Hong Leong Bank Records RM4.53 Billion Profit After Tax for Financial Year 2026

KUALA LUMPUR: Hong Leong Bank Bhd (HLB) recorded a profit after tax of RM4.53 billion for the financial year ended June 30, 2026, an increase of six percent compared to the previous year.

Operating profit before allowances for the same period rose 6.6 percent to RM4.18 billion, while profit before tax grew 2.2 percent to RM5.48 billion.

Total income for the financial year 2026 recorded an increase of 4.6 percent to RM6.69 billion with a net interest margin (NIM) of 1.84 percent.

HLB Group Managing Director and Chief Executive Officer, Kevin Lam, said the financial year 2026 performance was driven by sustained income growth, strategic cost management and strong asset quality.

“HLB closed the financial year 2026 with resilient financial performance, achieving a profit after tax of RM4.53 billion,” he said in a statement on Thursday.

The profit growth was also supported by the expansion of gross loans and financing by 7.7 percent to RM226.3 billion, driven by mortgage, vehicle financing, small and medium enterprises (SMEs), commercial banking and overseas market segments.

Domestic loans and financing grew 7.1 percent, surpassing industry growth of 5.5 percent.

The residential mortgage portfolio increased 6.6 percent to RM107.1 billion, while vehicle financing rose 5.5 percent to RM25.5 billion.

In the business segment, loans to domestic enterprises increased 7.8 percent to RM76.7 billion, while the SME financing portfolio grew 9.9 percent to RM44.6 billion.

Community SME banking initiatives also increased 12.9 percent to RM17.1 billion.

At the same time, HLB maintained strong asset quality with a gross impaired loan ratio of only 0.57 percent as of June 30.

The loan impairment coverage ratio stood at 79.5 percent, or 149.5 percent after taking into account the value of securities held against gross impaired loans.

Elaborating further, Kevin informed that HLB’s focus remains on providing customer-oriented banking solutions and ensuring continued access to financing for households and SMEs.

“We remain committed to providing tailored support initiatives to help customers navigate the current environment,” he added.

In terms of funding, customer deposits increased 5.5 percent to RM252.1 billion, while current and savings accounts (CASA) grew at a faster pace of 11.3 percent to RM87.4 billion, thereby raising the CASA ratio to 34.7 percent.

Non-interest income also increased 9.3 percent, driven by the expansion of wealth management business and global market franchise sales, thereby raising the non-interest income ratio to 24 percent.

HLB also maintained a cost-to-income ratio of 37.6 percent through the integration of artificial intelligence and strategic cost management.

However, the moderate profit before tax growth reflects lower profit contributions from its associate, Bank of Chengdu Co Ltd, following the natural dilution of HLB’s stake due to convertible bond conversions, as well as foreign exchange translation effects from a stronger ringgit.

In line with the performance, HLB’s board declared a final dividend of 80 sen per share.

This brings the total dividend for the financial year 2026 to RM1.10 per share, an increase of 14 sen compared to the previous year.

The dividend payout ratio also increased to 50.4 percent, while the bank will continue to pursue growth opportunities based on prudent risk management and balance sheet discipline.

Sinar Harian