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Hong Leong Finance Q1 net profit up 1.5% to S$26.2m
HONG Leong Finance on Thursday posted a 1.5 per cent increase in net profit to S$26.2 million, while revenue, measured by its total interest income and hiring charges, rose 18.4 per cent to S$95.2 million for its first quarter ended March 31.
The financial services arm of Hong Leong Group said its interest income and hiring charges were driven by loan growth and a higher average loan yield.
But interest expense, including interest on lease liabilities, rose 42.3 per cent due to a larger deposits base and higher funding cost, which led to a smaller magnitude of increase in the company's bottom line. Earnings per share was 23.54 Singapore cents, compared to 23.22 cents a year ago.
Allowances for loans and other financial assets for the first quarter were net recoveries of S$349,000, arising from higher bad debts recovered and lower expected credit loss allowances for non-credit impaired loans.
"The group continues to maintain adequate loss allowances in respect of its loan portfolio and other financial assets," it said.
Net loan assets stood at S$10.4 billion as at end-March 2018. The group said that some loans were not disbursed in the quarter due to delays in the legal process. Deposits and balances of customers amounted to S$11.4 billion as at end-March, up a slight 0.5 per cent from a year ago.
Looking ahead, the group said that given slowing economic growth and contraction in manufacturing in Singapore, it will continue to "practise prudence" in its lending activities. "We will support the SMEs during these difficult times with innovative schemes to assist in their cash flows. We also have competitive packages to help HDB dwellers."
The counter closed one cent higher at S$2.80 on Thursday.