Hong Leong Bank Announces FY2025 Results

Hong Leong Bank announces FY2025 results:

Delivering strong business performance and higher dividend payout for shareholders

Kuala Lumpur, 27 August 2025 - Hong Leong Bank Berhad (“Bank” or “HLB”), (BM: HLBANK) today announced its results for the financial year ended 30 June 2025 (“FY2025”).

• Operating profit before allowances for FY2025 rose 14.2% year-on-year (“y-o-y”) to RM3,919 million.
• Non-interest income expanded 33.4% y-o-y to RM1,471 million, with a higher non-interest income ratio of 23.0%.
• Commendable gross loans/financing growth of 7.8% y-o-y to RM210.1 billion, whilst upholding a prudent gross impaired loan (“GIL”) ratio of 0.54%.
• CASA increased 9.6% y-o-y to RM78.5 billion, resulting in an improved CASA ratio of 32.9%.
• The Board has declared a higher final dividend of 68.0 sen per share.

Kevin Lam, Group Managing Director and Chief Executive Officer of HLB commented, “Hong Leong Bank delivered another year of resilient and robust performance amidst a challenging economic landscape. This is a testament to the focused execution of our 3-5 Year Transformative Plan, underpinned by strong growth momentum in loans/financing, improving non-interest income contribution and solid asset quality.

For FY2025, the pre-BOCD profit registered a 21.4% y-o-y growth to RM4,302 million attributable to robust topline expansion, diligent cost management and the one-off release of management overlay allowance (“MOA”) in the previous quarter. The normalised pre-BOCD profit excluding the MOA release is still commendable, registering a double-digit growth of 10.1% to RM3,903 million.

The strong growth in our gross loans/financing portfolio of 7.8% y-o-y, reflect the deep trust our customers place in us. The growth was driven by expansion in our mortgage, auto loans, SME and commercial banking segments, while upholding a solid asset quality with GIL ratio of 0.54%. We are confident that our customer-centric approach, combined with strategic investments in digital innovation and sustainable practices, will continue to drive growth and solidify our position towards our unwavering goal to be the best-run bank in Malaysia.”

Solid Operating Performance

• Total income for FY2025 recorded a 10.9% y-o-y growth to RM6,398 million, attributed by sustained growth in both loans/financing portfolio and non-interest income contribution.
• Net interest margin (“NIM”) was prudently managed, improving by 3bps quarter-on-quarter to 1.90% for the quarter ended 30 June 2025, while FY2025 NIM is 4bps higher y-o-y at 1.90%. Net interest income increased 5.5% y-o-y to RM4,927 million, as a result of expansion in loans/financing and lower cost of funds.
• Non-interest income surged 33.4% y-o-y to RM1,471 million for FY2025, primarily driven by robust performance in wealth management and global markets franchise sales, complemented by favourable treasury and foreign exchange gains. Non-interest income ratio was higher at 23.0%.
• Operating expenses for FY2025 were effectively managed at RM2,479 million, yielding positive JAWS and an improved cost-to-income ratio of 38.7%, due to strategic cost management initiatives and benefits from AI realisation.
• Profit before tax and profit after tax were higher at RM5,360 million and RM4,273 million respectively. Excluding the one-off MOA release and dilution loss from associates in the previous quarter, the normalised profit after tax would have been higher by 4.3% y-o-y at RM4,378 million.

Commendable Loans/Financing Growth

• Gross loans, advances and financing continued its growth momentum, with 7.8% y-o-y growth to RM210.1 billion, predominantly led by strong performance in our key segments of mortgage, auto loans, SME and commercial banking, as well as key overseas markets.
• Domestic loans/financing expanded 8.0% y-o-y, outperformed the industry growth rate of 5.2% y-o-y.
• Residential mortgages are 6.0% higher y-o-y at RM100.5 billion, supported by a healthy loan pipeline. Transport vehicle loans/financing maintained its growth trajectory, expanding 10.1% y-o-y to RM24.2 billion. This reflects the effectiveness of the Bank's strategic initiatives in dealer engagement and green car financing.
• Loans to domestic business enterprises recorded a growth of 7.5% y-o-y to RM71.1 billion. Our unwavering support for the SME sector continues, with loans/financing to SMEs expanding 8.1% y-o-y to RM40.6 billion; of which, our community SME banking portfolio increased 10.4% y-o-y. This is reflective of our sustained focus in delivering tailored financial solutions, leveraging digital capabilities and providing personalised support to our clients amidst evolving market conditions.
• Loans from overseas operations grew 5.1% y-o-y, led by Singapore with 11.2% y-o-y expansion.

Stable Funding and Liquidity Positions

• The Bank continues to maintain stable funding and liquidity positions that are supportive of business growth with loans to deposits ratio (“LDR”) of 86.5% as at 30 June 2025. Both the daily average for the quarter and rolling 12 months average liquidity coverage ratio (“LCR”) stood at 131.6% and 133.3%, sufficiently above regulatory requirements.
• Customer deposits for FY2025 increased 8.4% y-o-y to RM238.9 billion, with CASA uplifted by 9.6% y-o-y to RM78.5 billion. This represents an improved CASA ratio of 32.9%, a result of the effectiveness of our strategic focus on community deposit acquisition and enhanced customer-centric cash management solutions.
• The Bank’s funding base remained stable with 8.8% y-o-y higher individual deposit portfolio of RM121.8 billion, representing an individual deposit mix of 51.0%

Asset Quality and Capital Positions Remained Solid

• The Bank’s asset quality position remained solid with a GIL ratio of 0.54%.
• Loan impairment coverage (“LIC”) ratio was prudently maintained at 96.8% as at 30 June 2025. Inclusive of the value of securities held on our GIL, the Bank’s LIC ratio is well positioned at 166.8%, whilst with regulatory reserve, the coverage ratio is higher at 257.9%.
• Capital position of the Bank is healthy with CET 1, Tier 1 and Total Capital ratios at 13.2%, 14.2% and 16.3% respectively as at 30 June 2025.

Dividend

• The Board has declared a final dividend of 68.0 sen per share, bringing the total dividend to 96.0 sen per share for FY2025, an uplift of 28 sen compared to the previous year. This translates to a higher dividend payout ratio of 46.6%, marking a considerable rise from 33.6% last year.

A New Milestone in HLB’s Branch Transformation Plan

• HLB has revealed a new milestone in its ambitious branch transformation plan with the unveiling of its fleet of next-generation branches, including reimagined flagship branches in Old Klang Road, Cheras and Kota Damansara, alongside a renewed branch in Cheng, Melaka.
• As part of its Digital Bank Plus Much More proposition, the Bank has reimagined its physical branches to be spaces for personal connection, where comfortable interiors encourage meaningful conversations about customers’ financial futures. The branches serve as a “one-stop shop” where customers can address all their financial service needs, creating a truly hybrid banking model where its physical presence amplifies its digital capabilities by serving as centres for complex financial advisory, in-person portfolio management and relationship building.
• In a resounding testament to this innovative branch banking approach, HLB has been awarded the Best Branch Transformation Initiative in Asia Pacific 2025 award at The Asian Banker Global Excellence in Retail Finance Awards 2025, underscoring the Bank’s leadership in redefining the physical banking experience and its unwavering commitment to customer-centricity.

Continued Excellence in SME Banking

• HLB has been named the Best SME Bank in Malaysia for the sixth time at The Asian Banker Global Excellence in Retail Finance Awards 2025. Building on its consistent commitment to the SME ecosystem, HLB has also been named Best SME Bank in Malaysia at the Asian Banking & Finance Retail and Wholesale Banking Awards 2025, and Malaysia’s Best Bank for SMEs at the Euromoney Awards for Excellence 2025, demonstrating its consistent excellence in pioneering SME banking solutions and catering to the unique needs of the SME market.
• One key advancement in the Bank’s business banking solutions is the Partnership Onboarding feature, which allows SME customers to onboard partnership entities directly through in-branch tablets, allowing the Bank to accommodate a wider range of business structures. HLB’s in-branch tablet-based onboarding feature can now also be used to support the opening of Foreign Currency Accounts (“FCA”), providing further convenience for businesses dealing in foreign markets.

Supporting the SME Ecosystem through Strategic Partnerships

• As part of strengthening its support for the SME ecosystem, HLB has signed a Memorandum of Understanding (“MoU”) with DCAP Digital Sdn Bhd, enhancing its SME lending solutions infrastructure and driving financial inclusion for underbanked communities in Malaysia.
• Through this collaboration, HLB aims to leverage DCAP Digital’s expertise in LaaS solutions, and especially its proprietary AI-driven credit scoring engine designed for more accurate and inclusive credit assessments, to assist its growing pool of motorcycle dealer customers with seamless loan application processing and other cash management solutions.
• HLB has also announced the renewal of its MoU with the Malaysia Motorcycle and Scooter Dealers Association (“MMSDA”), reinforcing its commitment to support and grow the two-wheeler industry in Malaysia.

A Year of Innovation and Digital Transformation

• HLB has also been recognised as the Domestic Cash Management Bank of the Year at the Asian Banking & Finance Retail and Wholesale Banking Awards 2025, highlighting the Bank’s commitment to empowering its clients with sophisticated cash management solutions that streamline operations and enhance financial control.
• The Bank has also received the Digital Transformation of the Year award at the Asian Banking & Finance Retail and Wholesale Banking Awards 2025 for its innovative collection platform. Since 2018, HLB has embarked on a pervasive transformation journey, fundamentally reshaping the collections process with an industry-first, fully integrated, web-based collections platform.

Supporting Innovation and the Creative Industries

• This year, HLB announced its official sponsorship of global icon G-DRAGON's highly anticipated "Übermensch" world tour, which electrified Kuala Lumpur with two concerts on July 19 and 20, 2025, at Axiata Arena, Bukit Jalil. As part of this, HLB Visa Credit Cardholders were provided with special pre-sale access and opportunities to secure their spot at this highly sought-after concert.
• In support of innovation and the creative industries, HLB also announced its support for the Malaysian International Film Festival (MIFFest). The festival celebrated cinema, culture, and the art of filmmaking, bringing together industry professionals and movie lovers. And as part of this partnership, HLB cardholders received exclusive benefits, including an unlimited pass to watch all festival films at only RM39.99.

Business Outlook

Kevin Lam commented, “We are cautiously optimistic about the Malaysian economy this year, although a slowdown appears imminent given uncertainties and repercussions stemming from the US trade restrictions and policies, which will likely leave no countries with an open economy unscathed. We are confident that the Malaysian economy will expand at the official growth forecast of 4.0% to 4.8% in 2025, as resilient domestic demand is expected to help cushion downside risks from the external front as global trade softens, with additional support from policy easing measures across the globe to help ease the blow from more restrictive tariffs.

Driven by our aspiration to be the Best Run Bank in Malaysia, the Bank remains steadfast in the execution of our 3-5 Year Transformative Plan to deliver sustainable returns to stakeholders. Our priority has always been to innovate our offerings so as to provide customers with convenient and seamless experiences across all touchpoints as we stay true to our brand promise of “Built Around You”. As a customer-centric bank, we remain committed to support our customers on their banking and lending needs during this challenging period.