KUALA LUMPUR (Feb 26): Hong Leong Bank Bhd (HLB) (KL:HLBANK) posted a 5.53% year-on-year (y-o-y) rise in net profit for the second quarter ended Dec 31, 2024 (2QFY2025), as higher net interest income (NII) and Islamic banking contributions boosted earnings.

The bank recorded a net profit of RM1.15 billion in 2QFY2025, up from RM1.09 billion in the same quarter last year. Revenue increased 11.42% y-o-y to RM1.63 billion, compared with RM1.46 billion previously.

It declared a dividend of 28 sen per share, payable on March 26.

For the first six months ended Dec 31, 2024 (1HFY2025), the bank's net profit rose 5.68% to RM2.24 billion, from RM2.12 billion a year ago, as its total revenue surged 16.47% to RM3.23 billion, from RM2.86 billion in 1HFY2024.

For 1HFY2025, NII increased 8.3% y-o-y to RM2.47 billion, led by strong loans and financing growth, as well as effective funding cost management. Net interest margin (NIM) improved six basis points y-o-y to 1.91%.

Meanwhile non-interest income (NOII) surged 31.3% y-o-y to RM757 million, driven by higher wealth management income and favourable gains from treasury activities and foreign exchange.

During the quarter, the bank's gross loan and financing portfolio grew 7.7% to RM199.4 billion, contributed by an expansion in the mortgage, auto loans, SME (small and medium-sized enterprise) and commercial banking, as well as key overseas markets.

The bank's gross impaired loan (GIL) ratio stood at 0.55%, while its loan impairment coverage ratio was 139.0%.

In terms of operating expenses, its cost-to-income ratio (CIR) improved sequentially to 38.8%, from 39.1% in 1QFY2025.

On prospects, HLB group managing director and chief executive officer Kevin Lam said the bank will leverage its strengths in technology and artificial intelligence (AI) to deliver innovative banking solutions that effectively cater to customer needs across all touchpoints, embodying its brand promise of “Built Around You” to its customers.

As for its carbon-neutral ambition, the bank remains committed in implementing its environmental, social and governance (ESG) strategies and practices internally and externally, to deliver meaningful impact to all of its stakeholders.

At Wednesday midday break, HLB shares were down two sen or 0.1% at RM20.68, valuing the company at RM44.83 billion. Year to date, the stock has gained marginally at 0.5%.

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