Hong Leong Finance posts 5.4% drop in Q1 net profit to $14.4 million

Hong Leong Finance (HLF) recorded a 5.4 per cent drop in net profit for the first quarter to $14.4 million.

Net interest income slipped a marginal 0.5 per cent in the three months to March 31 compared with the same period last year, due to a slight reduction in lending spread.

Fee and commission income fell by 23.3 per cent to $2.6 million, mainly due to lower fee income from lending products.

Operating profit dipped 5 per cent in the first quarter from the previous year.

The shareholders' funds as at March 31 totalled $1.67 billion, which translates to $3.75 per share, compared with $3.72 per share as at Dec 31.

HLF said in a statement that the cooling measures have affected the property market, the motor vehicle market has been shrinking since last year and the United States, Europe and China have seen lower and uneven growth.

It noted: "Although the worst seems to be over, volatility and uncertainty continue to prevail in many markets. However, as a transition to higher interest rates becomes more likely, yields on assets should improve over time."