HLB logs RM946.7mil net profit, RM1.55bil revenue in Q3

New Straits Times

5 days ago

KUALA LUMPUR: Hong Leong Bank Bhd's (HLB) posted a net profit of RM946.7 million in the third quarter ended March 31, 2025 (3Q25), down from RM1.04 billion a year ago.
The 9.4 per cent profit fall was mainly due to higher operating expenses of RM23.7 million, lower share of profit from associated company of RM60.0 million and dilution loss from associated company of RM407.6 million.
HLB's revenue for the quarter, however, rose to RM1.55 billion from RM1.44 billion previously, the bank's filing to Bursa Malaysia showed.
Its earnings per share fell to 46.18 sen compared to 50.97 sen in 3Q24.
No dividend was declared for the quarter.
For the first nine months of FY25 (9MFY25), HLB's net profit rose to RM3.18 billion from RM3.16 billion a year ago, while revenue for the period climbed to RM4.78 billion from RM4.29 billion.
The bank's net interest income for 9MFY25 was recorded at RM3.66 billion, marking a 5.8 per cent year-on-year (YoY) increase.
This was underpinned by strong loan and financing growth as well as effective funding cost management.
Accordingly, its net interest margin (NIM) was up five basis points (bps) YoY to 1.90 per cent.
Its non-interest income for 9MFY25 maintained the notable improvement of 34.1 per cent YoY to RM1.12 billion, driven by encouraging performance in the wealth management business and GM franchise sales alongside the higher treasury and foreign exchange gain.
The bank's expenses for 9MFY25 remained at RM1.85 billion, while the cost-to-income ratio was maintained at 38.8 per cent.
Meanwhile, the bank's gross loans, advances and financing grew 7.2 per cent YoY to RM201.2 billion.
This was driven by expansion in our key segments of mortgage, auto loans, SME and commercial banking as well as key overseas markets.
Domestic loans/financing increased 7.1 per cent YoY, ahead of the industry growth rate of 5.3 per cent.
The bank remains prudent in its funding and liquidity positions to strengthen resilience and stability, with loans to deposits ratio of 87.9 per cent as at March 31, 2025.
Customer deposits for 9MFY25 rose 5.9 per cent YoY to RM225.0 billion with current account savings account expanding 5.0 per cent YoY to RM68.3 billion.
HLB maintained a low gross impaired loans ratio of 0.57 per cent, reflecting stable asset quality.
As of March 31, 2025, its capital position remained sound, with CET1, Tier 1, and total capital ratios at 12.8 per cent, 13.7 per cent, and 15.7 per cent, respectively.
HLB group managing director and chief executive officer Kevin Lam said the bank is confident that the Malaysian economy will remain resilient amid the ongoing external headwinds.
"At HLB, we focus on the execution of the 3-5 Year Transformative Plan to deliver sustainable results to our stakeholders.
"With that, we are pleased to announce that our business performance thus far has been commendable underpinned by solid loans/financing growth, strong non-interest income contribution and healthy asset quality," he said in a separate statement.
Lam said the bank acknowledges the presence of global uncertainties, particularly those stemming from evolving tariffs policies and negotiations, as well as policy responses from major central banks that could potentially influence the final growth outcome, even as resilient domestic demand is expected to provide a buffer against external headwinds.
He added that by leveraging strengths in technology and artificial intelligence (AI), HLB will create innovative banking solutions that resonate with its customer across all touchpoints, solidifying its brand promise of "Built Around You".