­ing op­er­a­tions ef­fi­ciency and scal­ing pro­duc­tiv­ity through strate­gic cost man­age­ment for su­pe­rior re­turn and sus­tain­able growth,” he said.

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