KUALA LUMPUR (May 30): Hong Leong Bank Bhd (KL:HLBANK), the banking arm of tycoon Tan Sri Quek Leng Chan, said on Thursday its net profit rose 12% year-on-year (y-o-y) in the third quarter, thanks to higher interest income and provision writeback.

Net profit for the three months ended March 31, 2024 (3QFY2024) was RM1.04 billion compared to RM929.96 million over the same period a year earlier, Hong Leong Bank said in an exchange filing. Net interest income rose 15% y-o-y to RM1.22 billion while non-interest income fell 38% to RM212.1 million.

“To pursue regional growth opportunities and build a strong Asean franchise, we continue to enhance our transaction banking network with top-notch digital capabilities while supporting our employees to develop to their greatest potential,” Hong Leong Bank said.

In 3QFY2024, Hong Leong Bank booked writeback of impairment losses on loans, advances and financing totalling RM26.3 million. Operating expenses, meanwhile, were marginally higher at RM576.85 million.

No dividend was declared for the quarter.

For its first nine months, net profit climbed 7.1% to RM3.16 billion versus RM2.95 billion over the same period last year. Net interest income was steady at RM3.57 billion while non-interest income fell to RM831 million for the nine-month period due to lower income from investment and trading.

“We remain cautiously optimistic with the business outlook and macroeconomics for the remainder of FY2024, as we focus on the execution of our business strategies to deliver sustainable outcomes to our stakeholders,” Hong Leong Bank managing director Kevin Lam said in a statement.

Net interest margin — a measure of profitability from interests charged on loans after deducting returns paid to depositors — came in at 1.85% at the end of March, thanks to strong lending growth.

Current-account-savings-account growth stood at 7.6%, while gross loans and financing grew 7.8%.

In terms of asset quality, gross impaired loans — debts deemed unrecoverable as a percentage of total loans — came in at 0.57% while loan impairment coverage was 154.4% at the end of the period.

Hong Leong Bank’s common equity tier 1 capital — a measure of a bank’s capital strength based on the highest quality of regulatory capital — stood at 12.5%.

Shares of Hong Leong Bank closed four sen or 0.2% lower at RM19.26, valuing the bank at RM41.75 billion.