Hong Leong Financial Group's Net Profit Up By 11 Pct To RM3.2 Bln In FY2024

KUALA LUMPUR, Aug 29 (Bernama) -- Hong Leong Financial Group Bhd's (HLFG) net profit for the financial year ended June 30, 2024 (FY2024) rose 11 per cent year-on-year (y-o-y) to RM3.20 billion from RM2.88 billion a year ago, driven by improved contributions across all operating companies.

Revenue was higher at RM6.65 billion from RM6.48 billion in FY2023, it said in a filing with Bursa Malaysia. 

President and chief executive officer (CEO) Tan Kong Khoon attributed the profit growth to strong loans and financing growth, higher investment gains from the insurance segment, improved brokerage income and healthy contributions from associates.

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"This performance demonstrates the strength of the group’s operating companies in successfully navigating a challenging operating environment amid persistent external headwinds," he said in a statement. 

HLFG declared a final dividend of 36 sen per share, bringing the total dividend to 54 sen per share for FY2024, an increase of five sen compared to the previous year.

The group’s insurance division, HLA Holdings Sdn Bhd (HLAH), recorded a profit before tax (PBT) of RM606 million, higher by 2.8 per cent y-o-y mainly contributed by stronger investment income as well as a higher share of profits from its associate.

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Its investment banking and asset management division Hong Leong Capital Bhd’s (HLCB) PBT grew strongly by 98.4 per cent y-o-y to RM122 million from improvement in all operating subsidiaries as well as higher equity investment gains.

Its commercial banking division, Hong Leong Bank Bhd (HLB), saw its net profit rose to RM4.20 billion for FY2024 compared to RM3.82 billion, supported by strong loans/financing growth, improved asset quality metrics and healthy contributions from its associates.

HLB's total income expanded by 1.5 per cent y-o-y to RM5.77 billion from RM5.69 billion in FY2023. 

In a separate statement, HLB's group managing director and CEO Kevin Lam said HLB registered a solid growth of 9.9 per cent y-o-y for FY2024, achieving a strong return on equity (ROE) of 11.8 per cent. 

He said gross loans and financing portfolio grew 7.3 per cent y-o-y to RM194.9 billion, contributed by expansion in our mortgage, auto loans, small and medium enterprises (SMEs), and commercial banking segments, as well as key overseas markets. 

"We maintain our prudent risk management culture and tight credit underwriting process, thus delivering industry-leading gross impaired loan (GIL) ratio of 0.53 per cent and loan impairment coverage (LIC) ratio of 155.0 per cent," he said. 

For the fourth quarter (4Q), the bank recorded a higher net profit of RM1.03 billion from RM864.68 million in the previous corresponding period, while total income grew 13.3 per cent y-o-y to RM1.48 billion underpinned by expansion in loans/financing portfolio and sustained non-interest income contribution. 

Net interest income for 4Q 2024 showed an encouraging 10.7 per cent y-o-y or 2.1 per cent quarter-on-quarter (q-o-q) growth to RM1.21 billion, led by expansion in loans/financing and effective funding cost management. 

Correspondingly, net interest margin (NIM) has recorded a consecutive fifth quarter of improvement to 1.89 per cent. 

"With that, net interest income (NII) for FY2024 grew 2.6 per cent y-o-y to RM4.67 billion," it said.

Additionally, non-interest income for 4Q 2024 expanded strongly by 26.5 per cent y-o-y or 6.2 per cent q-o-q to RM271 million, on the back of higher fee income from wealth management and credit card related fees, coupled with gains in foreign exchange. 

For FY2024, NII was healthy at RM1.10 billion.

Meanwhile, gross loans, advances, and financing maintained its commendable growth momentum, with an expansion of 7.3 per cent y-o-y to RM194.9 billion, driven by expansion in our key segments of mortgage, auto loans, SME, and commercial banking, as well as key overseas markets.

HLB also maintained prudent funding and liquidity positions to support sustainable business growth, with a loans-to-deposit ratio (LDR) of 87.0 per cent and a liquidity coverage ratio (LCR) of 126.6 per cent as of June 30, 2024, comfortably above regulatory requirements.

The bank has declared a final dividend of 43 sen per share, bringing the total dividend to 68 sen per share for FY2024, an increase of nine sen compared to the previous year.

-- BERNAMA