[ad_1]
KUALA LUMPUR: Hong Leong Bank’s net income increased 5.9% to RM728.90 thousand in its first quarter ended September 30, 2020 from RM688.57 thousand a year ago due to higher net income, prudent cost control and strong contributions from its associates.
In a statement issued on Friday, the banking group said that its profit before taxes increased 5.2% to RM890.25 thousand from RM846.55 thousand ago as net income was higher than RM133.50 thousand, operating expenses were lower than RM1.5 thousand and a higher share of the associated company’s profits of RM22.20 thousand.
However, this was mitigated by a reserve for impairment losses on loans, advances and financing of RM113.3 thousand
Hong Leong Bank’s revenue increased 10.9% to RM1.35bul from RM1.21bil. Earnings per share were 35.6 sen compared to 33.65 sen.
His group’s managing director and chief executive, Domenic Fuda, said the environment in which it operates remains challenging, affected by the ongoing pandemic and cautious sentiment from consumers and businesses.
“Nonetheless, our strategic and tactical plans provided us with a solid foundation to start the financial year on a positive note, generating a net profit of RM729k for the quarter, a 5.9% YoY increase supported by reasonable top-line performance. , prudent cost control and solid contributions from our associates.
“Gross loans and financing maintained their growth momentum, with a year-on-year expansion of 6.8% driven by signs of economic recovery during the quarter, along with financing disbursed to support SMEs and corporate businesses.
“We continue to closely monitor the quality of our assets during this uncertain period, ending the quarter with a healthy GIL ratio of 0.48%. In light of the prolonged recovery situation, to err on the side of caution, we have continued to proactively build buffers of preventative credit losses during the quarter, ”said Fuda.
Hong Leong Bank’s gross loans and funding expanded 6.8% year-on-year to RM148.1 billion, while maintaining strong asset quality as the gross impaired loan ratio (GIL) improved to 0.48%.
Its capital and liquidity position remained strong with Common Equity Tier 1 (CET 1), Tier 1 and total capital ratios at 13.5%, 14.1% and 16.3% respectively.
The loan-to-deposit ratio (LDR) and liquidity coverage ratio (LCR) were managed prudently at 84.1% and 157%, respectively.
Hong Leong Bank said its total revenue increased 11% YoY (YoY) or 12.7% YoY (YoY) to RM1.35 billion, due to loan / financing expansion, prudent asset management and liabilities and -Contribution of interest income.
Net interest income posted a 12.5% year-on-year increase to RM992k, as a result of asset growth and lower cost of financing the fixed deposit price revision after Ovenright policy rate cuts ( OPR). Consequently, the net interest margin (NIM) for the first quarter recovered to 2%.
Gross loans, advances and financing expanded by 6.8% year-on-year to RM 148.1 billion, led by key segments of mortgages, SMEs and commercial banking, as well as overseas operations.
Hong Leong Bank said domestic lending / financing continues to outpace the industry growth rate, at 6.8% year-on-year.
For residential mortgages, there was an 8% year-on-year increase to RM74.5 billion, supported by a healthy loan / financing portfolio, while the growth of loans / financing for transport vehicles remained subdued with a overall portfolio of 17.2 billion ringgit.
Hong Leong Bank’s internal loans / financing to commercial companies expanded 8.4% year-on-year to RM43.3 billion, while loans and financing to SMEs increased 9.4% year-on-year to 23.8 one billion ringgit.
“The bank’s community banking initiative continues to record strong growth of 37.9% YoY or 10.8% QoQ, partially helped by the disbursement of the Special Aid Service (SRF) to support SMEs.
Loans and financing of foreign operations posted 7% year-on-year growth, led by expansion in Cambodia and Vietnam of 19.2% and 21% year-on-year respectively.
Compared to the previous quarter ending June 30, its profit before tax increased 37.2% to RM890.25 thousand from RM648.70 thousand mainly due to a higher net income of RM152.2 thousand, lower reserve for impairment losses in loans, advances and financing of RM86.90 thousand and greater participation in the profits of associated companies of RM2.7 thousand.
[ad_2]
