PETALING JAYA: Hong Leong Financial Group Bhd (HLFG) today reported that net profit attributable to shareholders for the first quarter of financial year 2025 (Q1’25) increased by 14.3% year-on-year (y-o-y) to RM848 million, driven by improved commercial banking and insurance performance.
In the commercial banking division, Hong Leong Bank Bhd’s (HLB) profit before tax (PBT) for Q1’25 increased by 7.7% y-o-y, underpinned by robust loans/financing growth, improved non-interest income and stable contributions from our associates.
Insurance division HLA Holdings Sdn Bhd’s PBT grew by 142.3% y-o-y from stronger investment income and higher net insurance service results.
In the investment banking and asset management division, Hong Leong Capital Bhd’s PBT was lower by 20.5% y-o-y due to delays in the completion of mandated deals, mark-to-market decline in valuation of hedging instruments and lower equity investment returns.
This translates to an improved return on average equity of 11.3%, compared to 10.8% a year ago.
Book value per share increased to RM26.28 as at Sept 30, 2024 from RM24.25 last year.
HLFG president and CEO Tan Kong Khoon said the group is encouraged by its strong Q1’25 financial performance led by its focused execution of strategic priorities in growing the topline, which increased by 20% y-o-y.
“This is evident by the group’s robust non-interest income growth of 46.7% y-o-y following fee-income expansion initiatives and investment gains, especially in the insurance segment. We also saw positive results from net interest margin recovery efforts and continued above-industry loan growth, resulting in sustained net interest income growth of 10.2% y-o-y. The group’s Q1 FY25 performance was also aided by healthy contributions from our associates and our steadfast discipline in asset quality, capital and liquidity management.”
He said the group anticipates Malaysia’s positive economic momentum will carry into 2025, but is mindful of downside risks and external headwinds stemming from evolving geopolitical and trade tensions between major economies.
Overall, he added, HLFG is well positioned to capture economic growth and deliver sustainable value creation for its stakeholders through enhancing its digital capabilities, expanding its suite of products and delivering customer-centric solutions.
“We will also continue to uphold our sound loan monitoring and management of credit risk, while exercising prudent cost control and investment in operational resiliency and digital capabilities across the group,” said Tan.
The group actively drives and aligns its environmental, social and governance (ESG) efforts under a group-wide approach in line with its operating companies’ endeavours to create a positive impact for stakeholders, communities and the environment.
HLFG’s commercial bank recently unveiled its inaugural Sustainable Finance Framework, which aims to mobilise RM20 billion over the next five years to support green projects, further solidifying HLB’s commitment to environmentally sustainable financing. The framework enables the financing of green projects related to renewable energy, energy efficiency, green building, affordable housing, clean transport and logistics, and waste management.
In the first quarter, Hong Leong Investment Bank advised and arranged two transactions amounting to RM900 million, including a sustainability-linked bond issue and a green medium-term notes issue.
On investments, HLFG said Hong Leong Assurance’s portfolio does not carry any investments which harm the environment following its half-yearly assessment conducted based on Bank Negara Malaysia Climate Change and Principle-based Taxonomy.
HLFG said it will continue to strengthen its sustainability efforts with added focus across its operating companies and further integrate ESG considerations into the way it conducts its business.
