Hong Leong Finance (S41) H1 2024 earnings summary

Executive summary

• H1 2024 net attributable profit rose 12.9% YoY to $52.6m, driven by higher net interest income and an expanded 1.6% net interest margin.

• Profit from operations before allowances increased 14.8% to $61.0m; profit before tax rose 13.0% to $63.1m.

Financial highlights

• Interest income and hiring charges rose 11.2% YoY to $303.8m; net interest income/hiring charges increased 11.1% to $112.7m.

• Fee and commission income fell 9.2% to $4.0m amid subdued large mortgage lending; other operating income was $0.1m.

• Total operating expenses increased 5.6% to $55.7m, mainly from annual salary increases and compliance, risk management and transformation resources.

• Net allowance reversals were $2.1m, versus $2.7m in H1 2023; the 2024 write-back included $1.6m for non-credit-impaired loans and $0.2m for credit-impaired loans.

• Annualized basic EPS was 23.45 cents, versus 20.78 cents; diluted EPS was 23.43 cents, versus 20.77 cents.

Outlook and guidance

• Focus remains on sustainable growth, operational efficiency and robust risk management amid evolving interest rates, economic conditions and market dynamics.

• GDP growth in Singapore was forecast by the central bank at the higher end of its 2%–3% range for 2024; SGD benchmark rates were expected to track the Fed's rate trajectory.