KUALA LUMPUR, August 19 (Bernama) -- Hong Leong Bank Bhd's pre-tax profit for its fourth quarter ended June 30, 2010, rose 33 per cent to RM345 million cent as against the third quarter.
The pre-tax profit was up 66 per cent when compared to the corresponding fourth quarter in the previous financial year.
For the financial year, the banking group reported a higher pre-tax profit of RM1.185 billion compared to RM1.132 billion previously.
Revenue during the period, however, declined to RM2.056 billion from RM2.098 billion previously.
Group managing director and chief executive Yvonne Chia said the fourth-quarter results was the best for the last 20 quarters in terms of net profit delivered to shareholders.
Net profit for the fourth quarter was RM301.105 million, up 32 per cent as against the third quarter and 51 per cent as against the corresponding fourth quarter last year.
"Net profit has been growing by a compound annual growth rate of 16 per cent over the last five years," Chia said during a media briefing to announce the bank's financial results.
She said the strong earnings growth continued in the financial year ended June 30, 2010, as net profit increased to RM988 million, six per cent ahead of consensus street estimates by market analysts.
Earnings per share saw a 9.1 per cent year-on-year expansion to 68.2 sen, which was 11 per cent ahead of consensus estimates.
"In the second half of financial year 2010 (January to June 2010), loan growth accelerated to post a 6.5 per cent growth against December 2009, or at 3.8 times rate faster than the first half," Chia said.
"In financial year 2010, we extended more loans and financing to domestic business enterprises, at a growth rate of 12.3 per cent year-on-year," she said.
Fixed deposits grew 4.9 per cent as at end-June 2010 while the sector ended 1.7 per cent higher as against June 2009.
Islamic banking posted a 11.4 per cent increase in pre-tax profit in financial year 2010, contributing 9.4 per cent of the group's pre-tax profit.
According to Chia, the group will continue to seek opportunities regionally.
"Profit contribution from the bank's 20 per cent equity interest in Bank of Chengdu Co Ltd in the financial year ended June 30, 2010, was RM144 million, up 44 per cent from last year," she said.
Chia said a lynchpin in Hong Leong Bank's foray into China, Bank of Chengdu continued to make significant strides in its transformation into a market-oriented regional bank.
Among the milestones recorded for Bank of Chengdu's latest financial results for the period ended Dec 31, 2009, was that its net profit crossed the RMB1 billion mark to RMB1.08 billion.
"Deposits for Bank of Chengdu expanded 45.3 per cent while loans grew 36 per cent, powered by a 54 per cent growth in retail loans and 34 per cent growth in corporate and business loans," she said.
In March 2010, Hong Leong Bank together with Bank of Chengdu obtained approval from China Banking Regulatory Commission for Sichuan JinCheng Consumer Finance Ltd Co, a 49.51 per cent joint venture company which is part of the first batch of approved companies to start consumer finance operations in central and western China.
"Greenfield operations have commenced in the last quarter of financial year 2010 and Sichuan JinCheng is positioned as a strategic opportunity to expand and diversify the bank's consumer banking capabilities into a high growth, high potential consumer financing market in China," Chia said.
She said that Hong Leong Bank's two branches in Singapore and Hong Kong turned in a better performance for financial year 2010, with a 50 per cent improvement in pre-tax profit to contribute 2.3 per cent of the bank's operating pre-tax profit, up from 1.5 per cent last year.
Hong Leong Bank Vietnam Ltd, the first wholly-owned subsidiary of any Southeast Asian banking group in Vietnam, started operations in Ho Chi Minh city in the second quarter of financial year 2010.
"Still early days, the bank remains focused on building greenfield business operations and strengthening its foundations to strongly participate in the growth story of Vietnam," Chia said.
As for the status on the proposed acquisition of EON Capital Bhd, Chia described the corporate move to acquire EON Capital as "an inorganic in-country commitment to create a stronger bank to support the country's economic transformation".
"The merger means a winning combination for customers. Customers will have the convenience of the country's second largest branch network and one of the most comprehensive, competitive product suites for all their financial needs," she said.
"We are even more excited with the prospects of employees from both banking groups becoming part of a larger franchise with regional ambitions, one that supports personal development and rewards success."
She added that the November 30 deadline to get all relevant approvals for the corporate deal involving EON Capital still remained.
-- BERNAMA
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