HLFG profit plunges 38% in 3Q

Business & Markets 2013
Written by Madiha Fuad of theedgemalaysia.com
Friday, 10 May 2013 10:20
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KUALA LUMPUR: HONG LEONG FINANCIAL GROUP BHD [] (HLFG)
saw a 37.6% plunge in its net profit for the third quarter ended March
31 (3Q) on weaker performance by its banking unit HONG LEONG
BANK BHD [].
HLFG’s net profit for 3Q was significantly reduced to RM320 million
from RM513.27 million a year ago largely due to higher allowance for
impaired loans of RM118.8 million by Hong Leong Bank.
The banking unit reported a 22.9% drop in net profit to RM454.2 million
for 3Q from RM589.3 million previously on the back of flat revenue of
RM1.2 billion.
However, HLFG’s net profit for the first nine months rose to RM1.09
billion from RM977.96 million previously, on higher revenue of RM3.32
billion against RM1.32 billion a year ago.
This was mainly due to Hong Leong Bank’s higher net profit of RM1.4
billion for the nine-month period, up 7.6% from RM1.3 billion previously.
“The increase was due to lower other operating expenses of RM122.3
million, higher net income of RM109.9 million and higher share of profit
from Bank of Chengdu and joint ventures totalling RM33.8 million,” said
HLFG in a filing with Bursa Malaysia yesterday.
Another member of HLFG, Hong Leong Capital Group, recorded a
pre-tax profit of RM44 million, against RM35.3 million previously. This was mainly due to higher contribution from its
investment banking division.
Another unit, HLA Holdings Group, registered a pre-tax profit of RM128.1million, compared with RM132.7million in FY12.
The decrease was mainly due to lower non-interest income of RM22.3million and a lower net interest income of RM6.4
million.
But this was offset by lower overhead expenses of RM18.4 million and a higher share of profit of RM5.9 million from
associated companies.