Hong Leong Finance has posted earnings of $44.7 million in 1HFY21 ended June, up 22.4% from $36.5 million in the year before. This was driven by stepped-up efforts in managing the costs of funds and lower loan loss allowances.
On a fully diluted basis, earnings per share was 19.96 cents, compared to 16.31 cents in the year before.
With this, net asset value per share was $4.33 on June 30, from $4.29 on Dec 31.
Net interest income for the first six months of the year was up 8.6% to $89.2 million, from $82.2 million in the year before.
This comes as the group calibrated on its funding strategies to pare down the deposit base and tighten funding cost to manage the downward pressure on net interest margin. The follows sustained low benchmark interest rates.
Hiring charges were down 15.4% to $23.0 million in 1HFY21.
In this time, fee and commission income remained stable at $4.7 million, with fees coming in mainly from lending and corporate finance activities.
Other interest income plunged 55% to $8.4 million, from $18.7 million in 1HFY20.
Other operating income – which includes profits/losses on the disposal of plant and equipment - jumped by 89.2% to $157,000.
Meanwhile, interest expenses were down 64.7% y-o-y to $33.9 million.
Total staff and operating expenses were up 15.1% in 1HFY21 to $43.5 million, from the low base of 1HFY20 following the budget relief measures from the government.
Excluding the grants of $0.1 million in 1HFY21 and $7.9 mainly for the offset of staff costs from the Jobs Support Scheme in 1HFY20, total staff and operating expenses were down 4.6%.
As at June 30, Hong Leong Finance's cash and cash equivalents stood at $877.9 million, down from $1,888.0 million the year before.
The group has declared an interim dividend of 3.75 cents per share, in respect of its performance in FY2021. This is up from the 3.5 cent interim dividend paid out in 1HFY20.
Shares in Hong Leong Finance closed up 2 cents or 0.81% at $2.48 in Aug 5.
