KUALA LUMPUR: Hong Leong Bank Bhd's (HLB) net profit rose to RM1.03 billion in the first quarter ended Sept 30, 2023 from RM981 million in the same quarter a year earlier,
In a filing with Bursa Malaysia, HLB said its revenue, however, dropped to RM1.39 billion from RM1.5 billion in the previous comparative quarter.
Consequently, the group registered a higher return on equity of 12.1 per cent for the quarter, attributed to strong loan and financing expansion, sustained non-interest income and improved asset quality metrics, coupled with solid contributions from associates.
Total income in 1QFY24 was RM1.39 billion with net interest income improving 3.4 per cent quarter-on-quarter (q-o-q) to RM1.13 billion and net interest margin rising to 1.84 per cent from 1.83 per cent in the preceding quarter.
Non-interest income in 1QFY24 was sustained at RM268 million with a non-interest income ratio of 19.2 per cent.
Operating expenses, meanwhile, stood at RM556 million while cost-to-income ratio remained healthy at 39.9 per cent.
During the quarter, the group's gross loans and financing portfolio grew 7.2 per cent to RM181.7 billion led by growth across our mortgage, auto loans, SMEs and commercial banking segments as well as overseas operations.
Customer deposits rose 6 per cent year-on-year (y-o-y) to RM209.2 billion with current account savings account (Casa) standing at RM61.9 billion.
"We commenced the new financial year with a set of encouraging results for Q1FY24 led by sustained loan/financing growth, healthy asset quality, prudent funding and liquidity positions amidst the ongoing external headwinds and volatility in global markets.
"We remain vigilant and resolute in executing our strategic priorities and driving our continued business expansion," said HLB group managing director and chief executive officer Kevin Lam.
Meanwhile, the bank's parent company, Hong Leong Financial Group announced its own net profit of RM741.65 million for the quarter, up from RM669.47 million in the previous corresponding quarter.
Basic earnings per share in 1QFY24 rose to 65.4 sen from 59 sen in the comparative quarter.
Revenue, meanwhile, was lower at RM1.57 billion compared to RM1.6 billion in the previous corresponding quarter.
HLFG president and chief executive officer Tan Kong Khoon said the positive performance is a testament to the resilience of its operating companies despite the turbulent economic environment posed by elevated interest rates and volatile market conditions.
"Guided by our strategic priorities, the group will continue to invest in our human capital, accelerate our digitalisation transformation while keeping a sharp focus on risk management and further integrate Environmental, Social and Governance (ESG) considerations into the way we conduct our business to deliver sustainable business performance and long-term value for all stakeholders," he said in a statement.