Hong Leong Finance H1 net profit rises 22.4% to S$44.7m

HONG LEONG Finance on Thursday said it made a net profit of S$44.7 million in the first-half, up 22.4 per cent from the same period a year earlier, thanks to a stepped-up effort in managing the cost of funds and lower loan loss allowances.

Interest income and hiring charges in the six months ended June 30 came to S$123.1 million, down 30.9 per cent.

Interest expense fell 64.7 per cent to S$33.9 million. Net interest income rose 8.6 per cent to S$89.2 million, driven by a calibrated funding strategy which helped the group "pare down the deposit base and tighten funding cost", it said.

This helped it to "manage the downward pressure on net interest margin amid sustained low benchmark interest rates", the group noted.

An interim dividend of 3.75 Singapore cents will be paid on Sept 8.

Earnings per share was 19.97 Singapore cents, up from 16.32 cents in the first half of last year.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

Net loan assets stood at S$10.6 billion as at June 30; net asset value per share was S$4.33 as at June 30.

In tandem with the slower loan growth and to optimise loan funding, Hong Leong Finance said customer deposits and balances were managed down to S$10.8 billion as at June 30, down 7.9 per cent or $928 million from the year before.

Cash and cash equivalents including statutory deposit with the Monetary Authority of Singapore (MAS), together with Singapore government debt securities, MAS Bills and MAS floating rate notes (FRN) held as liquid assets amounted to S$2.3 billion as at June 30.

The group's balance sheet remained "resilient with ample liquidity and strong capital to sustain lending activities and weather the pandemic", it said.

The counter rose two Singapore cents or 0.81 per cent to S$2.48 on Thursday, before the results were announced.