HONG Leong Finance reported on Friday (Feb 23) a 45.4 per cent decline in net profit for the second half of 2023, on the back of lower net interest income.

Net profit for the six months ended Dec 31, 2023 fell to S$46.8 million from S$85.8 million in the same period the year before. The directors have proposed a final dividend of S$0.09 per share, down from the final dividend of S$0.1325 per share in FY22.

While Hong Leong Finance : S41 0% reported a 40.7 per cent year-on-year increase in interest income and hiring charges in the second half of the year, net interest income and hiring charges were 30.9 lower amid higher interest expenses. Interest expenses tripled to S$195.1 million from S$64.4 million in H2 FY22.

Fee and commission income fell in the second half, declining to S$5.5 million from S$8.3 million in H2 FY22.

For the full year, the group’s net profit fell 28.7 per cent to S$93.4 million, with higher interest expenses also weighing on the bottom line.

Full-year interest income and hiring charges rose 68.8 per cent to S$569.1 million, but interest expenses also rose 286.4 per cent to S$366.9 million, resulting in net interest income and hiring charges falling 16.5 per cent to S$202.2 million.

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Chairman Kwek Leng Beng said in a statement that the group is cautiously optimistic about the economic landscape of Singapore in the coming year.

“We remain resolute in seizing strategic opportunities and exercising financial prudence, while supported by strong governance practices. We understand that navigating the financial landscape requires a delicate balance between business performance and sustainable value creation,” he said.

Net asset value per share rose to S$4.59 as at December 2023, from S$4.55 the year before.

Shares of Hong Leong Finance closed unchanged at S$2.56 on Friday, before the earnings announcement.