Hong Leong Finance's Profit Rises 39% To $133m

Source : The Straits Times, Feb 18, 2008

Growth in interest income and hiring charges boosts full-year results

HONG Leong Finance, Singapore's largest finance company, had a sparkling year, with earnings for the 12 months ended Dec 31 last year up 38.7 per cent at $133.4 million.

STERLING YEAR: Hong Leong Finance, in capitalising on strong economic conditions last year, intensified its services to SME markets and heartlanders. These areas, in turn, contributed greater depth to its customer base. The company is proposing a final dividend of eight cents per share, which will bring the year's total payout to 26 cents.

The company, which focuses on offering loans and other financial services to small and medium-sized enterprises (SMEs) and heartlanders, saw its interest income and hiring charges rise 20.4 per cent to $362.7 million.

For the year, earnings per share reached 30.42 cents, up from 22.04 cents a year ago, but net asset value per share slipped from $3.19 to $3.17.

It is proposing a final dividend of eight cents per share, which will bring the year's payout to 26 cents.

The company's net loan assets, including hire purchase receivables, reached $8.1 billion at the end of the year. This compares with $6.06 billion as at Dec 31, 2006 and $7.53 billion as at Sept 30 last year.

There was strong growth in the deposits and savings accounts of its customers.

Capitalising on strong economic conditions, Hong Leong Finance intensified its services to SME markets and heartlanders that, in turn, contributed greater depth to its customer base, said chairman Kwek Leng Beng.

Last year, the company built new dealer relationships in the competitive motor vehicle financing market and was active in assisting small and medium-sized developers.

The final quarter of last year saw some slowdown in activity due primarily to the United States sub-prime crisis, rising oil price and concerns about the political situation in the Middle East. But the fundamentals for the domestic market remain bright, it said.

Still, Hong Leong Finance is adopting a 'more cautious' outlook for the Singapore economy this year in view of adverse external factors, said Mr Kwek.

He said the group was looking to enhance its scope of activities to increase fee income. It plans to distribute an expanded range of insurance and annuity products to further enhance its wealth management portfolio.

'With the two integrated resorts well into the construction phase, we will also be focusing on a range of capital-intensive industries to grow our equipment financing and cash flow financing business.'

Shares of Hong Leong Finance closed four cents higher at $3.70 last Friday.