KUALA LUMPUR (Aug 30): Hong Leong Bank Bhd's net profit grew 32% to RM907.64 million for the fourth quarter ended June 30, 2022 (4QFY22) from RM689.48 million a year ago, driven mainly by higher net income, lower provisions coupled with some writebacks of previously impaired losses from financial investments and other assets.
The group also recorded an RM89.5 million increase in share of profit from associated company, its Bursa Malaysia filing showed.
Hong Leong Bank declared a final dividend of 37 sen per share, bringing the full FY22 dividend to 55 sen per share, with a dividend payout ratio of 35%. This compares to the dividend of 35.22 sen per share for 4QFY21 and 50 sen per share for FY21.
Net interest income rose by 1.2% to RM928.56 million for 4QFY22 from RM917.92 million, while other operating income climbed 81% to RM330.54 million from RM182.39 million, driven by unrealised gain from revaluation of financial assets’ fair value and higher fee income.
Net profit for the full FY22 rose 15% to RM3.29 billion, from RM2.86 billion in FY21, while net interest income grew 8.6% to RM3.75 billion from RM3.46 billion.
Gross loans expanded 8% to RM168.2 billion in FY22, backed by expansions in the mortgage, small and medium enterprise (SME), and corporate business segments.
Net interest margin (NIM) was 2.14% in FY22, on par with FY21 NIM of 2.14% and higher than FY20’s 1.88%.
Hong Leong Bank also said its asset quality remained solid with a stable gross impaired loan (GIL) ratio of 0.49% as at FY22 while its loan impairment coverage (LIC) ratio was at 211.8%.
This compares to a GIL ratio of 0.46% in FY21 and 0.61% in FY20, while its LIC ratio was 247% in FY21 and 142% in FY20, according to the group’s FY21 annual report.
Going forward, Hong Leong Bank said although the Malaysian economy is expected to strengthen further as the nation enters an endemic phase, downside risks stemming from further escalation of geopolitical conflicts, lingering supply disruptions, heightened financial market volatility and intensified cost pressures could weigh on overall growth prospects.
“In our role as a customer-centric bank, we are resolute in providing steadfast support to both our existing and new clients on their recovery efforts in the endemic phase of the Covid-19 pandemic as well as navigate through the current uncertain economic cycle.
“The dynamic business environment will no doubt provide us with new growth opportunities, which we will strive to capture by being adaptive and responding swiftly to the changing landscape,” it said.
Shares of Hong Leong Bank were two sen or 0.1% lower at RM20.78 at market break, giving it a market capitalisation of RM45.05 billion.