KUALA LUMPUR, 23 FEBRUARY 2016 - Hong Leong Financial Group Berhad ("HLFG” or "the Group”) today announced its first half results for the six months ended 31 December 2015 ("1H16”).

  • Excluding Hong Leong Bank Berhad’s ("HLB”) one-off Mutual Separation Scheme ("MSS”) cost of RM172 million, HLFG would have recorded a pretax profit of RM1,356 million in 1H16.
  • HLFG’s insurance contribution continued to grow with pretax profit increasing 17.7% y-o-y to RM131.1 million in 1H16.
  • Book value per share increased from RM12.48 as at 30 June 2015 to RM13.05 as at 31 December 2015.
  • Both HLFG and HLB successfully completed their respective rights issues in December 2015; strengthening their capital positions in advance of regulatory requirements.

Commercial Banking

  • HLFG’s Commercial Banking division, HLB recorded a pretax profit of RM1,051 million in 1H16. Excluding the effect of the MSS, HLB would have recorded a pretax profit of RM1,223 million in 1H16.
  • Non-interest income improved by RM131.4 million y-o-y in 1H16, mainly due to higher forex gains.
  • Gross loans grew by 9.9% y-o-y to RM118 billion whilst customer deposits grew by 9.5% y-o-y to RM145 billion.
  • HLB continues to maintain a strong financial position. The Loan/Deposit ratio remained strong at 81.5% as at 31 December 2015, among the lowest in the industry amidst an environment of increasing competition for deposits.
  • Asset quality remained good with Net Impaired Loans Ratio at 0.39% as at 31 December 2015, which is amongst the lowest in the industry. Loan loss coverage remains ample at 126%.

Insurance

  • HLA Holdings Sdn Bhd, HLFG’s insurance division, recorded a pretax profit of RM131.1 million in 1H16, an increase of 17.7% or RM19.8 million y-o-y, largely due to lower actuarial reserves arising from higher interest rates.
  • The underlying longer-term insurance business indicators continued to improve. Hong Leong Assurance Bhd’s gross premiums grew by 5% y-o-y to RM1,297 million in 1H16 and its Non Par/ Par product mix has shown a further improvement over the last 12 months. 
  • The focus remains on growing and improving the quality of our premium base, increasing profitability drivers as well as growth across multiple distribution channels.

Investment Banking

  • The Investment Banking division under Hong Leong Capital Berhad, maintained its pretax profit at RM34.3 million in 1H16.