KUALA LUMPUR, 28 NOVEMBER 2018 - Hong Leong Financial Group Berhad (“HLFG”) today announced its first quarter results for the period ended 30 September 2018 (“1QFY19”).

  • Group profit before tax grew 10.5% year-on-year (“y-o-y”) to RM929 million due to stronger contributions from all its operating businesses; the commercial banking division, Hong Leong Bank Berhad (“HLB”), the insurance division, HLA Holdings Sdn Bhd (“HLAH”) and the investment banking division, Hong Leong Capital Berhad (“HLCB”).
  • Book value per share increased from RM15.55 as at 30 June 2018 to RM15.88 as at 30 September 2018.

Hong Leong Financial Group’s President & Chief Executive Officer, Mr Tan Kong Khoon commented, “We are pleased to have made a good start in 1QFY18 for our new financial year amidst a challenging business environment. It is a measure of our management focus that our core businesses continue to show strong credit and liquidity risk metrics. We have a clear business and digital strategy which we are executing diligently to build long-term sustainable value for our shareholders”.

Commercial Banking

  • HLB’s profit before tax grew 9.1% y-o-y to RM851 million due to higher non-interest income.
  • Residential mortgages increased 8.0% y-o-y to RM62.6 billion as at 30 September 2018.
  • HLB’s Loan/Deposit ratio remained sound at 82.0% as at 30 September 2018, among the lowest in the industry. HLB’s liquidity coverage ratio stood at 117% as at 30 September 2018, well above regulatory requirements.
  • Asset quality continued to be strong with the Gross Impaired Loans Ratio improving further to 0.81% as at 30 September 2018. Loan impairment coverage ratio remained sound at 130.6%.  Inclusive of regulatory reserves set aside as at 30 September 2018, HLB’s loan impairment coverage ratio would be higher at 204.5%.
  • Cost/Income ratio improved to 42.0% for 1QFY19, at the lower end of the industry range, as revenue growth continued to outpace expense growth.
  • Capital position remained robust, with Common Equity Tier 1, Tier 1 and Total Capital Ratios at 12.4%, 13.1% and 16.1% respectively as at 30 September 2018.

Insurance

  • HLA Holdings Sdn Bhd, HLFG's insurance division, recorded a pretax profit of RM82.1 million in 1QFY19, an increase of RM21.5 million y-o-y. We continue to make significant progress in growing our Non Participating and Investment Link new business premiums. 
  • HLA’s management expense ratio was 6.4% in 1QFY19, remaining among the lowest in the industry.
  • The focus remains on growing and improving the quality of HLA’s premium base, increasing profitability drivers as well as growth across multiple distribution channels.

Investment Banking

  • The Investment Banking division under Hong Leong Capital Berhad, recorded a pretax profit of RM22.7 million in 1QFY19, an increase of RM4.3 mil y-o-y.