HLBB registers modest earnings in 2QFY15

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KUCHING: Hong Leong Bank Bhd’s (HLBB) earnings for the second quarter of financial year 2015 (2QFY15) ended December 2014 increased six per cent year-on-year (y-o-y) to RM551.6 million.

The banking group in a filing to Bursa Malaysia yesterday said its net profit for the first half of financial year 2015 (1HFY15) grew 3.2 per cent y-o-y to RM1.1 billion.

However, HLBB said its turnover for 2QFY15 and 1HFY15 decreased as compared with the previous financial year corresponding period.

The banking group said its 2QFY15 revenue declined 2.9 per cent y-o-y to RM1.02 billion while turnover for 1HFY15 decreased 2.2 per cent y-o-y to RM2.04 billion.

Meanwhile, HLBB’s group managing director and chief executive officer (CEO) Tan Kong Khoon commented, “The year 2014 ended amidst weaker economic and business environment exacerbated by plunging oil prices, a depreciating ringgit and slower capital market activities.

“Despite a challenging operating environment, HLBB continues to demonstrate resilience in its performance on the back of strong business fundamentals and prudent management.

“Net profit after tax for 1HFY15 improved to RM 1.1 billion with return on equity remained strong at 14.7 per cent, led by healthy growth in net interest income, improved asset quality and strong profit contribution from associates.

“The positive results reinforce the group’s commitment in delivering sustainable business and profitable growth,” he said.

Additionally, the banking group disclosed that its net interest income registered a healthy growth of 8.1 per cent to RM1.6 billion, supported by expansion in loan book and securities portfolio.

Moreover, HLBB said its gross loans and financing expanded by 6.7 per cent y-o-y during 1HFY15 to RM107.3 billion.

The banking group observed that the retail segment remained the key driver for the group’s loan growth, expanded by 9.3 per cent y-o-y or 2.5 per cent quarter-on-quarter (q-o-q).

HLBB noted that its core segment of residential mortgages soared to RM42 billion, up a robust 15.1 per cent y-o-y and above industry growth.

Furthermore, the banking group said its transport vehicle loans gathered momentum with a slight growth of around one per cent, both on y-o-y and q-o-q basis, to RM17.6 billion.

In respect of customer segment, HLBB said individual segment contributed 62.8 per cent of total gross loan rising a healthy 9.9 per cent y-o-y, whilst loans and financing to small and medium enterprise (SME) sustained its growth momentum at 9.9 per cent y-o-y to RM16.8 billion.

On another note, HLBB disclosed that total profit contribution from its international operations accounted for 14.1 per cent of the group’s pre-tax profit in 1HFY15.

The banking group said profit contribution from its 20 per cent associate in China, Bank of Chengdu grew 6.7 per cent y-o-y to RM183.8 million in 1HFY15.

HLBB emphasised that Bank of Chengdu remains a key contributor to the financial performance of the group, contributing 13 per cent of the group’s profit before tax.

On the banking group’s business outlook, Tan said, “Our strategies remain unchanged.

“The group remains highly focused on building a high performance business for sustainable profitability.

“We will continue to strengthen our domestic franchise and regional niche business,
with a seamless omni-channel customer experience and delivering innovative solutions,” he said.