KUALA LUMPUR (May 29): Hong Leong Bank Bhd (HLB) said its net profit for the third quarter ended March 31, 2020 (3QFY20) declined 15.69% to RM534.79 million, from RM633.9 million a year earlier.

HLB attributed the decline to net income coming in lower at RM37.7 million, operating expenses rising to RM8.1 million, and a RM121.2 million allowance for impairment losses on loans, advances and financing.

Quarterly earnings per share stood lower at 26.13 sen, from 30.98 sen in the corresponding quarter in the previous year, the bank's exchange filing showed.

Revenue dropped 3.24% to RM1.13 billion, from RM1.17 billion previously.

The bank's personal financial services segment recorded a lower pre-tax profit of RM199.6 million, down from RM276.2 million in the year-ago 3Q.

Meanwhile, the business and corporate banking segment saw its pre-tax profit fall to RM201.4 million from RM177.5 million.

The global markets segment saw its pre-tax profit rise to RM135.9 million from RM112.7 million.

However, HLB's international banking segment's pre-tax profit fell to RM119.7 million from RM154.5 million previously.

For the cumulative nine months ended March 31, 2020 (9MFY20), HLB said its net profit fell 5.07% to RM1.93 billion, from RM2.03 billion in the previous year. Nine-month revenue rose slightly to RM3.58 billion from RM3.56 billion.

"Core total income for 9MFY20 expanded 3.3% year-on-year (y-o-y) to RM3,582 million, underpinned by healthy 6.6% y-o-y expansion in loan/financing book, despite pressure from the two OPR (overnight policy rate) cuts in January 2020 and March 2020, which resulted in net interest margin (NIM) for the nine months being moderated to 1.97%," said HLB group managing director and CEO Dominic Fuda.

"Excluding the impact [of the two OPR cuts in January and March], our NIM would have been stable at 2.02%, reflecting the bank's solid fundamentals.

"Impact to NIM for 3QFY20 was well contained within 20bps (basis points) quarter-on-quarter despite the combined 50bps cut, as a result of pre-emptive strategies that were in place," he added in a statement.

On the bank's prospects, Fuda said HLB will continue to assist small and medium enterprises (SMEs) and local communities during the current difficult times due to the Covid-19 pandemic.

"We are steadfast in our commitment to helping the local communities through this very difficult period, where SMEs and individuals especially, are the most vulnerable.

"We will continue to provide the necessary support and collaborate closely with our customers to make sure they are able to return to a state of financial normalcy as economies adjust to the fight against Covid-19 and the 'new norm' operating environment," he said.

Shares in HLB were trading 0.74% or 10 sen higher at RM13.66 as of 3.15pm, valuing the group at RM29.61 billion.