Hong Leong's profits slide 8.9 per cent

Hong Leong's profits slide 8.9 per cent

Hong Leong Finance posted a first-quarter net profit of $15.3 million, down 8.9 per cent from the same period a year earlier.

Net interest income and hiring charges at Singapore's largest finance company also fell by 7.5 per cent to $36.5 million, as a result of a reduction in the lending spread.

Fee and commission income, however, rose 17.2 per cent to $3.4 million, mainly owing to higher fee income from some lending products and from corporate advisory services.

Total profits from operations, before allowances, slipped 14.3 per cent over the previous corresponding period to $18.3 million.

Net loan assets, which include hire purchase receivables, were up 13.7 per cent from the same period the year before to $9 billion.

Deposits and balances shot up 19.6 per cent to $10.04 billion year on year, but were down slightly from the previous quarter's $10.05 billion.

Interest expenses were up 52.4 per cent over the same period last year to $25.9 million, owing to higher interest payable on deposits resulting from a combination of higher prevailing interest rates and a larger deposits base.

Hong Leong said it is facing pressures such as the continuing difficulties in the euro zone, the tightening labour market and rising wages in Singapore.

It will continue to target small and medium-sized enterprises and developers.

Demand for car and housing loans will continue to slacken as a result of regulatory measures introduced to cool both markets, the company said.

It added it will "focus on other platforms relevant to the customer and his business, like medical and other equipment financing".

Net asset value per share was $3.72, up from $3.68 as of Dec 31 last year. Annualised earnings per share came to 13.82 cents, down from 15.2 cents in the corresponding period last year.

Hong Leong Finance shares fell two cents to $2.77 on Tuesday. The results were released after the market closed.

Get a copy of The Straits Times or go to straitstimes.com for more stories.

Your daily good stuff - AsiaOne stories delivered straight to your inbox
By signing up, you agree to our Privacy policy and Terms and Conditions.