The Star Malaysia - StarBiz

Hong Leong posts 1Q net profit ol Rm981mil

-

KUALA LUMPUR: Coming off a set of positive earnings in its first quarter for the financial year 2023 (1Q23), ended Sept 30, 2022, Hong Leong Bank Bhd (HLB) managing director and chief executive officer Domenic Fuda says the outlook remains at risk of macro headwinds, including rising global inflation.

“The global economic outlook remains susceptibl­e to a potential fallout from aggressive monetary policy tightening, persistent inflation, financial market volatility, a slowdown in the China economy and rising geopolitic­al risks,” Fuda said, while announcing the bank’s 1Q23 results.

“In tandem with the rest of the world, spillover effects from protracted inflationa­ry pressures, which are expected to impinge on real consumptio­n, would likely dampen growth prospects.”

During the quarter under review, the bank recorded a net profit of Rm981.41mil, which was 14.35% higher than in the previous correspond­ing quarter.

The group’s earnings per share were 47.91 sen, compared with 41.91 sen in the comparativ­e quarter.

Meanwhile, revenue increased 8.7% to Rm1.5bil, owing to higher net interest income and consistent non-interest income contributi­ons.

For the quarter under review, net interest income was 9.9% higher year-on-year (y-o-y) at Rm1.23bil as a result of solid loan and financing growth and effective asset and liability management.

Correspond­ingly, the bank’s net interest margin improved by five basis points y-o-y.

A higher fee income and sustained performanc­e in treasury market activities also boosted the bank’s non-interest income by 3.4% y-o-y to Rm268mil, with a non-interest income ratio of 17.9%.

According to the bank’s CEO, gross loans and financing expanded 8.8% y-o-y to Rm169.5bil, on the back of expansion in the mortgage, small and medium enterprise­s, and commercial banking segments, as well as overseas operations.

He added that the overall gross impaired loan ratio was stable at 0.49%, with adequate loan impairment coverage of 212.2%.

Customer deposits for 1Q23 rose 7.7% to Rm197.4bil with current account savings account (Casa) growth at 7.7% y-o-y to Rm63.7bil and a Casa ratio of 32.3%.

The capital position of the bank remained strong, with CET 1, Tier 1 and Total Capital ratios at 12.9%, 14% and 16.1% respective­ly, as ofsept30,2022.

In internatio­nal operations, the Bank of Chengdu’s contributi­on rose 22.6% to Rm259.9mil, representi­ng 21.9% of the bank’s pre-tax profit.

Meanwhile, HLB’S holding company, Hong Leong Financial Group Bhd (HLFG) posted a net profit of Rm681.74mil, versus a net profit of Rm640.56mil in 1Q22.

This rise came on the back of a higher contributi­on from HLB, while the bank’s insurance division, HLA Holdings Sdn Bhd, and the investment banking division, Hong Leong Capital Bhd, recorded lower contributi­ons.

HLFG’S revenue rose to Rm1.65bil compared to Rm1.56bil in the previous correspond­ing quarter.

Newspapers in English

Newspapers from Malaysia