Hong Leong Finance posts 10% rise in H2 profit to S$51.5 million, as net interest margin expands

HONG Leong Finance posted a 10 per cent rise in net profit to S$51.5 million for the six months ended December 2024.

This was driven by an expanded net interest margin, at 1.6 per cent, on the growth of asset yields and a “moderated” funding cost, the company said in its earnings statement on Friday (Feb 21).

Net interest income and hiring charges for the half-year rose 11.5 per cent to S$112.4 million, with savings in interest expenses offsetting the lower interest income recorded.

The non-performing loan ratio has hit a new low of 0.4 per cent, thanks to “prudent lending practices”, it added.

Hong Leong Finance has proposed a final dividend of S$0.10 per share, to be paid on May 22. This is up slightly from last year’s final dividend of S$0.09 cents per share.

“The company has delivered a strong financial performance in 2024” despite economic challenges, said Hong Leong Finance chairman Kwek Leng Beng.

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That said, the company’s H2 fee and commission income declined by 26 per cent, to S$4.1 million, as property financing activities “remained subdued”, it noted.

Meanwhile, total operating expenses in the half-year rose 1.8 per cent, to S$53.1 million. This was due to the higher depreciation charge on the capital investment for HLF Digital, the company’s digital financial services platform launched in August 2024.

For FY2024, Hong Leong Finance’s profit rose 11.5 per cent to S$104.1 million, on the back of an 11.3 per cent rise in net interest income and hiring charges to S$225.1 million. The company attributed the growth to “effective management of loan and deposit repricing cost”.

Hong Leong Finance’s net loan assets stood at S$11.7 billion as at Dec 31, 2024, up by 0.1 per cent from the year-ago period.

Looking ahead, Kwek noted that “geopolitical tensions weigh on the economic outlook for 2025”. However, he said that the company’s priorities “remain clear”, with efforts including the pilot of HLF Digital.

Shares of Hong Leong Finance ended Friday at S$2.51, up 0.4 per cent or S$0.01.