Hong Leong Islamic Bank Berhad announces second quarter results: Achieves Net Profit Of RM44 million, up 239.8%
Kuala Lumpur, 22 February 2013
Hong Leong Islamic Bank Berhad (the "Bank") today announced its results for the second quarter ended 31 December 2012.
Net profit after tax for the second quarter ended 31 December 2012 ("Q2FY13") at RM44 million, up 239.8% from RM13 million in the corresponding quarter last year ("Q2FY12"), based on pro forma accounts with the assumption that the merger of HLISB and EONCAP Islamic Bank Berhad (EIBB) had occurred as at 1 July 2011 ("Pro Forma Basis").
Net profit after tax for the six months ended 31 December 2012 ("H1FY13") at RM110 million, a growth of 73.1% from RM63 million in the corresponding period last year on pro-forma basis.("H1FY12")
Total Assets for Q2FY13 at RM20.0 billion.
Gross Financing grew 5.8% for the six month period ended 31 December to RM13.1 billion.
Customer Deposits at RM16.6 billion expanded by 2.0% during the six month period.
Summary of Financial Performance
Note: The accompanying table and commentary uses the pro-forma basis to better reflect a review of the Bank's performance on a like-to-like basis.
| Figures in RM 'million unless otherwise stated) | H1FY13 Actual | H1FY12* Proforma | Change vs H1FY12 | Q2FY13 Actual | Q2FY12* proforma | Change vs Q2FY12 |
|---|---|---|---|---|---|---|
EARNINGS & EFFICIENCY |
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| Total distributable income | 466 | 447 | +4.3% | 222 | 202 | +9.6% |
| Income attributable to the depositors | (224) | (261) | -14.3% | (112) | (128) | -11.9% |
| Total net income | 242 | 186 | +30.4% | 110 | 75 | +46.3% |
| Operating expenses | (96) | (91) | +6.1% | (50) | (47) | +6.7% |
| Profit before zakat & taxation | 146 | 95 | +53.5% | 59 | 28 | +113.9% |
| Profit after zakat & taxation | 110 | 63 | +73.1% | 44 | 13 | +239.8% |
| Cost-to-income ratio ("CIR") | 41.7% | 43.1% | -1.5% | 42.3% | 41.4% | +1.0% |
| CIR (excl integration cost) | 41.7% | 40.1% | +1.6% | 42.3% | 35.7% | +6.6% |
PERFORMANCE RATIO |
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| Return on equity (ROE) | 18.2% | 10.6% | +7.6% | 14.4% | 4.4% | +9.9% |
| Return on assets (ROA) | 1.0% | 0.6% | +0.4% | 0.9% | 0.2% | +0.6% |
FINANCING & DEPOSITS |
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| Assets | 20,032 | 20,915 | -4.2% | 20,032 | 20,915 | -4.2% |
| Gross financing | 13,111 | 12,016 | +9.1% | 13,111 | 12,016 | +9.1% |
| Customer deposits | 16,629 | 16,815 | -1.1% | 16,629 | 16,815 | -1.1% |
| Financing to deposits ratio | 78.8% | 71.5% | +7.4% | 78.8% | 71.5% | +7.4% |
ASSETS QUALITY |
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| Gross impaired financing ratio | 1.6% | 2.1% | -0.5% | 1.6% | 2.1% | -0.5% |
| Financing loss coverage | 178.2% | 156.1% | +22.1% | 178.2% | 156.1% | +22.1% |
| Figures in RM 'million unless otherwise stated) | H1FY13 Actual | H1FY12* Proforma | Change vs H1FY12 | Q2FY13 Actual | Q2FY12* proforma | Change vs Q2FY12 |
|---|---|---|---|---|---|---|
EQUITY & CAPITAL RATIOS |
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| Shareholders' equity | 1,239 | 890 | 39.1% | 1,239 | 890 | 39.1% |
| Tier-1 capital adequacy ratio | 9.5% | 7.3% | 2.3% | 9.5% | 7.3% | 2.3% |
| Risk-weighted capital adequacy ratio (RWCAR) | 13.4% | 11.8% | 1.6% | 13.4% | 11.8% | 1.6% |
Notes : * restated with retrospective application of MFRS 139
Profitability and Efficiency
The Bank achieved profit after tax of RM 110 million for H1FY13, a growth of 73.1% on a pro-forma basis. Return on equity (ROE) and return on assets (ROA) for H1FY13 improved to 18.2% and 1.0% respectively, on the back of higher profitability during the period.
The Bank posted total net income of RM242 million for H1FY13, a growth of 30.4% on pro-forma basis, contributed by improved yields, higher treasury income from Global Markets Islamic and recoveries of impairment allowance arising from the improvement in assets quality.
Net profit margin for H1FY13 improved to 2.25% from 1.84% on pro-forma basis in same period last year, mainly attributable to a better assets yield arising from a healthy mix of assets portfolio.
Cost-income ratio was slightly higher at 41.7% from 40.1% last corresponding period in reflection of various initiatives undertaken in enhancing branding of the merged entity.
Financing Growth
Total asset contracted to RM20.0 billion in H1FY13 from RM21.9 billion in June 2012 as part of our initiatives in optimising asset yields from the rebalancing of the funding and liquidity needs.
Gross Financing expanded by 5.8% for the six months ended 31 December 2012 to RM13.1 billion, driven by the consumer banking segment, particularly Mortgage-i which grew 11% to RM6.2 billion. In respect of business banking, financing to business enterprise from both the small-medium enterprises (SME) and middle market segment, expanded slightly by 1.5% for H1FY13 to RM2.3 billion.
Deposits & Liquidity
Customer deposit grew 2.0% to RM16.6 billion for the six month period ended 31 December 2012, driven by growth in core deposits, particularly the general investment account.
Financing to deposit ratio increase to 78.9% at HYFY13 from 76.0% at June 2012, remain strong and supportive of business growth.
Asset Quality and Capital
The Bank's asset quality continued to strengthen with gross impaired financing ratio and financing loss coverage ratio improved to 1.6% and 178% in H1FY13 respectively.
Risk Weighted Capital Adequacy Ratio (RWCR) remains strong at 13.4%, well above the minimum requirement of 8%.
Business Outlook
HLISB maintains a positive outlook for the Islamic Banking industry. The Bank is therefore optimistic in continuing to build its capabilities and strengths to further grow its corporate and investment banking portfolios. In addition to that and towards ensuring sustainable long-term value, the Bank also continuously strives to further strengthen its non-financing income segments.
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Press Release - 22/02/2013
