Hong Leong Finance's Q2 net profit up 41.7%

HONG Leong Finance posted a net profit of S$29.6 million for its second quarter, up 41.7 per cent from a year ago, on the back of increases in interest income.

Annualised earnings per share was 26.53 Singapore cents, up from 18.78 Singapore cents previously.

Interest on loans went up by 19.1 per cent to S$65.3 million, while hiring charges went up 10.5 per cent to S$13.2 million.

Other interest income soared 28.2 per cent to S$8.9 million.

Fees and commission income fell 23.9 per cent to S$3.1 million.

Hong Leong Finance's interest income/hiring charges for the quarter went up 18.6 per cent to S$87.3 million due to a higher average loan base and a higher loan yield.

Interest expenses increased by 7.5 per cent or S$2.3 million due to higher interest payable on deposits resulting from a larger average deposits base.

Accordingly, net interest income/hiring charges for the quarter went up by 26.7 per cent to S$54 million.

Net loan assets including hire purchase receivables stood at S$10.6 million at the end of the period under review, up 10.9 per cent previously.

Allowances for bad loans went up by 19.2 per cent to S$808,000.

Deposits and balances of customers closed at S$11.2 million, up 9.7 per cent from a year ago.

Looking ahead, Hong Leong Finance said that the group will continue to focus on risks and compliance, even as it grows its loans selectively.

"Close attention is also being made to ensure that during these uncertain and volatile period our liquidity remains strong and well-managed," it said.

"Supporting SMEs during this period will remain key."

A dividend of 5 Singapore cents was declared, up from 4 Singapore cents a year ago.