Finance firm Hong Leong Finance has posted a net profit of $20.9 million for the second quarter, up 89.1 per cent from the same period a year earlier.
Net interest income and hiring charges in the three months to June 30 came in at $42.6 million, up 25.3 per cent from the same period last year.
A combination of lower deposits base and lower applicable interest rates resulted in interest expense falling 30.2 per cent from a year ago to $31 million in the second quarter, which made up for the 6.1 per cent drop in total interest income and hiring charges to $73.7 million.
Fee and commission income rose 30.8 per cent to $4 million from both lending and non-lending products.
Staff costs dropped by 6.4 per cent to $14.8 million owing to lower provision for bonus.
Earnings per share was 18.78 cents, up from 9.95 cents in the second quarter last year, while net asset value per share was $3.85 as at June 30, from $3.82 as at Dec 31 last year.
An interim dividend of four cents per share will be paid on Sept 12, up on the three-cent interim dividend paid last year.
Net loan assets, including hire purchase receivables (net of allowances), stood at $9.56 billion as at June 30, up 0.4 per cent from $9.52 billion as at Dec 31 last year, but a fall of 4.8 per cent from $10 billion as at June 30 last year.
AT A GLANCE
Q2 NET INTEREST INCOME AND HIRING CHARGES: S$42.6 million (+25.3 per cent)
Q2 NET PROFIT: S$20.9 million (+89.1%)
The group said that "uncertainties and volatility which prevailed in 2016 continued into the first half of 2017", and against this backdrop the Singapore economy is expected to "grow slowly".
The pace of change in the financial industry has quickened, it added.
"Profit margins are squeezed in nearly all industries including ours, and fintechs can help through innovation to improve processes and reduce operating costs," the group said, adding that it is seeking ways to collaborate with financial technology companies to improve and simplify processes while meeting demands for a technologically-driven customer experience.