KUALA LUMPUR (Nov 30): Hong Leong Financial Group Bhd (HLFG) recorded a net profit of RM741.64 million for the first quarter ended Sept 30, 2023 (1QFY2024), up 10.78% from RM669.47 million in the same period a year ago, as it saw an improvement across all operating companies and reversal of impairment losses.
Notably, during the quarter, it saw a write-back of impairment losses on loans, advances and financing of RM51.24 million and higher share of results from its associates.
The increased income was offset by higher operating expenses of RM17 million from its commercial banking division Hong Leong Bank Bhd (HLB) and RM20 million from its insurance division HLA Holdings Sdn Bhd (HLAH), HLFG told Bursa Malaysia.
Its earnings per share expanded to 65.4 sen from 59 sen in 1QFY2023, while revenue for the quarter slipped 2.38% to RM1.56 billion from RM1.6 billion in the prior year.
Commenting on the performance of its operating companies, HLFG said HLB's profit before tax (PBT) increased by 4.7% to RM1.24 billion from RM1.19 billion underpinned by strong loan or financing expansion, sustained non-interest income and improved asset quality metrics, coupled with solid contributions from associates.
Meanwhile, HLAH’s 1QFY2024 PBT stood at RM88 million, up 84.9% from RM47 million in a year ago, due to higher investments, mark-to-market valuation gains from its subsidiaries and improved share of profits from its associate.
The investment banking division, Hong Leong Capital Bhd, saw PBT climb 31.8% year-on-year to RM27 million from RM21 million, mainly from better proprietary investment performance and higher profit contribution from Hong Leong Investment.
This translates to an annualised return on average equity (ROE) of 10.8%, said HLFG. The bank’s book value per share increased to RM24.25 from RM23.94 a year ago.
Looking ahead, HLFG will remain vigilant and maintain a cautious outlook for the rest of FY2024 as global economic headwinds continue to persist, said its president and chief executive officer Tan Kong Khoon in a statement.
“Guided by our strategic priorities, the group will continue to invest in our human capital, accelerate our digitalisation transformation while keeping a sharp focus on risk management and further integrate environmental, social and governance (ESG) considerations into the way we conduct our business to deliver sustainable business performance and long-term value for all stakeholders,” he added.
At Thursday’s noon break, shares of HLFG dropped 16 sen or 0.98% to RM16.24, giving it a market capitalisation of RM18.64 billion.