Hong Leong Financial Group Berhad today announced its first half results for the six months ended 31 December 2021 (1HFY22).
The Group recorded a net profit attributable to shareholders (PATAMI) of RM1.2 billion, an increase of 7.7% year-on-year (“y-o-y”) for the period due to higher contribution from the commercial banking division, Hong Leong Bank Berhad vis-a-vis insurance arm and investment banking arm.
The commercial division of HLFG, Hong Leong Bank recorded a net profit after tax of RM1,597 million for the period, an increase of 14.1% y-o-y, supported by topline growth.
Loans grew by 6.7% y-o-y to RM160.1 billion. The Bank’s domestic loans growth continues to outperform the industry growing by 5.7% y-o-y. Residential mortgages grew modestly by 5.5% y-o-y while domestic loans to business enterprises expanded by 13.3% y-o-y. The Bank’s community banking initiative focusing on customers within the SME segment registered a 17.9% y-o-y loan growth.
Asset quality position remained stable with a Gross Impaired Loans ratio of 0.46% as at 31 December 2021. Loan Impairment Coverage ratio as at 31 December 2021 was at 250.6% and inclusive of the value of securities the Bank holds on our GIL, the Bank’s LIC ratio stood at 320.6%.
The insurance arm of HLFG recorded a profit after tax of RM180 million, lower by 13.1% y-o-y. This was mainly attributed to the one-off prior year tax credit item and reduced investment income from lower mark to market valuation on bonds and equities.
Hong Leong Assurance Berhad’s gross premiums increased by 3.0% y-o-y to RM1.6 billion while new business regular premiums declined 17.8% y-o-y to RM329 million as it was impacted by COVID-19 related restrictions and cautious operating environment.
On other hand, Hong Leong MSIG Takaful Berhad showed a robust business growth trajectory with a 33.1% y-o-y increase in its gross contribution.
The investment banking arm recorded a profit after tax of RM44 million, a decrease of 51.7% y-o-y in comparison to last year due to lower income contribution from both investment banking and stockbroking divisions affected by lower traded volume on Bursa Malaysia.
The Board has declared an interim dividend of 15.0 sen per share in H1FY22.
Book value per share increased from RM20.13 as at 30 June 2021 to RM20.71 as at 31 December 2021.
“The Group continues to deliver positive performance across its operating businesses in H1FY22 while navigating a challenging business environment and emergence of the highly infectious Omicron variant that raised the level of uncertainty and its impact on Malaysia recovery momentum. With our increasing vaccination and booster rates, we anticipate the Malaysian economy will remain stable supported by expansion in global demand, higher private sector expenditure amid improvements in the labour market, and continued accommodative policy support. The Group shall remain vigilant and continue our strong focus on risk management with a view that Malaysia will be able to maintain a balanced approach to public health management whilst supporting economic growth in 2022,” said Tan Kong Khoon, HLFG President & Chief Executive Officer.
