Hong Leong Bank records 14.4 percent Q3 net profit
(1 May 2017 – Malaysia) Hong Leong Bank (HLB) reported strong results for the third financial quarter ended 31 March, driven by improved revenue growth with continued margin and efficiency improvements, coupled with steady recovery of its associate.
Its net profit rose 14.4 percent to RM569.54 million (A$178 million) from RM497.83 million a year ago, on higher net income and lower other operating expenses and impairment losses.
Quarterly total income also rose 12.1 percent to RM1.12 billion from RM1 billion over the same period.
In a filing with Bursa Malaysia, HLB said quarterly net interest income grew 12.9 percent year-on-year (y-o-y) to RM856 million.
For the cumulative nine months ended 31 March, the bank posted a 23.6 percent increase in net profit to RM1.66 billion, while total income grew 9.7 percent to RM3.4 billion underpinned by prudent cost of fund management, as well as higher non-interest income contribution.
Net interest income was 8.3 percent higher y-o-y at RM2.49 billion.
“Non-interest income for 9MFY17 rose 13.7 percent y-o-y to RM908 million, mainly led by stronger wealth management fees, dividend income from investments and higher gains from treasury operations. Correspondingly, non-interest income ratio for 9MFY17 rose to 26.7% compared with 25.8% a year ago,” said HLB in a statement yesterday.
HLB group managing director and chief executive officer (CEO) Domenic Fuda said the bank remains committed to delivering sustainable business growth, further augmented by the preservation of asset quality with still one of the lowest gross impaired loan ratio of 0.88% in the industry and solid loan impairment coverage ratio of 106 percent.
“Going forward, protection of our business franchise and profitability will remain our key priority,” he added.
Customer deposits increased by 4.2 percent y-o-y to RM152.2 billion on the back of stronger current account-savings account (Casa) growth of 8.8 percent y-o-y. Correspondingly, Casa ratio improved to 25.5%.
HLB also said international operations accounted for 13.9% of the bank’s pre-tax profit, led by the recovery of Bank of Chengdu’s (BoCD) performance in the third quarter. Profit contribution from BoCD improved 3.7 percent y-o-y to RM242 million.
Going forward, Fuda said the bank expects the Malaysian economy to expand at a slightly faster pace this year led by sustained domestic demand and supported by an improving global economic outlook.
“Against this better macro backdrop, we expect loans and deposits to continue their moderate growth trend in the coming quarters,” he added.
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