KUALA LUMPUR: Hong Leong Bank Bhd’s (HLB) net profit decreased 8.13 per cent to RM633.90 million in the third-quarter (Q3) ended March 31, 2019, from RM690.03 million a year ago.
In an exchange filing today, HLB said the lower earnings was mainly due to lower revenue of RM89.2 million and lower writeback of allowance for impairment losses on financial investments of RM800,000.
The bank’s revenue dropped 7.14 per cent to RM1.17 billion from RM1.26 billion, dragged by lower net income, higher operating expenses and lower write back of impairment losses on financial investments.
For the nine months, HLB’s net profit grew 0.99 per cent to RM2.03 billion from RM2.01 billion a year ago, while revenue reduced 2.73 per cent to RM3.56 billion from RM3.66 billion.
HLB’s total income for the nine months stood at RM3.56 billion, driven mainly by a healthy growth in loan book.
Its net interest income was lower at RM2.57 billion, on the back of still elevated funding cost pressure during the period under review.
Correspondingly, net interest margin (NIM) for the nine months fell to 1.98 per cent, while NIM in Q3 saw an uptick of two basis points quarter-on-quarter to 2.00 per cent on prudent pricing management.
HLB said its operating expenses remained well-managed, recording marginally higher by 0.8 per cent year-on-year at RM1.56 billion for the nine months.
“We continue to reap benefits from our digitisation efforts and strategic cost management initiatives. Quarterly expenses were 0.2 per cent lower than the corresponding quarter the year before. Accordingly, cost-to-income ratio for 9MFY19 stood at 43.9 per cent,” HLB group managing director and chief executive officer Domenic Fuda said.
He said its loan growth momentum had grown 6.5 per cent to RM133.6 billion year-on-year, despite on-going economic challenges.
Fuda said the Malaysian economy was expected to remain on a steady growth path in 2019, as a steady labour market, ongoing fiscal reforms, and anticipation of revival in investment infrastructure spending are expected to provide much needed support for growth in domestic business activities.
In a separate filing, Hong Leong Financial Group Bhd said its Q3 net profit had slipped 7.8 per cent to RM463.42 million from RM502.56 million due to lower contribution across all the operating divisions.
Group revenue decreased per cent to RM1.31 billion from RM1.39 billion a year ago.
The group announced a second interim single tier dividend of 29 sen per share for the year ending June 30, 2019, payable on June 26.