Hong Leong Finance FY15 profit up 16%

FINANCE company Hong Leong Finance on Thursday said full-year net profit rose 16 per cent from a year ago on stronger income, and said it has settled a legal action taken in the US that led to a writeback in allowances.

Net profit for the 12 months ended Dec 31, 2015 stood at S$72.9 million, compared to S$62.8 million a year ago. It declared a final dividend of seven Singapore cents per share, up from 4 Singapore cents per share a year ago.

Net interest income rose 8.8 per cent from a year ago to S$162 million, reflecting higher loan yield. Fee and commission income gained 1.6 per cent to S$12.5 million.

It also wrote back S$3.64 million in provisions. A year ago, the finance company had made S$2.02 million in provisions for impairment loss.

The company said it had, in December 2015, reached through mediation a confidential settlement over legal action it had commenced earlier in the US. "Accordingly, the legal action has since been withdrawn," it said, adding that the settlement and the provision for legal matters that is no longer required has been included in its allowance. No other details were provided.

"Our domestic economy continues to be restructured and its productivity still remains low. The SMEs especially are challenged by high rental and operating costs, labour shortages and difficult business conditions."