Hong Leong’s 1Q net profit drops to RM490m

The group says despite subdued business environment, it continues to show steady results across its core businesses


HONG Leong Financial Group Bhd’s (HLFG) net profit for the first quarter ended Sept 30, 2019 (1Q19), dropped 3.07% year-on-year (YoY) to RM490.2 million, from RM505.7 million a year ago where it recognised one-off gains from an equity divestment.

The group said excluding the one-off gains from an equity divestment of RM72.2 million recorded in 1Q19, its normalised profit before tax for the current quarter was higher than in the previous corresponding quarter by RM56.7 million or 6.6%.

It added that the increase was mainly due to higher contribution from the commercial banking and asset management divisions.

HLFG’s earnings per share for 1Q19 was lower at 43.1 sen, compared to 44.2 sen in the previous year.

Its quarterly revenue also decreased 3.62% YoY to RM1.33 billion, against RM1.38 billion in the previous year.

“Despite the subdued business environment, we continue to show steady results across our core businesses. This was coupled with continued reinvestment of cost-saving actions into digital initiatives and judicious risk management during the year,” HLFG president and CEO Tan Kong Khoon said in a statement yesterday.

He added that the group remains committed in the execution of its business and digital strategies to build long-term sustainable value for the shareholders.

HLFG has declared a first interim single-tier dividend of 13 sen to be paid on Dec 27, 2019.

Meanwhile, Hong Leong Bank Bhd’s (HLB) net profit in 1Q19 decreased 2.59% YoY to RM688.58 million from RM706.92 million in the same quarter last year due to lower net income of RM33.9 million and lower share of profits from associated companies amounted to RM1.9 million.

The bank’s earnings per share for July to September, 2019 declined to 33.65 sen, compared to 34.55 sen in the previous year.

Its quarterly revenue also down 2.4% YoY to RM1.22 billion, from RM1.25 billion in the previous year.

HLB group MD and CEO Domenic Fuda said the banking sector remains challenging amid ongoing external headwinds and soft consumer sentiment.

“Business momentum continued its growth traction with gross loans and financing expanding 6.8% YoY despite a relatively softer business environment during the quarter.

“Asset quality remained uncompromised, as gross impaired loan ratio was solid at 0.81%. We remain confident that with our strategic priorities in place, we should continue to see further operational improvements and business growth going forward,” he said in a statement yesterday.

The earnings for Hong Leong Capital Bhd slightly decreased to RM23.73 million in 1Q19, from RM24.03 million last year due to taxation loss.

In an exchange filing yesterday, the company noted a taxation loss of RM768,000 compared to a taxation gain of RM1.32 million in the previous year.

Its earnings per share for the three months was lower at 9.83 sen, against 9.96 sen in the previous year.

Hong Leong Capital’s quarterly revenue, however, increased 8.72% YoY to RM89.81 millon from RM82.6 million in the previous year.