Business

Thursday November 12, 2009

HLB Q1 profit down slightly on lower interest income


PETALING JAYA: Hong Leong Bank Bhd (HLB) posted a net profit of RM234.2mil for the first quarter ended Sept 30 versus RM242mil in the previous corresponding period.

This was achieved on lower net interest income, non-interest income and higher allowances on losses on loans, advances and financing.

Revenue stood at RM511.7mil against RM550.1mil a year ago.

The lower earnings was partly mitigated by lower impairment losses, operating expenses and higher net income from Islamic banking business.

However, on a quarter-to-quarter basis, its net profit was 18% higher than the fourth quarter ended June 30 on 3.7% higher net income to RM512mil.

Managing director and chief executive Yvonne Chia said the first-quarter performance was the best in the three quarters of this calendar year.

“We see signs that the Malaysian economy will be more vibrant in the second half of FY10 and we are well-positioned to take advantage of this upside potential,” she said in a statement to Bursa Malaysia.

HLB’s total assets stood at RM77bil with gross loans expanding 0.4% to RM36bil from a year ago and customer deposits holding firm at RM63.7bil.

Gross non-performing loan (NPL) ratio and net NPL ratio decreased to 2.2% and 1.2% respectively from 2.3% and 1.3% in the previous corresponding period. Loan loss coverage improved to 115% from 109% as at end FY09.

Its 20% associate Bank of Chengdu Co Ltd contributed RM31mil in share of profits while Hong Leong Bank Vietnam Ltd commenced operations on Oct 8.

The group is expected to open by the first quarter of next year a limited purpose branch in the integrated resort on Singapore’s Sentosa, which would offer foreign exchange and remittance services.

Meanwhile, Hong Leong Financial Group Bhd (HLG) posted a 7% increase in net profit to RM157.6mil for the first quarter ended Sept 30 compared with RM147.2mil in the previous corresponding period.

This was despite revenue falling to RM562.6mil from RM570.7mil a year ago.

The group saw higher contributions from investment banking and insurance divisions while commercial banking recorded lower earnings for the quarter due to lower net interest income and non-interest income.

Investment banking’s pre-tax profit stood at RM7.6mil for the three months versus RM2.8mil a year ago, thanks to higher net broking and commission fees.

Insurance business achieved a pre-tax profit of RM13.5mil, a whopping jump from RM1.8mil a year earlier on higher underwriting profits.

HLG has declared a first interim dividend of 9 sen per share less income tax of 25%.

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