Hong Leong Bank Bhd chief financial officer Malkit Singh Maan (left), with group managing director and chief executive officer Kevin Lam Sai Yoke, at the media briefing on Thursday. (Photo by Shahrin Yahya/The Edge)

KUALA LUMPUR (Aug 29): Hong Leong Bank Bhd (KL:HLBANK), Malaysia’s fifth-largest bank by assets, said on Thursday its net profit rose nearly 20% year-on-year (y-o-y) in the fourth quarter thanks to higher operating income and provisions writeback.

Net profit for the three months ended June 30, 2024 (4QFY2024) was RM1.03 billion compared to RM864.68 million over the same period a year earlier, Hong Leong Bank said in an exchange filing.

Net interest income grew 10.7% y-o-y to RM1.21 billion, led by expansion in loan/financing and effective funding cost management.

Meanwhile, non-interest income grew 26.5% y-o-y to RM271 million, on the back of higher fee income from wealth management and credit card related fees, coupled with gains in foreign exchange.

The company booked writeback of impairment on losses on loans, advances and financing totalling RM31.15 million compared to allowance of RM14.4 million in 4QFY2023.

A final dividend of 43 sen per share was also declared for the current quarter payable on a date to be determined later. That compares to 38 sen per share declared in the previous corresponding quarter.

Quarterly revenue grew 13.31% to RM1.48 billion compared to RM1.30 billion recorded in 4QFY2023.

Meanwhile, its total income grew 13.3% to RM1.48 billion, underpinned by expansion in loan/financing portfolio and sustained non-interest income distribution.

As of June 30, Hong Leong's gross loans and financing grew 7.3% y-o-y to RM194.9 billion, contributed by its expansion in mortgage, auto loans, small and medium enterprise (SME) and commercial banking segments, as well as from its overseas market.

In terms of asset quality, gross impaired loans (GIL) ratio — debts deemed unrecoverable as a percentage of total loans — improved to 0.53% from 0.57%, while loan impairment coverage (LIC) ratio was 155.0%. Inclusive of the value of securities held in its GIL, the bank’s LIC ratio is sufficient at 225.0%.

For the financial year ended June 30, 2024 (FY2024), Hong Leong reported a 9.9% growth in its net profit to RM4.20 billion compared to RM3.82 billion over the same period last year, thanks to higher loan/financing growth, improved asset quality metrics and healthy contributions from its associates.

As of June 30, total income expanded 1.5% to RM5.77 billion. Its net interest income for FY2024 grew 2.6% to RM4.67 billion while non-interest income came in at RM1.10 billion.

Hong Leong’s return on equity for FY2024 remained unchanged from a year earlier at 11.8%.

Meanwhile, customer deposits increased 4.1% to RM220.4 billion, with current accounts and saving accounts (Casa) delivering growth of 10.0% to RM71.6 billion as of June 30.

This had translated into an improved Casa ratio of 32.5% as a result of higher community deposit acquisition initiatives and cash management solutions for its clients.

At 2.57pm, Hong Leong Bank shares rose 14 sen or 0.66% to RM21.24, valuing the company at RM46 billion.