An interim dividend of 2.75 Singapore cents per share has been declared for the half year

 

[SINGAPORE] Hong Leong Finance posted a 38.7 per cent year-on-year fall in net profit to S$32.2 million for the six months ended Jun 30, 2025. 

 

This was driven by compressed net interest margins, at 1.3 per cent, as declining interest yields on loans and liquid assets outpaced the reduction in deposit costs from falling benchmark interest rates, the company said in an earnings statement on Friday (Aug 8).

 

Net interest income and hiring charges for the half-year shrunk by 20.8 per cent to S$89.2 million, from S$112.7 million.

 

Fee and commission income edged up 2.7 per cent to S$4.1 million, from S$4 million, supported by healthy loan fee income.

 

The non-performing loan ratio remained low at 0.4 per cent, thanks to the company&rsquo s &ldquo prudence in its credit risk management and close monitoring of high-risk sectors with adequate loss allowances to cover the loan portfolio&rdquo .

 

An interim dividend of 2.75 Singapore cents per share was declared for the half year, from 3.75 cents the year before. The dividend will be paid on Sep 5 after books closure on Aug 21.

 

Total operating expenses for the half-year was up 9.1 per at S$60.8 million, from S$55.7 million. 

 

Net loan assets increased by 1.9 per cent on the year to S$11.8 billion. The loan portfolio remained &ldquo largely secured&rdquo , said the company. 

 

&ldquo Looking ahead, the financial industry is expected to operate amid heightened macroeconomic uncertainty, shaped by persistent geopolitical tensions, moderating global growth, and shifting monetary policy landscapes,&rdquo it added. 

 

&ldquo While central banks have signalled a potential gradual easing cycle, the path forward remains unclear, given ongoing inflationary pressures, geopolitical instability, and the impact of tariff measures.&rdquo

It also records a more than 300% increase in vehicle loans processed digitally

 

[SINGAPORE] Hong Leong Finance (HLF) announced that it has seen a more than 300 per cent increase in electric vehicle (EV) loans, from S$73 million in 2023 to S$314 million in 2024.

 

EV loans aside, HLF also reported a more than 300 per cent increase in vehicle loans processed digitally, from S$99 million in 2023 to S$400 million in 2024. This was on the back of its new digital platform, which connected with major car dealers directly for automotive financing.

 

This new system eliminated a manual, paper-based system and redundant data entry. The integration with GovTech&rsquo s MyInfo, the Singapore government&rsquo s data management platform, also reduced errors and ensured secure access to verified personal data.

 

HLF is planning to introduce new capabilities that will enable car dealers to offer online car markets.

 

&ldquo Our innovative digital platform for vehicle loans has proven to be a game changer, offering speed and security for both car dealers and customers,&rdquo said Ang Tang Chor, president of HLF.

Deepening the relationship between Hong Leong Finance and Malaysia&rsquo s Hong Leong Financial Group can help deliver long-term value for stakeholders from both sides in an increasingly complex environment

 

[SINGAPORE] Succession troubles surfaced recently at local-listed property and hotel group City Developments Ltd : C09 -0.88% (CDL), when executive chairman Kwek Leng Beng clashed with his son and CDL&rsquo s group chief executive officer Sherman Kwek over corporate governance issues.

 

Billionaire Kwek Leng Beng, 84, joined CDL&rsquo s board in October 1969 and has been the group&rsquo s executive chairman since January 1995. 

 

Besides being synonymous with CDL, Kwek Leng Beng has been leading locally listed Hong Leong Finance : S41 0% for decades. He joined the board of what is now Singapore&rsquo s largest finance company in March 1979 and has been its executive chairman since November 1984.

 

Hong Leong Investment Holdings

According to latest annual reports, HLIH has a direct and deemed interest of about 49.3 per cent in CDL and 45.9 per cent in Hong Leong Finance, as well as an indirect interest of about 77.7 per cent in Bursa-listed HLFG. 

 

HLIH has no single majority shareholder. Its shareholders are various members of the storied Kwek/Quek family whose fortune can be traced to Kwek Hong Png &ndash Kwek Leng Beng&rsquo s father &ndash and his siblings.

 

Kwek Leng Beng and his cousins &ndash Kwek Leng Kee, Malaysian tycoon Quek Leng Chan, Quek Leng Chye, Hong Leong Asia&rsquo s executive chairman Kwek Leng Peck and Kwek Leng Keow &ndash are among HLIH&rsquo s key shareholders. 

 

Kwek Leng Kee, Kwek Leng Peck and Kwek Leng Beng&rsquo s nephew Kevin Hangchi are directors of Hong Leong Finance.

Hong Leong Finance&rsquo s net profit climbed 11 per cent year on year to S$104.1 million in 2024. Last year&rsquo s net profit exceeds the pre-Covid pandemic net profit of S$103.1 million in 2019 by about 1 per cent.

 

However, Hong Leong Finance&rsquo s numbers pale when compared with Singapore&rsquo s largest bank, DBS : D05 -3.26%, which posted net profit of S$11.3 billion in 2024, or 77 per cent above that of 2019. 

 

Including the proposed final dividend, dividend per share (DPS) for Hong Leong Finance is up 10 per cent from a year ago. In comparison, DBS&rsquo DPS increased 27 per cent in 2024. 

 

Investors value DBS much more than Hong Leong Finance. Despite the market sell-off, the former trades at a large premium to its latest reported book value, whereas the latter trades way below book value.

 

Hong Leong Finance prides itself on serving the small and medium-sized enterprises (SMEs) in Singapore. However, the local banking trio of DBS, OCBC and UOB are also strong in serving SMEs. And the trio has much larger balance sheets and geographic footprints.

 

Moreover, competition in Singapore&rsquo s financial services scene has intensified with the emergence of digital banks. For example, GXS and MariBank can serve retail and corporate customers. 

 

Hong Leong Financial Group

From a competitive standpoint, Hong Leong Finance can, subject to overcoming any regulatory hurdles, benefit from being part of HLFG. For one thing, it might be better able to serve many SMEs that are looking to grow in neighbouring Malaysia &ndash whether in the Johor-Singapore Special Economic Zone or elsewhere.

 

HLFG is a diversified financial conglomerate encompassing businesses that provide a range of financial products and services, including commercial and Islamic banking under Hong Leong Bank, insurance, investment banking, stockbroking and asset management. 

 

HLFG is the majority owner of its crown jewel, Bursa-listed Hong Leong Bank, which ranks among Malaysia&rsquo s largest banks. Hong Leong Bank also holds a major stake in the Bank of Chengdu in China.

 

Quek Leng Chan &ndash one of Malaysia&rsquo s richest persons &ndash is chairman of both HLFG and Hong Leong Bank, which are part of Malaysia&rsquo s Hong Leong Group that he founded together with Kwek Hong Png. 

 

Perhaps Hong Leong Finance can be brought under HLFG&rsquo s umbrella via either HLFG or Hong Leong Bank acquiring some shares in Hong Leong Finance, whether from HLIH and/or other shareholders.

 

Sure, questions loom over succession issues at 81-year old Quek Leng Chan&rsquo s vast business empire, which includes GuocoLand : F17 0%, of which he is chairman and a major shareholder. 

 

Nonetheless, HLIH and the wider Kwek/Quek family may find there are tremendous synergies from having Hong Leong Finance be an integral part of HLFG, which boasts a diverse range of offerings of financial services and products.

 

Meanwhile, Hong Leong Finance&rsquo s minority shareholders gain if the finance company can better help SMEs here better tap Malaysian opportunities. Also, Hong Leong Finance might find both revenue and cost-saving opportunities from working closely with various HLFG businesses.

 

In addition, through working closely with Hong Leong Finance, HLFG and Hong Leong Bank can more effectively service their Malaysian clients in the Singapore market. 

 

In short, deepening the relationship between Hong Leong Finance and members of HLFG can help deliver long-term value for stakeholders from both sides in an increasingly complex environment.

 

Sharpening Hong Leong Finance&rsquo s competitiveness is particularly crucial, given the economic shock caused by the US&rsquo rising trade protectionism. The Kwek/Quek family should explore changing the ownership of Hong Leong Finance to benefit themselves and minority shareholders.

Its non-performing loan ratio hits a new low of 0.4 per cent

 

HONG Leong Finance : S41 +0.4% posted a 10 per cent rise in net profit to S$51.5 million for the six months ended December 2024.

 

This was driven by an expanded net interest margin, at 1.6 per cent, on the growth of asset yields and a &ldquo moderated&rdquo funding cost, the company said in its earnings statement on Friday (Feb 21).

 

Net interest income and hiring charges for the half-year rose 11.5 per cent to S$112.4 million, with savings in interest expenses offsetting the lower interest income recorded.

 

The non-performing loan ratio has hit a new low of 0.4 per cent, thanks to &ldquo prudent lending practices&rdquo , it added.

 

Hong Leong Finance has proposed a final dividend of S$0.10 per share, to be paid on May 22. This is up slightly from last year&rsquo s final dividend of S$0.09 per share.

 

&ldquo The company has delivered a strong financial performance in 2024&rdquo despite economic challenges, said Hong Leong Finance chairman Kwek Leng Beng.

 

That said, the company&rsquo s H2 fee and commission income declined 26 per cent, to S$4.1 million, as property financing activities &ldquo remained subdued&rdquo , it noted.

 

Meanwhile, total operating expenses in the half-year increased 1.8 per cent to S$53.1 million. This was due to the higher depreciation charge on the capital investment for HLF Digital, the company&rsquo s digital financial services platform launched in August 2024.

 

For FY2024, Hong Leong Finance&rsquo s profit rose 11.5 per cent to S$104.1 million, on the back of an 11.3 per cent rise in net interest income and hiring charges to S$225.1 million. The company attributed the growth to &ldquo effective management of loan and deposit repricing cost&rdquo .

 

Hong Leong Finance&rsquo s net loan assets stood at S$11.7 billion as at Dec 31, 2024, up by 0.1 per cent from the year-ago period.

 

Looking ahead, Kwek noted that &ldquo geopolitical tensions weigh on the economic outlook for 2025&rdquo . However, he said that the company&rsquo s priorities &ldquo remain clear&rdquo , with efforts including the pilot of HLF Digital.

The board is proposing an interim dividend of 3.75 Singapore cents per share

HONG Leong Finance : S41 +1.26% posted a 12.9 per cent rise in net profit to S$52.6 million for the half year ended Jun 30, from S$46.6 million in the same period a year ago.

 

This was driven by higher net interest income, as net interest margin expanded to 1.6 per cent, from 1.48 per cent in the year-ago period.

 

Earnings per share for the period stood at S$0.2345, up from S$0.2078 previously.

 

Hong Leong&rsquo s directors have proposed an interim dividend of 3.75 Singapore cents per share, up from 3.5 Singapore cents per share the year before.

 

Net interest income rose 11.1 per cent to S$112.7 million in H1 on the back of improved asset yields, which outpaced elevated funding costs on a year-on-year basis, Hong Leong said in a bourse filing on Thursday (Aug 8).

 

Fee and commission income fell by 9.2 per cent to S$4 million on subdued large mortgage lending activities in financial markets.

 

Total operating expenses for the period rose 5.6 per cent to S$55.7 million, due mainly to higher staff cost from wage increments and increased spending to &ldquo enhance regulatory compliance and risk management&rdquo .

 

This was however partially offset by a broad-based decline in operating expenses with tightened cost control, Hong Leong pointed out.

 

The non-performing loan ratio was stable at 0.7 per cent.

 

Hong Leong had net loan assets of S$11.5 billion as at Jun 30, down 1 per cent from Dec 31, 2023, and 1.1 per cent lower year on year.

 

Commenting on trends and competitive conditions in the industry, Hong Leong pointed to the &ldquo successful&rdquo roll-out of its digital app as a &ldquo milestone in our digital transformation journey&rdquo . It added: &ldquo We will be implementing various strategic digital initiatives and payment solutions to meet the needs of our customers and enhance the mitigation measures on cybersecurity and technology risks.&rdquo

 

HONG Leong Finance reported on Friday (Feb 23) a 45.4 per cent decline in net profit for the second half of 2023, on the back of lower net interest income.

 

Net profit for the six months ended Dec 31, 2023 fell to S$46.8 million from S$85.8 million in the same period the year before. The directors have proposed a final dividend of S$0.09 per share, down from the final dividend of S$0.1325 per share in FY22.

 

While Hong Leong Finance : S41 0% reported a 40.7 per cent year-on-year increase in interest income and hiring charges in the second half of the year, net interest income and hiring charges were 30.9 lower amid higher interest expenses. Interest expenses tripled to S$195.1 million from S$64.4 million in H2 FY22.

 

Fee and commission income fell in the second half, declining to S$5.5 million from S$8.3 million in H2 FY22.

 

For the full year, the group&rsquo s net profit fell 28.7 per cent to S$93.4 million, with higher interest expenses also weighing on the bottom line.

 

Full-year interest income and hiring charges rose 68.8 per cent to S$569.1 million, but interest expenses also rose 286.4 per cent to S$366.9 million, resulting in net interest income and hiring charges falling 16.5 per cent to S$202.2 million.

 

Chairman Kwek Leng Beng said in a statement that the group is cautiously optimistic about the economic landscape of Singapore in the coming year.

 

&ldquo We remain resolute in seizing strategic opportunities and exercising financial prudence, while supported by strong governance practices. We understand that navigating the financial landscape requires a delicate balance between business performance and sustainable value creation,&rdquo he said.

 

Net asset value per share rose to S$4.59 as at December 2023, from S$4.55 the year before.