Hong Leong Bank (HLBANK) Q1 2026 earnings summary

Executive summary

• Achieved 7.8% year-over-year growth in pre-BOCD/operating profit before associate contribution, surpassing RM1 billion for the quarter, driven by topline expansion, operational efficiency, and strong growth in loans/financing and non-interest income.

• Pre-tax profit for the quarter ended 30 September 2025 rose 0.9% year-over-year to RM1,351.1 million, with net profit at RM1,090.98 million and basic earnings per share at 53.2 sen.

• Total income rose 5.4% year-over-year to RM1,685 million, with non-interest income up 16.3% and net interest income up 2.4%.

• Loans/financing and CASA both grew 9.1% year-over-year, reflecting strong momentum across key business lines.

• Maintained healthy liquidity and capital positions, supporting future growth.

Financial highlights

• Profit after tax was RM1,091 million, up 0.1% year-over-year.

• Operating profit before allowances increased 10.9% year-over-year to RM1,078 million.

• Operating expenses declined 3.0% year-over-year to RM606.87 million, improving cost-to-income ratio to 36.0%.

• Non-interest income ratio reached 24.4%, supported by strong wealth management and global markets performance.

• Allowance for impairment losses on loans increased to RM37.53 million from RM7.45 million year-over-year.

Outlook and guidance

• FY2026 targets: gross loans growth 6.0%-7.0%, net interest margin 1.80%-1.90%, cost-to-income ratio ~39.0%, GIL ratio <0.65%, net credit cost <10bps, CASA mix >32.0%, ROE 11.5%-12.0%.

• Management remains cautiously optimistic about Malaysia’s economic resilience, expecting GDP growth of 4.0% to 4.8% for the year, and continues to focus on digital transformation, ESG integration, and customer-centric solutions.

• Q1FY26 performance exceeded or met most targets except ROE, which was slightly below guidance.