Hong Leong Finance Q3 profit surges 55.6%

HONG Leong Finance posted a net profit of S$36.7 million for its third quarter, up 55.6 per cent from S$23.6 million a year ago, on the back of higher net interest income.

Earnings per share rose to 32.9 Singapore cents, up from 21.19 Singapore cents previously.

Net interest income/hiring charges rose 15.4 per cent to S$54.7 million for the quarter ended Sept 30 as compared to S$47.4 million a year ago, as a higher average loan yield from floating rate loans outpaced a rise in funding costs amid the rising interest rate environment.

The group noted write-back provisions/recoveries amounting to S$7.4 million for the quarter. Deposits and balances of customers closed at S$11,298 million, up 6 per cent from S$10,659 million a year ago, in line with higher funding requirements.

The nine months ended Sept 30 also showed net profit rising 51.2 per cent to S$92.1 million, from S$60.9 million in the previous corresponding period. The group said it continues to maintain adequate loss allowances in respect of its loan portfolio.

Net interest income for that the nine months also increased to S$158.4 million, 25.4 per cent higher from S$126.3 million a year ago.

Looking ahead, Hong Leong Finance said the group will continue to adopt a cautious stance to write loans selectively and focus more on risks, in view of moderating growth in Singapore's economy, rising interest rates and geopolitical risks.

"We will also support our SMEs in these difficult times through various SME schemes," it said. "We have also embarked on a digital transformation journey with several projects on hand."

An interim dividend of five cents declared in the previous quarter was paid on Sept 12. No further interim dividend has been declared.