Hong Leong Finance (S41) H2 2025 earnings summary

Executive summary

• FY2025 net profit fell 39.7% YoY to S$62.7m as declining benchmark rates compressed net interest margin; loan growth, higher fee income and a net allowance reversal provided partial support.

• Focus remained on balance-sheet discipline, digital transformation, SME and consumer growth initiatives, risk management and sustainability.

Financial highlights

• Income before operating expenses declined 21.4% to S$183.4m; net interest income fell 25.1% to S$168.5m, while fee and commission income rose 81.3% to S$14.7m.

• Operating expenses increased 3.1% to S$112.2m, reflecting digital infrastructure investment and business transformation costs; profit before tax was S$75.5m, down 39.5%.

• Profit after tax was S$62.7m versus S$104.1m; basic EPS was 14.0 cents versus 23.2 cents.

• Net loans rose 3.7% to S$12.098bn; customer deposits were nearly unchanged at S$12.299bn, and total assets increased 0.9% to S$14.763bn.

Outlook and guidance

• Global outlook remains tempered by geopolitical uncertainty and trade frictions; faster digitalisation also heightens cybersecurity and operational risks.

• Confidence rests on disciplined risk management and continued investment in digital innovation, security and workforce capabilities to manage uncertainty and pursue sustainable growth.

• FY2026 initiatives include a digital SME loan origination platform, real-time fraud monitoring, FAST payments and an SME green-finance category for circular-economy products and processes.