This article first appeared in The Edge Financial Daily on May 31, 2018

KUALA LUMPUR: Hong Leong Bank Bhd's (HLB) net profit rose 21.2% to RM690.03 million in the third financial quarter ended March 31, 2018 (3QFY18) from RM569.54 million a year ago, mainly due to higher net income of RM132.3 million, lower allowance for impairment losses on loans, advances and financing of RM33.1 million, and higher share of profit from associated company of RM18.5 million.

However, this was mitigated by higher operating expenses of RM25.8 million in the current quarter under review.

Earnings per share (EPS) came in higher at 33.73 sen for 3QFY18 compared with 27.84 sen for 3QFY17.

Quarterly operating income also increased 11.8% to RM1.26 billion in 3QFY18 from RM1.12 billion a year ago.

For the cumulative nine months (9MFY18), the group's net profit jumped 21.1% to RM2.01 billion from RM1.66 billion. Operating income increased 7.8% to RM3.66 billion from RM3.4 billion.

HLB said net interest income for 9MFY18 continued to grow at a healthy pace of 6.4% year-on-year to RM2.65 billion. Correspondingly, net interest margin for 9MFY18 increased four basis points to 2.12% on the back of prudent pricing and funding cost management.

In a statement yesterday, HLB group managing director and chief executive officer Domenic Fuda said executing its digital strategy remains the group's key priority to transform its engagement with customers.

At the group level, Hong Leong Financial Group Bhd (HLFG) reported a 20% increase in net profit to RM502.56 million in 3QFY18 from RM418.75 million a year ago, thanks to stronger contribution from HLB.

The group also declared a second interim dividend of 27 sen per share for the financial year ending June 30, 2018, payable on June 26.