by ANIS ZALANI
Hong Leong Financial institution Bhd (HLBB) ended the yr with a internet revenue of RM3.8 billion, up 16.1% from the yr earlier than because of constant non-interest earnings and steady enlargement in financing actions, regardless of decrease prime line numbers for the final three months.
For the fourth quarter ended June 30, 2023 (4Q23), HLBB’s internet revenue slipped 4.7% to RM864.68 million from RM907.64 million in the identical interval a yr earlier, primarily because of decrease internet earnings and better working bills.
Nevertheless, the numbers had been mitigated by decrease allowance for impairment losses on loans, advances and financing and better share of revenue from related corporations, it mentioned in an alternate submitting at this time (Aug 30).
The group’s income additionally noticed an uptick within the monetary yr ended June 30, 2023 (FY23), rising to RM5.69 billion from RM5.60 billion in the identical interval the earlier yr.
HLBB group MD/CEO Kevin Lam mentioned regardless of the difficult backdrop, HLBB’s outcomes had been pushed by strong progress in loans and financing, a wholesome asset portfolio and cheap returns, all amidst ongoing world market volatility and exterior challenges.
“Our gross mortgage and financing portfolio elevated by 8% year-on-year (y-o-y) to RM181.7 billion, pushed by progress in mortgages, auto loans, SMEs, industrial banking, and our abroad operations. We proceed to carefully monitor our asset high quality and place robust emphasis on our credit score underwriting course of as evidenced by a wholesome GIL ratio of 0.57% as at June 30, 2023 with a enough LIC of 168.8%,” he mentioned.
This, he mentioned, comes with a mortgage impairment protection ratio of 168.8% and when factoring within the worth of securities is inside their portfolio, this protection ratio will increase to 239%.
Lam mentioned the board additionally declared a last dividend of 38 cents per share, bringing the full dividend for the monetary yr to 59 cents. This represents a 2% enhance within the dividend payout ratio in comparison with the earlier yr.
The financial institution reported that its internet curiosity margin (NIM) remained steady y-o-y at RM4.55 billion and it was achieved regardless of dealing with elevated strain on funding prices. The financial institution managed to offset these challenges by the enlargement of its mortgage and financing portfolio and efficient asset and legal responsibility administration methods.
On account of these efforts, the financial institution achieved a NIM of 1.98% for FY23.
To enhance the NIM, he mentioned there was a necessity for them to analyse the sectors throughout the trade the place mortgage yields are increased than the norm.
“As a result of if we’re specializing in segments the place the mortgage budgets have continued to go down, that can proceed to offer us strain on the mortgage….We in all probability want to take a look at extra on the SME facet in comparison with the mortgage facet,” he mentioned at a press convention.
He mentioned regardless of the continued tensions between the US and China, there’s an assumption that these tensions will stay manageable and never escalate into irrational conflicts and this represents the first world macroeconomic threat, the place instability past management might impression investments and lending actions.
The financial institution’s shares rose eight sen or 0.4% to RM19.96 at this time, valuing the corporate at RM43.27 billion.