KUALA LUMPUR: Hong Leong Bank Bhd's (HLB) net profit rose 12.3 per cent to RM1.04 billion in the third quarter ended March 31, 2024 (3Q24) from RM929.96 million a year ago, underpinned by higher interest income and provision writeback.
HLB registered marginally higher revenue of RM1.44 billion for the quarter compared to RM1.4 billion previously, as shown in its filing to Bursa Malaysia.
As a result, its earnings per share was higher at 50.97 sen compared to 45.39 sen in 3Q23.
For the cumulative period of nine months (9MFY24), HLB's net profit grew 7.1 per cent to RM3.16 billion from RM2.95 billion a year ago, while revenue declined to RM4.29 billion from RM4.38 billion.
The group's net interest margin (NIM) improved to 1.87 per cent from 1.85 per cent in the previous quarter, marking a consecutive fourth quarter of improvement.
Its operating expenses (opex) remained stable for the quarter with a cumulative amount at RM1.71 billion for 9MFY24, as the group continued to manage it tightly with focus on strategic cost management initiatives.
The group's gross loans, advances and financing maintained a robust growth momentum, with an expansion of 7.8 per cent year-on-year (YoY) to RM187.8 billion, contributed by expansion in our key segments of mortgage, auto loans, SME and commercial banking, as well as overseas operations.
Its domestic loans or financing growth of eight per cent YoY came in ahead of the industry growth rate of six per cent YoY.
Its customer deposits for 9MFY24 rose 4.7 per cent YoY to RM212.4 billion, with current-account-savings-account (CASA) growth of 7.6 per cent YoY to RM65 billion and stable CASA ratio at 30.6 per cent.
The bank maintained a healthy asset quality position with a low gross impaired loan (GIL) ratio of 0.57 per cent whilst loan impairment coverage (LIC) ratio is well positioned at 154.4 per cent as at March 31, 2024.
Capital position of the bank is healthy and supportive of future growth opportunities with CET 1, Tier 1 and total capital ratios at 12.5 per cent, 13.5 per cent and 15.5 per cent respectively as at March 31, 2024.
HLB group managing director and chief executive officer Kevin Lam said it remains cautiously optimistic about the business outlook and macroeconomics for the remainder of FY24, as it focuses on the execution of its business strategies to deliver sustainable outcomes to its stakeholders.
"With that, we are pleased with the underlying sound 9MFY24 performance led by sustained loans/financing growth, healthy asset quality, solidified with prudent funding and liquidity positions," he said in a separate statement.
On its prospects, Lam said growth trajectory in the Malaysian economy is expected to improve over 2024, growing moderately by four to five per cent this year.
He added that resilient domestic demand underpinned by continuous improvement in the labour market, along with more robust external demand riding on sustained growth in the world economy and upturn in the global tech cycle, will be the main growth catalysts.
"That said, downside risks prevail, stemming from potential geopolitical competition, tentative signs of heightening upside inflationary risks, delay in policy easing especially in the US, as well as real estate and structural slowdown in China.
"In our journey to be the best-run bank in Malaysia, we remain steadfast in the execution of our three-five year strategic plan while holding on to our core values and strategic boundaries.
"In order to uphold our unwavering brand promise of Built Around You, we continue to prioritise the delivery of innovative and customer-centric banking solutions to our customers," he noted.
To pursue regional growth opportunities and build a strong Asean franchise, Lam said the group continues to enhance its transaction banking network with top-notch digital capabilities while supporting its employees to develop to their greatest potential.
