Hong Leong Bank's 2Q net profit falls 37.6%, pays 15 sen dividend

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KUALA LUMPUR (Feb 23): Hong Leong Bank Bhd saw its net profit in the second quarter ended Dec 31, 2015 (2QFY16) fell 37.62% to RM344.08 million or 19.43 sen per share from RM551.6 million or 31.24 sen per share a year ago, on higher operating expenses, higher charge on allowance for impairment losses on loans, advances and financing coupled with lower share of profit from associated company.

A filing with Bursa showed that its quarterly revenue, however, rose 4.9% to RM1.07 billion from RM1.02 billion in 2QFY15.

Hong Leong Bank has proposed an interim single tier dividend of 15 sen per share, payable March 24. EX-date and entitlement date fall on March 8 and March 10 respectively, according to a separate filing.

For the six-month period ended Dec 31, 2015 (1HFY16), Hong Leong Bank's net profit dipped 23% to RM847.04 million or 47.83 sen per share from RM1.1 billion or 62.26 sen per share a year earlier.

Revenue rose 2.94% to RM2.1 billion from RM2.04 billion in 1HFY15.

In a statement today, Hong Leong Bank group managing director cum chief executive officer Domenic Fuda said that excluding the one-off cost of RM172 million from the mutual separation scheme (MSS) in December 2015, the group's business as usual net profit for 1HFY16 would have been RM978 million, underpinned by lower write-backs of loan impairment allowances coupled with lower contribution from the associates.

On its prospects, Hong Leong Bank said growth outlook is expected to remain modest going into 2016, supported by moderate growth in domestic demand and a still soft external environment.

"Uncertainties in financial markets coupled with slower growth in global and regional economies are expected to have some repercussions on Malaysia given the openness of its economy,

"Although overall growth is expected to moderate, it will still be supported by a diversified economic structure, low inflation, relatively benign unemployment as well as domestic consumption," said the bank.

At 12.30pm, Hong Leong Bank was traded unchanged at RM13.16, giving it a market capitalisation of RM28.53 billion.