Hong Leong Finance net profit surges in Q2

Hong Leong Finance posted a net profit of $29.6 million for its second quarter, up 41.7 per cent from a year ago, on the back of increases in interest income.

Annualised earnings per share was 26.53 cents, up from 18.78 cents previously. Interest on loans went up by 19.1 per cent to $65.3 million, while hiring charges went up 10.5 per cent to $13.2 million.

Other interest income soared 28.2 per cent to $8.9 million. But fees and commission income fell 23.9 per cent to $3.1 million.

Hong Leong Finance's interest income/hiring chargesincreased by 18.6 per cent to $87.3 million due to a higher average loan base and a higher loan yield.

Interest expenses increased by 7.5 per cent or $2.3 million due to higher interest payable on deposits resulting from a larger average deposits base.

Net loan assets including hire purchase receivables stood at $10.6 million at the end of the period under review, up 10.9 per cent.

Allowances for bad loans went up by 19.2 per cent to $808,000. Deposits and balances of customers closed at $11.2 million, up 9.7 per cent from a year ago.

Looking ahead, Hong Leong Finance said the group will continue to focus on risks and compliance, even as it grows its loans selectively.

"Close attention is also being (paid) to ensure that during this uncertain and volatile period our liquidity remains strong and well-managed," it said. "Supporting SMEs... will remain key."

A dividend of five cents was declared, up from four cents a year ago.

A version of this article appeared in the print edition of The Straits Times on August 11, 2018, with the headline 'Hong Leong Finance net profit surges in Q2'. Print Edition | Subscribe