Kuala Lumpur, 26 February 2025 - Hong Leong Financial Group Berhad (“HLFG” or the “Group”) today announced its results for the financial year period 31 December 2024 (“1H FY25”).


  • Net profit attributable to shareholders (“PATAMI”) for 1H FY25 increased by 7.2% year-on-year (“y-o-y”) to RM1.69 billion, driven by improved performance in commercial banking and insurance.

  • Commercial banking division, Hong Leong Bank Berhad’s (“HLB” or “the Bank”) profit before tax (“PBT”) increased by 6.0% y-o-y, underpinned by strong loans/financing growth and robust non-interest income contribution.

  • Insurance division, HLA Holdings Sdn Bhd’s (“HLAH”) PBT grew by 28.8% y-o-y from higher net insurance service results and stronger investment income.

  • Investment banking and asset management division, Hong Leong Capital Berhad’s (“HLCB”) PBT was lower by 12.1% y-o-y primarily attributable to delays in the completion of mandated deals, lower investment gains and asset management income.

  • 1H FY25 Return on average equity (“ROE”) remains commendable at 11.1%.

  • Book value per share increased to RM27.3 as of 31 December 2024, compared to RM25.1 from a year ago.

  • The Board has declared an interim dividend of 20 sen per share for 1H FY25.

Hong Leong Financial Group’s President & Chief Executive Officer, Tan Kong Khoon commented, “Our 1H FY25 results demonstrate another solid performance for the Group, driven by the successful execution of our top-line growth initiatives. A key highlight was the Group's robust non-interest income (“NoII'’) performance which increased by 30.4% y-o-y, and saw HLFG’s NoII ratio improving to 32.7%, placing us within the top quartile of the industry. Disciplined management of asset quality, capital, and liquidity also contributed to the Group's positive results. Accordingly, the Group proposed an all-cash interim dividend of 20 sen per share, amounting to a dividend payout of RM227.7 million.


Looking ahead, Malaysia's economy is expected to remain favourable and is expected to expand by 4.5% to 5.5% in 2025, driven by resilient private consumption as well as sustained domestic and in-bound investments. However, the Group is vigilant on the potential downside risks arising from evolving geopolitical tensions amid escalating protectionist policies, which could lead to trade disruptions, inflationary pressures and tighter financial conditions.


The Group is committed on strengthening our business franchise through strategic partnerships, in pursuit of long-term value creation. Our commercial bank's new collaboration with WeBank Technology Services, a subsidiary of WeBank, is a testament to this commitment, aimed at providing an enhanced customer experience and solidifying its position as a digital-first financial institution. Simultaneously, the Group is also focused on harnessing our integrated financial ecosystem by leveraging on our distribution strength across business divisions to provide cross-selling opportunities and continued NoII growth. These collective efforts have yielded encouraging results, evidenced by a 17.6% y-o-y growth in the Group's fee income.”

 


Commercial Banking – PBT of RM2,740 million (+6.0% y-o-y)

  • HLB recorded a PBT of RM2,740 million in 1H FY25, an increase of 6.0% y-o-y mainly driven by robust loans/financing growth, improved non-interest income and stable contributions from our associate.

  • Gross loans, advances and financing maintained its growth momentum, with an expansion of 7.7% y-o-y to RM199.4 billion, driven by expansion in our key segments of mortgage, auto loans, SME and commercial banking as well as key overseas markets. Domestic loans/financing increased 8.0% y-o-y, surpassing industry growth rate of 5.5%.

  • Net interest income 1H FY25 increased by 8.3% y-o-y to RM2,472 million, led by strong loans/financing growth and effective funding cost management. Correspondingly, net interest margin (“NIM”) improved 6bps y-o-y to 1.91%.

  • Non-interest income also surged by 31.3% y-o-y to RM757 million driven by higher wealth management income and favourable gains from treasury activities and foreign exchange.

  • CASA maintained solid growth of 7.9% y-o-y to RM71.0 billion resulting in CASA ratio sustained at 31.3%. CASA acquisition remains a key focus area as we continue to step up the targeted efforts in community deposit acquisition and enhance our customer-centric cash management solutions.

  • The Bank delivered positive JAWS with an improved CIR of 38.8%, as we continue to invest strategically in areas of technology and people.

  • Asset quality position of the Bank remained healthy with a GIL ratio of 0.55% whilst LIC ratio is well positioned at 139.0% as at 31 December 2024. Inclusive of the value of securities held on our GIL, the Bank’s LIC ratio is at 209.0%.

  • Capital position of the Bank remained solid with CET 1, Tier 1 and Total Capital ratios at 13.0%, 14.0% and 15.9% respectively as at 31 December 2024.

 


Insurance – PBT of RM394 million (+28.8% y-o-y)

  • HLAH’s PBT rose by 28.8% y-o-y to RM394 million, contributed by higher net insurance service results and stronger investment income, partially offsetting the lower share of profits from its associate, MSIG Insurance (Malaysia) Bhd.

  • The stronger investment income in 1H FY25 was driven by equity fair value gains, which increased by RM37 mil, following heightened activities on the local bourse in Malaysia and Hong Kong in line with improved performance of the Hang Seng Index and FTSE Bursa Malaysia KLCI.

  • Hong Leong Assurance (“HLA”) recorded 5.3% y-o-y increase in net insurance service results to RM112.9 million driven by higher expected insurance claims outpacing actual claims, as a result of revision of the medical claims assumptions. This is on top of higher contract service margins ("CSM") release during the period.

  • In terms of gross premiums, our life insurance and family takaful’s gross premiums / contribution grew by 5.1% y-o-y led by HLA new business regular premium (“NBRP”) growth of 26.7% y-o-y and higher family takaful new business contributions of 37.7% y-o-y. While our overseas general insurance companies, namely HL Assurance Pte Ltd in Singapore and Hong Leong Insurance (Asia) Limited in Hong Kong, saw gross premiums increase by 6.5% y-o-y and 11.9% y-o-y respectively.

 


Investment Banking – PBT of RM41 million (-12.1% y-o-y)

  • HLCB recorded 1H FY25 PBT of RM41 million, a 12.1% decline y-o-y, was primarily attributable to lower income from investment banking and asset management division, as well as lower returns on equity investments.

  • Stockbroking PBT improved by 17.7% y-o-y which was supported by Bursa Malaysia’s higher average daily trading value, which increased by 35% y-o-y to RM3.3 billion. Overall market share dipped slightly to 3.67%, driven by the increase of foreign institution flows, of which HLIB has limited participation. Excluding foreign participation, our market share increased by 0.35% to 5.97%.

  • Our investment banking division registered a PBT of RM3.9 million, a decline of 45.1% y-o-y, which was attributable to lower profit contribution from our Debt Markets and Treasury & Markets (“T&M”). Our Debt Markets’ performance was impacted by the delay in the completion of mandated deals which was cushioned by improved deal flows in our Equity Markets, including the completion of two initial public offering mandates. T&M’s performance was affected by mark-to-market movements arising from widened spreads between bonds and interest rate swap.

  • Our asset management business’ average Assets Under Management (“AUM”) was marginally lower by 3.0% y-o-y to RM11.3 billion from redemptions in its fixed income and money market funds. Asset management PBT declined 29.1% y-o-y to RM3.8 million from lower AUM and ongoing investments in expanding and strengthening its distribution channels.

 


Sustainability Journey

The Group continues to make strides in our Environmental, Social, and Governance (“ESG”) journey under a Group-Wide approach.


Our commercial bank received its fourth consecutive "Sustainable Energy Financing by a Domestic & Islamic Bank" award at the prestigious National Energy Awards 2024 in January 2025. This accolade recognises the Bank's exceptional dedication to providing well-structured financing packages for over 4,000 energy-related projects.


On the investment banking and asset management front, HLCB has become a signatory to the Partnership for Carbon Accounting Financials (“PCAF”) signifying alignment to international best practices in the financial sector and its role in supporting Malaysia’s net-zero ambitions.


HLFG remains committed to integrating ESG considerations and strengthening its sustainability efforts across all operating companies to deliver long-term value for all stakeholders.


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