Hong Leong Bank (HLBANK) Q4 2024 earnings summary

Executive summary

• Achieved record pre-tax profit of RM5,134 million for FY2024, up 11.0% year-over-year, and net profit after tax of RM4,196 million, up 9.9% year-over-year, driven by higher net income, net write-back of impairment losses, and increased profit from associates.

• Delivered return on equity of 11.8% and improved earnings per share to 205 sen.

• Maintained strong asset quality with a gross impaired loans ratio of 0.53% and robust impairment coverage.

• Launched new digital and sustainability initiatives, including a Sustainable Finance Framework, enhanced digital banking capabilities, and ESG programs.

• All major business segments, except Global Markets, recorded higher pre-tax profits year-over-year.

Financial highlights

• Net interest income for FY2024 rose 2.6% year-over-year to RM4,669 million; non-interest income was RM1,102 million.

• Total income increased 1.5% to RM5,771 million; operating expenses grew 4.7% to RM2,339 million, resulting in a cost-to-income ratio of 40.5%.

• Operating profit after allowances reached RM3,545 million; profit before tax up 11.0% year-over-year to RM5,134 million.

• Share of profits from associates surged 23.2% to RM1,589 million.

• Dividend payout ratio increased to 34%, with total dividend of 68 sen, up 15.3%.

Outlook and guidance

• FY2025 targets: gross loans growth of 6.0%-7.0%, net interest margin of 1.85%-1.95%, cost-to-income ratio around 41.0%, GIL ratio below 0.65%, and ROE around 12.0%.

• Malaysian economy expected to grow 4-5% in 2024 and 2025, supported by resilient domestic demand and improved external demand.

• Focus remains on executing strategic priorities, driving core business growth, and advancing ESG initiatives.