HONG Leong Bank Bhd (HLB) reported a dip in profit for the third quarter ended March 31, 2025 (3Q25), with net profit slipping 9.4% year-on-year to RM946.69 million from RM1.04 billion previously.
The group said the decline was mainly due to higher operating expenses of RM23.7 million, lower share of profit from its associated company (down RM60 million), and a dilution loss from the associate of RM407.6 million.
Despite this, the bank’s revenue grew 7.8% year-on-year to RM1.55 billion from RM1.44 billion, driven by strong loan growth both locally and abroad.
HLB also recorded higher net income of RM112.4 million, a stronger write-back of impairment losses on loans, advances and financing of RM372.1 million, and lower impairment losses on financial investments and other assets, which helped cushion the overall impact.
Segment-wise, personal financial services and business and corporate banking saw growth in pre-tax profit, driven by higher total income, though gains were partially offset by higher allowances for impairment losses and increased operating costs.
However, the international banking segment swung to a pre-tax loss of RM59.3 million, compared with a pre-tax profit of RM427.1 million in the previous year’s quarter, due largely to higher impairment losses on loans and lower share of profit from the group’s associate in China.
The global markets segment, meanwhile, narrowed its pre-tax loss to RM14.7 million, supported by higher total income and lower impairment losses on financial investments.
Hong Leong Bank has yet to announce any interim dividend for the quarter.
For the first nine months of FY2025 (9MFY2025), the bank reported a modest 0.7% increase in net profit to RM3.18 billion from RM3.16 billion a year ago. Revenue for the period rose 11.3% to RM4.77 billion.
Net interest income grew 5.8% to RM3.66 billion, supported by healthy loan growth and efficient funding cost management, while net interest margin improved by five basis points to 1.90%.
Non-interest income surged 34.1% to RM1.12 billion, bolstered by higher wealth management income and gains from treasury and foreign exchange activities.
The bank’s asset quality remained stable, with a gross impaired loan ratio of 0.57% and a loan impairment coverage ratio of 95%. Its cost-to-income ratio stood at 38.8%, unchanged from the previous quarter.
Group MD and CEO Kevin Lam said the bank is focused on executing its three- to five-year transformation plan aimed at strengthening its Asean footprint.
“We remain committed to developing innovative banking solutions that resonate with customers while supporting our sustainability ambitions,” Lam said, adding that the bank aims to integrate environmental, social and governance practices across its operations. — TMR
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