Hong Leong Bank Berhad (“the Bank” or “HLB”), announced its results for the quarter ended 30 September 2023 in Kuala Lumpur on 30 November 2023.

“We commenced the new financial year with a set of encouraging results for Q1FY24 led by sustained loan/financing growth, healthy asset quality, prudent funding and liquidity positions amidst the ongoing external headwinds and volatility in global markets. We remain vigilant and resolute in executing our strategic priorities and driving our continued business expansion. Our net profit after tax for Q1FY24 improved 4.9% y-o-y to RM1,030 million, mainly contributed by strong loan/financing expansion, sustained non-interest income and improved asset quality metrics, coupled with solid contributions from our associates. Consequently, we achieved a higher return on equity (“ROE”) of 12.1% for the first quarter. Our gross loans and financing portfolio grew 7.2% y-o-y to RM181.7 billion, led by growth across our mortgage, auto loans, SMEs and commercial banking segments as well as overseas operations. In line with our robust credit underwriting process, we continue to closely monitor our asset quality, ending the quarter with a stable GIL ratio of 0.57% and a solid LIC of 164.6%.”

Kevin Lam, Group Managing Director and Chief Executive Officer of HLB

Hong Leong Bank Berhad (HLB) closed out a positive first quarter in 2024, fueled by robust loan expansion, efficient cost management, and a steadfast commitment to supporting Malaysian businesses and communities. The Bank’s strong performance paints a picture of resilience and adaptability in the face of uncertain economic conditions.

At the heart of HLB’s success lies a thriving loan portfolio. Gross loans and financing surged 7.2% year-over-year to reach RM181.7 billion, driven by impressive growth across key segments like mortgages, auto loans, SME and commercial banking, and even overseas operations. Domestic loan growth in particular, outpaced the industry average, solidifying HLB’s position as a major player in the Malaysian financial landscape.

This loan growth translated into improved profitability, with net profit after tax climbing 4.9% to RM1.03 billion. Higher net interest income and disciplined cost control were the key ingredients in this recipe for success. Net interest margin continued its upward climb, reaching 1.84%, a testament to the Bank’s strategic asset and liability management.

But HLB’s strength goes beyond mere numbers. The Bank demonstrated a firm commitment to prudent management, keeping operating expenses steady at RM556 million and achieving a healthy cost-to-income ratio of 39.9%. This focus on efficiency ensures that resources are channeled effectively towards supporting growth and delivering value to stakeholders.

HLB’s dedication to maintaining a robust financial position is evident in its strong liquidity and funding positions. Loan-to-deposit ratio (LDR) remained comfortable at 85.4%, while liquidity coverage ratio (LCR) stood at a reassuring 137.5%, well above regulatory requirements. These metrics highlight the Bank’s ability to weather any potential storms and continue serving its customers with confidence.

Asset quality also remained a point of strength for HLB. Both the gross impaired loan (GIL) ratio and loan impairment charge (LIC) ratio stayed low, reflecting the Bank’s prudent lending practices and effective risk management. Additionally, healthy capital ratios provided a solid foundation for future growth opportunities.

Beyond financial metrics, HLB stands out for its unwavering support of Malaysian businesses, particularly SMEs. Recognizing their vital role in driving the nation’s economy, the Bank has established itself as a champion of this crucial sector. This dedication was recently acknowledged with HLB being named the Best SME Bank in Malaysia by both Asian Banking and Finance and The Asian Banker.

But HLB’s commitment extends beyond the boardroom. The Bank actively invests in the well-being of communities, empowering individuals and fostering entrepreneurship. Initiatives like HLB JumpStart Micro Business provide opportunities for low-income, single mothers to achieve financial independence and build a brighter future. Additionally, the Bank’s partnership with SURI, a social enterprise providing upskilling training and business opportunities, further underscores its commitment to social responsibility.

HLB’s “Digital At The Core” strategy puts technology at the forefront of its customer experience. By creating a seamless and hyper-personalized digital banking ecosystem, the Bank makes financial services accessible and convenient for everyone. This dedication to digitalization was recently recognized at the Malaysia e-Payments Excellence Awards, where HLB received accolades for both Best e-Payments Bank and Best e-Payment Acquirer Bank.

Sustainability is another cornerstone of HLB’s operations. The Bank actively integrates ESG principles into all aspects of its business, recognizing its responsibility to contribute to a greener and more equitable future. In this vein, HLB successfully concluded RM300 million in green housing loans and green asset financing transactions, a significant step towards supporting the growth of sustainable housing and transitioning to a low-carbon economy. This commitment to ESG was further validated by HLB receiving the Bank of The Year – ESG Leadership Award for the second consecutive year, a testament to its impactful sustainability and CSR initiatives.

As HLB navigates the ever-changing economic landscape, its focus on loan growth, prudent management, and community engagement positions it for continued success. The Bank’s unwavering commitment to serving its stakeholders, coupled with its dedication to sustainability and social responsibility, paints a promising picture for its future. By staying true to its core values and adapting to new challenges, HLB is well poised to weather any storm and emerge even stronger in the years to come.

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