Hong Leong Bank Reports 5.8% Increase in First Quarter Net Profit to RM1.09 Billion.


KUALA LUMPUR: Hong Leong Bank Bhd recorded a 5.8 percent increase in net profit for the first quarter ending September 30, 2024 (1Q FY2025), reaching RM1.09 billion compared to RM1.03 billion in the same period last year. The bank’s performance was bolstered by solid growth in loans and financing, enhanced non-interest income, and stable contributions from its associates.

According to BERNAMA News Agency, the bank’s revenue rose to RM1.60 billion from RM1.39 billion previously. This increase was driven primarily by a rise in net interest income and non-interest income, alongside a higher share of profit from associated companies. Kevin Lam, the group managing director and CEO, highlighted a 6.9 percent year-on-year growth in the bank’s gross loans and financing portfolio, totaling RM194.2 billion. This growth was attributed to the expansion in mortgage, auto loans, small and medium-sized enterprise (SME), and commercial banking segments.

The bank’s total income for 1Q FY2025 witnessed a 14.6 percent year-on
-year growth to RM1,598 million, with net interest income rising 10.5 percent year-on-year to RM1.24 billion due to solid loans and financing growth and effective asset and liability management. The net interest margin (NIM) improved by eight basis points year-on-year to 1.92 percent.

Hong Leong Bank’s non-interest income surged 32 percent year-on-year to RM354 million, with a non-interest income ratio of 22.1 percent. This was supported by healthy fee income, higher realized investment income, and improved foreign exchange gains. Looking ahead, Lam stated that the bank plans to enhance its digital capabilities, foster strategic partnerships, and develop a world-class talent pool to drive the growth of its core businesses and establish a strong ASEAN presence.

Hong Leong Bank is a subsidiary of Hong Leong Financial Group Bhd (HLFG), which also reported a net profit increase of 14.3 percent to RM847.67 million in 1Q FY2025 from RM741.65 million previously, driven by higher contributions from its banking and
insurance divisions. HLFG’s revenue increased to RM1.89 billion from RM1.58 billion previously.

President and CEO Tan Kong Khoon noted that the group’s strong 1Q FY2025 performance was led by a 20.0 percent year-on-year topline growth. The non-interest income growth of 46.7 percent year-on-year was attributed to fee-income expansion initiatives and investment gains, particularly in the insurance segment. Despite some challenges in the investment banking and asset management division, HLFG anticipates Malaysia’s positive economic momentum to continue into 2025, while remaining cautious of potential risks from geopolitical and trade tensions.

Both Hong Leong Bank and HLFG have not declared any dividends for the quarter under review.