Hong Leong Financial Group’s FY23 Core net profit rose by +14%yoy, this was largely attributable to stronger NOII and BOCD contributions as well as tax normalisation offsetting weaker NII income and higher OPEX.
In terms of segments, Insurance and Associate contributions improved, while the commercial banking segment remained flattish. Investment banking, however, contracted.
However, 4QFY23 Core NP fell by -12%qoq, a huge fall in NOII offset improvements in NII, Associate contributions, and lower loan provisions. Elevated 4Q effects were also visible in OPEX, in terms of segments, all segments apart from Associates performed weaker – but this could be from Hong Leong Bank’s increased stake in BOCD.
HLBK has had a good year its core NP was up +24%yoy, reflecting improved NOII, provisioning and BOCD performance, as well as controlled OPEX growth and NII compression. There were also one-offs pertaining to BOCD convertible bond gains that affected FY23’s earnings positively and FY22’s negatively
Hong Leong Assurance’s full-year PBT of RM441m increased by +12%yoy, largely driven by higher revenue. Offsetting factors were lower life fund surplus, higher OPEX and lower Associate contributions. On the other hand, HLC’s full-year PBT of RM61m fell by -37%yoy, mainly due to lower contributions from investment banking & stockbroking as well as fund management & unit trust management divisions.
Looking ahead, MIDF revised its forecast on the group with FY24F/25F Core NP adjusted by -7%/-5%. The house added the revision is reflecting HLBK figures (mainly lowered due to elevated costs and lacklustre NIM outlook.
