SINGAPORE (Feb 27): Hong Leong Finance reported a 61.5% rise in FY17 earnings to $85.7 million from $53.1 million a year ago, which is equivalent to 19.3 cents per share, after topping up provisions amounting to $3.8 million against $1.1 million in FY16.
Profit from operations before allowances/provision grew 63.9% to $106.8 million from $65.1 million from the previous year, due mainly to decreases in interest expense, which fell 25.9% to $44.2 million on the back of lower interest payable on deposits.
Over the full-year period, interest in loans fell 5.8% to $223.9 million compared to $237.8 million in FY16, while other interest income declined 4% to $29.3 million from $30.7 million previously.
Meanwhile, hiring charges grew 25% on-year to $48.4 million from $38.7 million in FY16. Interest expense fell 25.9% to $126.4 million from $170.5 million in FY16.
Loans and advances (before allowance) grew 3.8% to $10 billion from $9.6 billion in the previous year. Deposits and balances of customers registered an increase of 2.1%, closing at $10.7 billion as at end-2017.
Accordingly, total interest income/hiring charges fell 1.8% to $301.8 million due to a lower average loan base, while net interest income/hiring charges for the year grew 28.3% to $175.4 million over the year.
At the end of FY17, the group’s shareholders’ funds totalled $1.74 billion, equivalent to $3.91 per share.
Hong Leong is proposing a final dividend of 9 cents per share for the year, bringing the aggregate distribution for FY17 to approximately $58 million compared to $40 million for FY16.
In its outlook for 2018, Hong Leong notes continued challenges faced by all industries due to the conditions of changing customer behaviour, new competitors and framework.
The group nonetheless says it will continue to strive in productivity and innovation to remain relevant to the business and individual customers, while remaining committed to ensuring that processes are customer-centric and efficient, and that resources are prudently managed.
“Hong Leong Finance will aggressively seek to expand its customer relationships and drive partnership and collaboration in the sharing economy to achieve greater success. Digitisation along with the technology will further bring about opportunities for the company to serve its customers in a more contemporary manner,” says the group’s chairman, Kwek Leng Beng, in his statement on Tuesday.
“These straight forward business priorities are augmented by our continued conservative management of strong capital, high levels of liquidity, stringent underwriting parameters and robust management of our portfolio of assets,” he adds.
Shares in the group closed 3 cents higher at $2.68.
