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Hong Leong Financial, Hong Leong Bank post rises in fiscal Q2 profit

Malaysia's Hong Leong Financial Group Bhd. posted a year-over-year increase in net profit for the fiscal second quarter ended Dec. 31, 2017, helped by a decline in allowance for impairment losses.

The group reported fiscal second-quarter net profit attributable to owners of 495.3 million ringgit, up from 443.0 million ringgit in the prior-year quarter. EPS rose to 43.3 sen from 38.7 sen.

Net interest income increased to 746.7 million ringgit from 703.4 million ringgit, while net income from Islamic banking business climbed to 156.8 million ringgit from 138.4 million ringgit. Noninterest income fell to 462.5 million ringgit from 512.6 ringgit.

Operating profit before allowances for the quarter inched down to 793.7 million ringgit from 793.9 million ringgit in the prior-year period. Allowance for impairment losses on loans, advances and financing and other losses fell to 10.4 million ringgit from 28.5 million ringgit.

For the fiscal first half, the group posted a year-over-year rise in net profit attributable to owners to 950.6 million ringgit from 829.2 million ringgit. EPS for the half climbed to 83.1 sen from 72.5 sen.

The group's gross impaired loan ratio came to 1.0% as of Dec. 31, 2017, remaining the same from June 30, 2017.

Hong Leong Bank Bhd., a unit of Hong Leong Financial, posted fiscal second-quarter group net profit attributable to owners of 683.1 million ringgit, up from 549.9 million ringgit in the prior-year quarter. EPS increased to 33.3 sen from 26.9 sen.

The bank's net interest income climbed to 748.7 million ringgit from 708.6 million ringgit, while net income from Islamic banking business increased to 156.8 million ringgit from 138.4 million ringgit.

Operating profit before allowances rose to 712.7 million ringgit from 678.0 million ringgit. Allowance for impairment losses on loans, advances and financing for the quarter declined to 10.5 million ringgit from 28.4 million ringgit.

For the fiscal first half, Hong Leong Bank reported a year-over-year rise in group net profit to 1.32 billion ringgit from 1.09 billion ringgit. EPS for the half increased to 64.5 sen from 53.4 sen.

Before deducting proposed dividends, Hong Leong Bank's group total capital ratio came to 16.042% as of Dec. 31, 2017, down from 16.280% at June 30, 2017. Its group common equity Tier 1 and Tier 1 ratios for the period were 13.351% and 14.056%, respectively, down from 13.788% and 14.193%, respectively, at June 30, 2017.

After deducting proposed dividends, Hong Leong Bank's group total capital ratio came to 15.785% as of Dec. 31, 2017, up from 15.779% at June 30, 2017. Its group common equity Tier 1 and Tier 1 ratios for the period were 13.094% and 13.798%, respectively, compared to 13.286% and 13.691%, respectively, at June 30, 2017.

Hong Leong Bank's board declared an interim dividend of 16 sen per share for the fiscal year ending June 30, up from its dividend of 15 sen per share in the fiscal year prior. The entitlement date is March 14 and the payment date is March 28.

As of Feb. 23, US$1 was equivalent to 3.92 Malaysian ringgit.