HONG Leong Finance posted a 12.9 per cent rise in net profit to S$52.6 million for the half year ended Jun 30, from S$46.6 million in the same period a year ago.
This was driven by higher net interest income, as net interest margin expanded to 1.6 per cent, from 1.48 per cent in the year-ago period.
Earnings per share for the period stood at S$0.2345, up from S$0.2078 previously.
Hong Leong’s directors have proposed an interim dividend of 3.75 Singapore cents per share, up from 3.5 Singapore cents per share the year before.
Net interest income rose 11.1 per cent to S$112.7 million in H1 on the back of improved asset yields, which outpaced elevated funding costs on a year-on-year basis, Hong Leong said in a bourse filing on Thursday (Aug 8).
Fee and commission income fell by 9.2 per cent to S$4 million on subdued large mortgage lending activities in financial markets.
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Total operating expenses for the period rose 5.6 per cent to S$55.7 million, due mainly to higher staff cost from wage increments and increased spending to “enhance regulatory compliance and risk management”.
This was however partially offset by a broad-based decline in operating expenses with tightened cost control, Hong Leong pointed out.
The non-performing loan ratio was stable at 0.7 per cent.
Hong Leong had net loan assets of S$11.5 billion as at Jun 30, down 1 per cent from Dec 31, 2023, and 1.1 per cent lower year on year.
Commenting on trends and competitive conditions in the industry, Hong Leong pointed to the “successful” roll-out of its digital app as a “milestone in our digital transformation journey”. It added: “We will be implementing various strategic digital initiatives and payment solutions to meet the needs of our customers and enhance the mitigation measures on cybersecurity and technology risks.”
The counter closed S$0.03 or 1.3 per cent higher at S$2.42 on Thursday, prior to the earnings announcement.
