Hong Leong Bank’s first quarter net profit jumps 17.7% to RM858million
KUALA LUMPUR (November 29): Hong Leong Bank Bhd’s net profit for the first quarter ended September 30, 2021 (1QFY22) jumped 17.7% to RM 858.25 million from RM 728.9 million ago a year, mainly due to higher net income and lower operating expenses and loan impairment provisions.
Earnings per share were 41.91 sen against 35.6 sen previously, according to its file filed with Bursa Malaysia on Monday (November 29th). Quarterly revenue increased 2.3% to RM 1.38 billion from RM 1.35 billion.
Hong Leong Bank said the profit increase was mainly due to higher net profit of RM31.1 million, lower operating expenses of RM13.8 million as well as provisions for impairment on loans, advances. and funding of RM 55.6 million.
In addition, the group also recorded the reversal of impairment losses on financial investments and other financial assets of RM500,000, and a higher share of profit of associated companies of RM50.9 million.
On a quarterly basis, Hong Leong Bank saw its net profit increase by 24.48% compared to RM 689.48 million for the previous quarter (4QFY21), while revenue increased by 3.75% compared to RM 1.33 billion.
Hong Leong Bank Group Managing Director and CEO Domenic Fuda said the Malaysian economy was showing signs of recovery after the implementation of the national stimulus package and the economy reopening as rates vaccination rates continued to increase.
“The recovery in domestic demand and the expansion of exports, together with increased consumer and business confidence, should contribute to the country’s growth prospects over the coming year.
“Nonetheless, we remain vigilant and responsive to the needs of our existing and new clients to ensure that they receive the necessary support in a timely manner as part of their recovery journey,” he said Monday in a separate statement. .
Fuda noted that the bank’s continued execution of its strategic priorities provided a solid foundation to start the new fiscal year with an encouraging set of results for 1QFY22, supported by an effective cost management structure, continued discipline in its investments. and the growth of the loan / financing portfolio.
“Loan and gross funding growth was strong at 5.2% year-on-year, driven by the positive business climate and economic recovery during the quarter as well as the expansion of small and medium enterprises (SMEs) and businesses.
“While ensuring that all clients receive the help they need, we continued to closely monitor and maintain the quality of our assets, ending the quarter with a strong gross impaired loan ratio of 0.48%.
“In a still uncertain business environment, we have leaned on the cautious side and continued to build additional preventative depreciation buffers,” Fuda said.
For 1QFY22, Hong Leong Bank said its total income grew 2.3% yoy to RM 1.38 billion, driven by expansion of lending / financing, careful management of assets and liabilities. and higher net interest income.
He added that the net interest income for 1QFY22 increased 13% year-on-year to RM 1.12 billion, with a corresponding net interest margin of 2.13%, mainly attributed to the concerted efforts of the bank to manage financing costs and loan / financing expansion.
At the same time, Hong Leong Bank’s loans, advances and gross financing continued to grow, increasing 5.2% year-on-year to RM 155.8 billion as the bank continued to provide financial support to clients to support their business growth and personal financing needs.
The bank said its healthy lending growth was mainly due to the expansion of key segments of mortgages, SMEs and commercial banks, Hong Leong Bank said.
He added that the bank’s capital position was healthy and favorable for future growth opportunities with its core Tier 1, Tier 1 and Total capital ratios at 13%, 13.5% and 15, 7% respectively at September 30, while its loan-to-deposit ratio stood at 83.8% and its liquidity coverage ratio improved to 167.2% from 157.3% a year ago. a year.
Regarding the business outlook, Fuda said that the recovery of the global economy has shifted into high gear, mitigated by disruptions in the global supply chain and the resulting increased inflationary risks.
“On a more positive note, we have seen further signs of a recovery in the Malaysian economy, spurred by the gradual reopening of more economic sectors and the lifting of the interstate travel ban. The continuation of the accommodative policy will also help support the recovery in the future, ”Fuda said.
At the same time, he noted that the bank will continue to be disciplined in its investments and spending to ensure a cost structure that allows the group to invest in growth opportunities that will deliver lasting results to its stakeholders.
“With the growing importance of sustainability for financial institutions, the bank plans to play its role in promoting and integrating environmental, social and governance considerations into its operations and business practices. This would help the bank to maintain its competitive advantage, ”he added.
At the lunch break on Monday, Hong Leong Bank’s share price had slipped 16 sen or 0.87% to RM18.14, valuing the banking group at RM39.24 billion.