HLFG enjoys Phenomenal 139% Net Profit Increase for the Nine Months ended 31 March 2011


The 3rd quarter financial results of the Hong Leong Financial Group Berhad (‘HLFG) for the nine months ended 31 March 2011 has just been announced to Bursa Malaysia yesterday evening. With a net profit growth rate of 139%, the HLFG Group has enjoyed an increase from RM1,665.6 million for the period ended 31 March 2011 as compared to RM697.7 million in the previous corresponding period last year.

“These results reflect the continued sterling business performances from all our business divisions for what will be a landmark year for us; a reflection of our collective efforts over the years in progressively strengthening our business franchises.  Even after backing off the one-off gains arising from the insurance deal with MSIG Japan, including the transfer of HLA’s General business to MSIG Malaysia, our results show a very strong organic business growth of 29.5% over last year!” commented Mr Raymond Choong, President & CEO of HLFG.

HLFG’s Commercial Banking division, Hong Leong Bank Berhad (“HLB”), achieved a growth of 22% for the period ended 31 March 2011 against the corresponding period last year.  “With the recent completion of the acquisition of EON Bank by HLB, we look forward to bigger and better results from the enlarged Commercial Banking division, including synergies and increased business opportunities”, added Mr Raymond Choong.

The new restructured Insurance division reflecting our partnership with MSIG Japan since 1 October 2010, recorded a profit after tax of RM 822.9 million compared to RM22.6 million in the previous period.  Backing off the one-off results from the insurance deal, the ‘normalised’ profit after tax for the Insurance division was RM60.9 million, an improvement of 169% over last year.  This was largely helped by maiden contributions accreting from our 30% associate share in profits in the enlarged MSIG Malaysia.  It is noted that only the gains from the HLA General insurance transfer was reflected through the Income Statement; whereas the gains from the 30% divestment in the Life business (being Hong Leong Assurance Berhad (“HLA”)) was reflected through the reserves in accordance with FRS 127.

The Investment Banking division also recorded a higher after tax profit of RM31.7 million for the period as compared to RM11.6 million in the previous period, an increase of 173%. These strong results are due to much higher fee income emerging from our relatively new investment banking unit within Hong Leong Investment Bank during the period.

Earnings per share increased by 209% to 133.0 sen for the period.  The return on shareholders funds improved to 30.4% pa on an annualized basis whereas shareholder funds grew by 41% to RM7.3 billion from RM5.2 billion as at 30 June 2010.  Net assets per share also increased to RM7.05 from RM4.98 as at 30 June 2010.

We are pleased to also announce that HLFG has declared a higher single tier second interim dividend of 15 sen per share (last year 14 sen per share) and a special dividend of 3 sen per share. The total gross dividend declared to-date of 28 sen per share is 21.7% higher than last financial year.

“We wish to reflect our appreciation to the shareholders, albeit in a modest way, with this increased second interim dividend declared.  Our surplus funds are committed to strengthening and supporting HLB in its new enlarged entity following the EON deal.  We have not only achieved bigger and stronger franchises in both our key Commercial Banking and Insurance divisions through corporate exercises, but also through strong organic business performances.  We have funded this via internal generated funds and sensible levels of borrowings.  I am confident that we are now even better positioned to leverage on our much stronger and enlarged franchise position for future growth and results”, said Mr Raymond Choong.