KUALA LUMPUR (Aug 28): Hong Leong Bank Bhd's (HLBB) net profit for the fourth quarter ended June 30, 2019 rose 1.67% year-on-year to RM636.45 million from RM626.01 million, on the back of higher share of profit from its associates.

In a filing to Bursa Malaysia today, HLBB said revenue for the quarter slipped to RM1.17 billion from RM1.18 billion earlier.

Eanings per shares was 31.11 sen versus 30.6 sen previously.

HLBB proposed a final dividend of 34 sen per share for the financial year ended June 30 (FY19), subject to shareholder approval.

For FY19, HLBB's net profit rose to RM2.66 billion from RM2.64 billion a year earlier. However, revenue fell to RM4.73 billion against RM4.84 billion previously.

In a separate statement, HLBB managing director and chief executive officer Domenic Fuda said FY19 was a challenging year, with ongoing funding cost pressure, coupled with global economic challenges and cautious business sentiment.

"Total income and net profit after tax for the year stood at RM4.73 billion and RM2.67 billion respectively, attributed to expansion in loan book and continued outstanding asset quality complemented with consistently strong contribution from our associates," he said.

Fuda said owing to the overnight policy rate (OPR) cut in May 2019, net interest margin (NIM) for the year fell to 1.96%.

"Even so, we remain sanguine as impact to NIM for the 4th quarter (4QFY19) was managed within 11bps quarter-on-quarter (q-o q) despite a 25-basis-point cut in OPR in early May 2019.

"This is achieved through a mix of strategic and tactical decisions that leaves us confident moving forward that we can improve our NIM%, especially off the back of such commendable growth in our loan book without compromising asset quality," he said.

Fuda said the business performance was reflective of HLBB's continued efforts in enhancing and expanding services through customer-centred approach in products and services offerings.

On its outlook, Fuda said the bank remains steadfast in becoming a highly digital and innovative ASEAN financial services institution.

"Our focus is to provide clients with simple and relevant, personal and fair banking experiences while strengthening our organisational culture within which our people continue to thrive.

"We should continue to see growth opportunities in the coming year while we will maintain our efforts to revamp our cost structure through a pervasive digital transformation, enabling us to achieve sustainable growth and enhance stakeholders' value," he said.

At the midday break, HLBB slipped 0.97% or 16 sen to RM16.32 for a market capitalisation of RM35.37 billion.