Hong Leong Financial's 2Q net profit falls 37.8% on MSS cost

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KUALA LUMPUR (Feb 23): Hong Leong Financial Group Bhd (HLFG), the country's sixth-largest lender, saw its net profit fall 37.8% to RM263.45 million or 24.5 sen a share in the second financial quarter ended Dec 31, 2015 (2QFY16) from RM423.84 million or 40.5 sen a share a year ago, mainly due to lower contribution from its banking and insurance division.

Revenue, however, rose 2% to RM1.17 billion from RM1.14 billion in 2QFY15.

The quarterly net profit drop dragged down earnings for the six-month period ended Dec 31, 2015 (1HFY16) by 20.3% to RM650.33 million or 61.2 sen per share from RM815.99 million or 77.9 sen in 1HFY15, mainly due to lower contribution from the banking division.

Revenue rose 3.8% to RM2.31 billion from RM2.23 billion in 1HFY15.

In a statement today, the financial group said excluding Hong Leong Bank Bhd's one-off mutual separation scheme cost of RM172 million, it would have a pre-tax profit of RM1.35 billion in 1HFY16.

The group also said its insurance contribution continued to grow with pre-tax profit increasing 17.7% year-on-year to RM131.1 million.

It added that book value per share increased from RM12.48 as at June 30, 2015 to RM13.05 as at Dec 31, 2015.

Shares of HLFG were up 18 sen or 1.29% at RM14.14 at noon market close, for a market capitalisation of RM16.23 billion.