Hong Leong Bank (HLBANK) Q2 2025 earnings summary

Executive summary

• Profit before tax rose 6.0% year-over-year to RM2,740 million, and profit after tax increased 5.7% to RM2,238 million, supported by topline growth and stable associate contributions.

• Total income for H1FY25 grew 13.0% year-over-year, driven by both net interest and non-interest income.

• Key growth engines included SME, wealth management, and global markets, with franchise sales and fee income showing robust expansion.

• The bank advanced its 3-5 Year Transformative Plan, focusing on technology, wealth, SME expansion, and global markets.

• Strategic investments in technology and people, including a partnership with WeBank Technology Services, supported operational efficiency and digital transformation.

Financial highlights

• Net interest income grew 8.3% year-over-year to RM2,472 million, with net interest margin at 1.91%, up 6bps year-over-year.

• Non-interest income surged 31.3% year-over-year to RM757 million, driven by wealth management and treasury activities.

• Operating expenses increased 10.5% year-over-year, but cost-to-income ratio improved to 38.8%.

• Loans and financing expanded 7.7% year-over-year to RM199.4 billion, with SME (+11.6%), transport vehicle (+11.2%), and residential properties (+5.9%) showing notable growth.

• Deposits rose 7.4% year-over-year to RM226.7 billion, with CASA balances up 7.9% to RM71.0 billion and a CASA ratio of 31.3%.

Outlook and guidance

• On track to achieve FY2025 KPIs, with gross loans growth of 7.7% (target: 6.0%-7.0%) and NIM at 1.91% (target: 1.85%-1.95%).

• Cost-to-income ratio improved to 38.8% (target: ~40.0%), and GIL ratio at 0.55% (target: <0.65%).

• Management remains positive on Malaysia’s economic outlook, projecting GDP growth of 4.5–5.0% for the year, supported by private consumption and investment inflows.

• Focus remains on digital innovation, ESG strategies, and executing the transformative plan.