Hong Leong Bank posts slight increase in Q2 profit, pays 16 sen dividend

PETALING JAYA: Hong Leong Bank Bhd’s (HLBank) net profit for the second quarter ended Dec 31, 2019 rose marginally by 2.1% to RM701.81 million from RM687.25 million a year ago, mainly due to higher net income and share of profit from associated companies.

Its revenue grew 8.4% to RM1.24 billion against RM1.14 billion in the same quarter last year.

The board has recommended an interim dividend of 16 sen per share.

For the six-month (1H) period, the bank’s net profit slipped 0.3% to RM1.39 billion, while revenue went up 2.6% to RM2.45 billion from RM2.39 billion a year ago.

Excluding a one-off gain from divestment of joint venture last year, core net profit would have risen 6.6%.

HLBank’s 1H 20 net interest income was 4.5% higher at RM1.79 billion, resulting in an increase in net interest margin to 2.03% and 2.04% for 1H 20 and Q2 20, respectively.

Gross loans, advances and financing expanded 7.3% to RM141.3 billion, predominantly led by growth in its key segments of business banking and mortgages as well as overseas operations.

Its gross impaired loan ratio stood at 0.84%, with loan impairment coverage (LIC) ratio of 103%. Inclusive of regulatory reserve set aside as at December 31, 2019, the LIC ratio was 182%.

Its common equity tier 1, tier 1 and total capital ratios were at 13.1%, 13.7% and 15.9%, respectively.

Despite an expected moderation in the Malaysia economy in 1H, the group expects domestic demand, supported by both monetary and fiscal measures, to remain the main anchor of growth, helping cushion the fallout from the external front.

Meanwhile, Hong Leong Financial Group Bhd’s (HLFG) net profit rose 4.4% to RM502.96 million for its second quarter ended Dec 31, 2019 from RM481.55 million recorded in the same quarter of the previous year, mainly due to higher contribution from all of its operating divisions.

Revenue for the period stood at RM1.36 billion, a 9.2% increase from RM1.25 billion reported previously.

For the cumulative six-month period, its net profit stood at RM993.16 million, a slight increase of 0.6% from RM987.24 million a year ago, while revenue was up 2.2% to RM2.69 billion from RM2.63 billion.

At 3.30pm, HLB’s share price was trading 4 sen higher at RM15.16, while HLFG 12 sen lower at RM15.68.