KUALA LUMPUR (Aug 30): Hong Leong Financial Group Bhd's net profit grew 18% to RM674.68 million for the fourth quarter ended June 30, 2022 (4QFY22) from RM573.37 million a year ago, driven by its commercial banking division Hong Leong Bank Bhd, whose earnings were lifted by lower provisions and higher net income.

The group said its insurance division HLA Holdings Sdn Bhd and the investment banking division Hong Leong Capital Bhd recorded lower contributions in 4QFY22.

Earnings per share rose to 59.5 sen in 4QFY22 from 50.6 sen last year. The group declared a final dividend of 31 sen per share, bringing the total dividend for FY22 to 46 sen per share. This compares to the final dividend of 29.2 sen per share in 4QFY21, which brought FY21 dividend to 40 sen per share.

Net interest income inched up by 1.2% to RM949.68 million in 4QFY22, from RM938.09 million a year ago, the group’s Bursa Malaysia filing showed.

For the full FY22, Hong Leong Financial Group’s net profit rose 8.3% to RM2.45 billion, from RM2.26 billion in FY21, while net interest income climbed 8.4% to RM3.86 billion from RM3.56 billion.

Looking forward, although Malaysia’s economy is expected to remain resilient, external headwinds from a slowing global economy, sharp interest rate hikes in advanced economies, the prolonged Russia-Ukraine war and strains in China’s economy are likely to weigh on the outlook of the global economy in the second half of 2022, said the group’s president and chief executive officer Tan Kong Khoon.

“The normalisation of interest rates by Bank Negara Malaysia may be mildly positive to our commercial banking business but the risk of softening of economic activities with consumer sentiment turning cautious may curtail private sector consumption and further dampen the outlook in investment climate,” he said.

“While many factors remain at play, the downside risks and uncertainties coupled with rising domestic inflation trend would likely put some pressure on our operating cost, that calls for more stringent cost discipline and vigilance to adapt to a volatile business environment in the new financial year,” Tan added.

Hong Leong Financial Group were 22 sen or 1.13% lower at RM19.30 per share at market break, valuing it at RM22.15 billion.

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