KUALA LUMPUR: Hong Leong Financial Group Bhd’s (HLFG) net profit rose 4.4% year-on-year (y-o-y) to RM502.96 mil for the second quarter ended Dec 31, 2019.
This lifted its earnings for the first half of the financial year ended June 30, 2020 (FY20) to RM993.16 mil from RM987.24 mil recorded in the corresponding period of the previous year.
Revenue rebounded in the quarter under review with a 9.2% growth to RM502.96 mil, raising revenue for the first six months of FY20 to RM2.69 bil, HLFG said in a filing with Bursa Malaysia today.
For the quarter, Hong Leong Bank Group recorded a 4.1% y-o-y increase in profit before tax to RM857 mil due to RM95.4 mil higher revenue and a higher share of profit from associated companies of RM33.8 mil.
On its first half-year results, HLFG said excluding one-off gains from an equity divestment of RM90 mil recorded in the corresponding period in 2018, the group’s normalised net profit expanded by 7% y-o-y.
President and chief executive officer Tan Kong Khoon said that despite the challenging business environment, the group delivered commendable business growth across its core businesses.
“We continued to reinvest our cost savings from expense management programmes into digital initiatives and stayed vigilant on credit and risk indicators.
“We remain committed in executing our business and digital strategies to build long term sustainable value for our shareholders,” he said in a statement.
The group noted that its efforts on Islamic financial services continued to show results, with net income from Islamic banking and takaful businesses for the six-month period growing 17.8% y-o-y to RM437.7 mil.
The contribution of the Islamic businesses to HLFG’s profit before tax was 12.4%, it said.
On its 65.6%-owned subsidiary Hong Leong Bank Bhd (HLB), HLFG said the commercial banking business recorded a net profit of RM1.39 bil for the 1HFY20.
It said HLB’s loans grew better-than-market by 7.3% y-o-y to RM141.3 bil despite a relatively softer business environment with residential mortgages expanding strongly by 9.8% y-o-y to RM70.6 bil, supported by a healthy loan pipeline.
The bank’s domestic loans growth also continued to outperform the industry, growing by 6.8% y-o-y to RM133.5 billion, it said.
Domestic loans to the retail segment continued to drive the bank’s loan growth, increasing 6.6% y-o-y and contributing 71% of the total loans, while domestic loans to business enterprises increased by 4.8% y-o-y.
HLFG said growing the corporate and small and medium enterprises portfolio remained the group’s priority including a commitment to support renewable energy project.
Meanwhile, its insurance operating subsidiary Hong Leong Assurance Bhd (HLA) also reported a net profit of RM73.5 million for the first half of FY20, impacted by lower interest rates and several one-offs including Bank Negara Malaysia’s new minimum allocation rate rules effective July 1, 2019.
Meanwhile, its investment banking and asset management businesses under Hong Leong Capital Bhd recorded a higher net profit of RM46.8 mil for the first half of this financial year, an increase of 11.3% y-o-y.
The asset management division under Hong Leong Asset Management Bhd continued to show strong profits growth for the period with its net profit increasing 71% y-o-y to RM13.8 mil while average assets under management rose by RM1.5 bil or 8.7% y-o-y to RM19.1 bil, it added. – Feb 26, 2020, Bernama
