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Hong Leong Islamic Bank Announces Full Year Results
Kuala Lumpur, 28 August 2012
Hong Leong Islamic Bank Berhad (the “Bank”) today announced its results for the financial year ended 30 June 2012.
- Net profit after tax of Hong Leong Islamic Bank for the financial year ended 30 June 2012 (“FY12”) stands at RM149.7 million [an increase of 25% over the previous financial year based on pro forma accounts with the assumption that the merger had occurred as at 1 July 2010 (“Pro Forma Basis”)].
- Net profit after tax for the fourth quarter ended 30 June 2012 (“Q4FY12”) at RM46.4 million (“Q4FY11”) [an increase of 40% over the previous corresponding quarter on a Pro Forma Basis].
- Total Assets at RM21.9 billion, a growth of 8% from the previous financial year on a Pro Forma Basis.
- Gross Financing &Advances grew to RM12.4 billion, or 11% growth year-on-year on a Pro Forma Basis.
- Customer Deposits expanded to RM16.3 billion, or 9% year-on-year on a Pro Forma Basis.
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) |
FY12 |
FY11 |
Change |
FY12 |
FY11 |
Change |
|---|---|---|---|---|---|---|
| EARNINGS & EFFICIENCY |
|
|
|
|
|
|
| Total distributable income | 907.6 |
782.2 |
+16% |
760.5 |
396.8 |
+92% |
| Income attributable to the depositors | (490.3) |
(409.2) |
+20% |
420.0) |
(230.2) |
+82% |
| Total net income | 417.3 |
373.0 |
+12% |
340.5 |
166.6 |
+104% |
| Operating expenses | (168.5) |
(180.9) |
-7% |
(136.3) |
(76.5) |
+78% |
| Profit before tax | 248.8 |
192.1 |
+30% |
204.2 |
90.1 |
+127% |
| Profit after tax | 182.3 |
146.1 |
+25% |
149.7 |
67.5 |
+122% |
| Cost-to-income ratio (“CIR”) | 38% |
42% |
-4% |
37% |
40% |
-3% |
| CIR (excl integration cost) | 36% |
42% |
-5% |
35% |
40% |
-5% |
| PERFORMANCE RATIOS |
|
|
|
|
|
|
| Return on equity (ROE) | 14% |
10% |
+4% |
15% |
8% |
+7% |
| Return on assets (ROA) | 0.9% |
0.8% |
+ 0.1% |
0.9% |
0.6% |
+0.3% |
(Figures in RM 'million unless otherwise stated) |
FY12 |
FY11 |
Change |
FY12 |
FY11 |
Change |
|---|---|---|---|---|---|---|
| FINANCING& DEPOSITS |
|
|
|
|
|
|
| Total assets | 21,902 |
20,313 |
+8% |
21,902 |
12,179 |
+80% |
| Gross financing | 12,395 |
11,194 |
+11% |
12,395 |
5,480 |
+126% |
| Customer deposits | 16,301 |
14,929 |
+9% |
16,301 |
9,226 |
+77% |
| Financing to deposits ratio | 76% |
75% |
+1% |
76% |
59% |
+17% |
| ASSET QUALITY |
|
|
|
|
|
|
| Gross impaired financing ratio | 1.8% |
2.8% |
-1.0% |
1.8% |
0.7% |
+1.1% |
| Net impaired financing ratio | 0.3% |
1.6% |
-1.3% |
0.3% |
0.7% |
-0.4% |
| Financing loss coverage | 163.9% |
103.6% |
+60.3% |
163.9% |
255.1% |
-91.2% |
| EQUITY & CAPITAL RATIOS |
|
|
|
|
|
|
| Shareholders' equity | 1,186 |
1,487 |
-20% |
1,186 |
866 |
+37% |
| Tier-1 capital adequacy ratio | 9.8% |
13.6% |
-3.8% |
9.8% |
16.1% |
-6.3% |
| Risk-weighted capital adequacy ratio | 13.5% |
17.6% |
-4.1% |
13.5% |
17.7% |
-4.2% |
Net Profit
The Bank recorded a Profit AfterTax of RM149.7 million for FY12, a growth of 25% on a Pro Forma Basis. This improved result arose from not only incremental income contributions from EONCAP Islamic Bank Berhad (“EIBB”), which was consolidated with HLISB effective 1 November 2011, but also increased financing and treasury activities coupled with an improvement in asset quality. Return on Equity (ROE) improved to15% in line with higher profitability.
Total Net Income
The Bank recorded a Total Net Income of RM340.5 million as at 30 June 2012, a growth of 12% on a Pro Forma Basis. HLISB's net income growth was derived from better all-round business performance brought about by an enlarged customer base and widened delivery channels arising out of the merger.
Financing Growth
Total Assets stood at RM21.9 billion as at 30 June 2012, a growth of 8% on a Pro Forma Basis, while Gross Financing expanded by 11% on a Pro Forma basis to RM12.4 billion. The financing growth was mainly driven by the consumer banking segment, particularly Mortgage-i which recorded a growth of RM1.4 billion or 34% on a Pro Forma Basis.
Credit Quality & Impairments
The merged Bank improved its asset quality levels with Net Impaired Financing Ratio at 0.3% as at 30 June 2012, amongst the lowest in the industry which has an average ratio of 1.4%. Financing Loss Coverage improved to163.9% in FY12.
Deposits, Liquidity & Capital
The Bank's deposit franchise stood at RM16.3 billion as at 30 June 2012, with the Financing to Deposit Ratio steady at 76%, reflecting the strong liquidity position of the merged entities.
The ratio of Current and Savings Accounts (CASA) deposits to total deposits further improved from 24% to 27% in FY12.
Risk Weighted Capital Adequacy Ratio (RWCR) remained strong at 13.5% post-merger, well above the minimum requirement of 8%. During the year the Bank had also increased its issued and paid-up capital from RM500 million to RM700 million via an issuance of shares to Hong Leong Bank Berhad. This has strengthened the common equity capital base of the Bank.
Integration Updates
HLISB's merger with EONCAP Islamic Bank Berhad (EIBB) in November 2011 - historic for being the first Islamic bank merger in Malaysia - has transformed the Bank into a larger and stronger Islamic banking franchise in terms of assets, financing and deposits.
The Single Platform Day 1 exercise to integrate the two banking technology systems was successfully delivered on 5 May 2012.
Business Outlook
The business outlook in general, and the Islamic Banking industry in particular, remains positive for our business in Malaysia despite a weakened global economic environment. As such, HLISB is optimistic to continue to build on the merged entity and grow its business franchise across all business portfolios to produce long term value creation.
-END-
Press Release - 28/08/2012
