KUALA LUMPUR (Aug 28): Hong Leong Financial Group Bhd's (HLFG) net profit for the fourth quarter ended June 30, 2020 (4QFY20) rose 12.04% to RM525.14 million from RM468.7 million a year earlier on higher contributions from its insurance, investment banking and stockbroking divisions amid a challenging business environment due to the Covid-19 pandemic.
HLFG's consumer banking arm Hong Leong Bank Bhd, however, reported weaker results. HLFG undertakes its insurance business via HLA Holdings Sdn Bhd while investment banking and stockbroking operations are placed under Hong Leong Capital Bhd.
In statements to Bursa Malaysia today, HLFG said group revenue rose to RM1.43 billion in 4QFY20 from RM1.34 billion a year earlier.
"The board of directors of HLFG is pleased to propose a final single-tier dividend of 25 sen per share for the financial year ended June 30, 2020. The final single-tier dividend is subject to shareholders' approval at the forthcoming annual general meeting," HLFG said.
HLFG said today Hong Leong Bank's profit before tax decreased 11.5% to RM648.7 million in 4QFY20 from RM733.1 million.
"The decrease was mainly due to higher allowance for impairment losses on loans, advances and financing of RM144.3 million and higher allowance for impairment losses on other assets of RM0.8 million.
"This was however mitigated by higher revenue of RM28.8 million, lower operating expenses of RM9.2 million and higher share of profit from associated companies of RM22.8 million," HLFG said.
HLFG said HLA Holdings' profit before tax increased to RM173.1 million in 4QFY20 from RM104.5 million a year earlier while Hong Leong Capital's profit before tax rose to RM37.7 million from RM20.8 million.
In quarterly terms, HLFG said group profit before tax increased 42.2% to RM858.3 million in 4QFY20 from the preceding 3QFY20.
For the full FY20, HLFG said group net profit fell to RM1.86 billion from RM1.92 billion a year earlier while revenue was lower at RM5.26 billion versus RM5.28 billion.
Hong Leong Bank and Hong Leong Capital also proposed dividends and announced their 4QFY20 and full-year financials in separate filings with Bursa today.
Hong Leong Bank said it recorded a net profit drop to RM569.42 million for 4QFY20 from RM636.45 million a year earlier while revenue grew to RM1.2 billion from RM1.17 billion.
For the full FY20, net profit fell to RM2.49 billion from RM2.66 billion a year earlier although revenue grew to RM4.78 billion from RM4.73 billion, according to Hong Leong Bank.
Hong Leong Bank proposed a final single-tier dividend of 20 sen per share for FY20.
Meanwhile, Hong Leong Capital plans to pay a final single-tier dividend of 23 sen per share for the financial year.
Hong Leong Bank and Hong Leong Capital said their respective dividends are subject to shareholders' approval at the companies' forthcoming annual general meetings.
Hong Leong Capital's proposed dividend followed the company's quarterly and full-year net profit and revenue improvements.
The company said 4QFY20 net profit rose substantially to RM36.3 million from RM5.23 million a year earlier while revenue was higher at RM97.16 million versus RM82.49 million.
For the full FY20, Hong Leong Capital said cumulative net profit climbed to RM94.19 million from RM67.71 million a year earlier while revenue increased to RM337.08 million from RM320.2 million.
Edited by Chong Jin Hun
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