Hong Leong Bank 4Q net profit dips 2.09% to RM296.6m

KUALA LUMPUR: HONG LEONG BANK BHD []'s net profit for fourth quarter ended June 30, 2011 slipped 2.09% to RM296.60 million from RM302.94 million a year, due mainly to higher operating expenses and allowance for impaired loans.

Revenue for the quarter jumped 57.7% to RM820.79 million from RM520.25 million in 2010. Earnings per share was 20.42 sen compared to 20.90 sen in 2010, while net assets per share was RM5.13.

HLBank proposed a final gross dividend of 15 sen per share.

For the financial year ended June 30, HLBank’s net profit rose 12.5% to RM1.13 billion from RM1.01 billion in 2010, on the back of a 21.9% increase in revenue to RM2.54 billion from RM2.08 billion.

Reviewing its performance, HLBank said the increase in its profit was due to higher net income by RM457.5 million and higher share of profit from Bank of Chengdu of RM67.4 million.

However, it said this was mitigated by higher allowance for impaired loans of RM32.2 million, higher other operating expenses of RM289.2 million and lower write back of impairment losses by RM4.8 million.

On its prospects, HLBank said it was cautiously optimistic on the economic outlook for the remainder of the year.

Arising from the merger with EON, we continue to be on track for the full integration.

The integration brings opportunities for the combined group top reassert our market positioning, expand our business reach, serve our customers and community, achieve greater economies of scale and efficiency, and increase our talent capacity for our domestic and regional aspirations.

“We will leverage our collective strengths for value creation, growth and profitability,” it said.