28/08/2025

BIZ & FINANCE THURSDAY | AUG 28, 2025

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No sharp decline in asset quality: Hong Leong Bank

Ű BY HAYATUN RAZAK sunbiz@thesundaily.com

KUALA LUMPUR: Hong Leong Bank Bhd is confident its asset quality will stay within guided range for FY2026 despite heightened risk environment from global trade and rate uncertainties. Group managing director and CEO Kevin Lam said while defaults could edge higher, the bank does not expect a sharp deterioration. “I wouldn’t exaggerate the risk, but default rates are more likely to rise than fall going forward. This is a period of dislocation and adjustment, a heightened risk environment compared to when conditions were more benign,” he told reporters at Hong Leong’s full year (FY25) financial results briefing yesterday. He said the outlook depends on where the China–US tariff rates eventually land, as well as the extent of US Federal Reserve rate cuts in the coming months and how Malaysia responds. “These are very big global macro factors affecting us, and they reinforce that this is a heightened risk environment,” Lam said. For FY26, Hong Leong Bank is guiding for loan growth of 6–7%, a net interest margin of 1.80–1.90%, and a return on equity of 11.5–12%, while maintaining its gross impaired loan ratio below 0.65% and credit cost under 10 bps. The bank also targets a cost-to-income ratio at or below 39% and a CASA mix above 32%. Hong Leong Bank Bhd recorded a 5.28% higher net profit for the fourth quarter ended June 30, 2025 at RM1.09 billion, compared with RM1.03 billion a year ago on higher net interest income, stronger Islamic banking contributions and improved fee-based income. Net interest income grew 4.16% to RM1.02

o But default rates likely to rise in ‘period of dislocation and adjustment’ billion from RM981.1 million, while Islamic banking income surged 16.43% to RM302.6 million and other operating income rose 25.45% to RM295.7 million. The group posted revenue of RM1.62 billion for the quarter, compared with RM1.48 billion a year ago on higher net interest income (NII) and stronger non-interest income (NOII). Additionally, Islamic banking income contributed positively, rising to RM303 million from RM260 million a year earlier. The bank declared a final dividend of 68 sen per share, bringing the total payout for FY2025 to 96 sen per share, an increase of 28 sen compared with last year’s 68 sen dividend. For FY2025, net profit increased 1.84% to RM4.27 billion from RM4.20 billion a year ago. Net interest income was 4.34% higher at RM3.99 billion while other operating income surged 29.83% to RM1.25 billion. Hong Leong Bank’s net interest margin was up four basis points to 1.90% in FY2025

Lam and Hong Leong Bank chief financial officer Malkit Singh at the briefing.

In terms of asset quality, gross impaired loans came in at 0.54%, while loan impairment coverage was 96.8% at end-June this year. Hong Leong Bank’s common equity tier 1 capital (CET1) stood at 13.2%.

from the same period a year ago. Current account saving account (Casa) grew 9.6% year-on-year to RM78.5 billion, while gross loans and financing rose 7.8% year-on-year to RM210.1 billion.

Sime Darby reports RM2 billion in net profit for FY2025

PETALING JAYA: Sime Darby Bhd reported a full year net profit of RM2.06 billion for the group’s financial year ended June 30, 2025 (FY2025). While lower than FY2024’s full year net profit due to the absence of a one-off RM2 billion gain from the sale of the Group’s healthcare business, the results reflect the group’s ability to sustain profitability despite challenging market conditions. Net profit from the group’s continuing operations increased by 63% to RM2.05 billion. This was largely due to the inclusion of Sime UMW’s full year results and a gain from the disposal of MVV land. Excluding one-off items, the group reported a core net profit of RM1.17 billion for FY2025. In a statement, the group said its revenue rose by 4.4% to RM70.1 billion in FY2025, as compared to RM67.1 billion in FY2024. “This has been a rather challenging year, with multiple headwinds across key markets. In China, we are dealing with slower growth and tougher competition in the automotive sector. On the bright side, EV sales have been on a rise in Singapore, benefitting its number one EV brand, BYD, which we represent. Tractors Malaysia which retails and maintains Caterpillar industrial

results for the quarter saw a 6.5% increase in PBIT to RM425 million as a result of higher contributions from the Southeast Asian operations. Meanwhile profit from the Australasian unit remained relatively consistent as the corresponding period last year. The Motors division’s PBIT for the quarter was similar to the previous year, as absence of dividend income and lower profit from Malaysia were offset by the one-off provisions and impairments in the previous corresponding quarter. UMW division proved to be a strong contributor to the group, with PBIT surging 63% to RM279 million. “The seven years since the demerger have seen the group deliver steady growth. With the business environment now more challenging, we have taken proactive steps to optimise inventory, reduce costs, streamline operations, improve operating cash flow and strengthen our balance sheet. While there continue to be headwinds, we are in a solid position to maintain our strong market position and drive sustainable growth of the Group,” said Jeffri Salim. Sime Darby declared a second interim dividend of 10 sen per share for Q4 FY2025. This brings the total dividend pay-out for FY2025 to 14 sen a share or RM954 million.

equipment has delivered improved profitability, driven by higher parts sales with better margins and data centre projects,” said Sime Group CEO Datuk Jeffri Salim Davidson. Although the Industrial Australasia operations have been impacted by a parts price reduction and a weaker Australian dollar this year, he added it is still the division’s biggest contributor and is well positioned to benefit from Australia’s growing resources industry. With Sime UMW, he said they have been able to tap into the strength of the two leading automotive brands in Malaysia; Perodua and Toyota. “Despite tough market conditions, our performance has remained stable, demonstrating the resilience of our portfolio and the strength in our geographical diversity,”said Jeffri Salim. For the group’s fourth quarter ended June 30, 2025, net profit was RM763 million, a significant increase from the same quarter in the previous financial year. This was mainly due to a gain from the sale of MVV land, higher contributions from UMW and lower borrowing costs. Excluding one-off items, the group’s core net profit for the quarter was 13% lower at RM334 million. The Industrial division’s

iCAUR has opened its first global dealership in Shah Alam.

iCaur opens first dealership in Glenmarie SHAH ALAM: iCaur Malaysia has opened iCaur Glenmarie, the brand’s first dealership in the world. This milestone marks another significant step with the lifestyle of its owners.” Spanning 18,912 square

dealership not only in Malaysia but in the world, and setting the tone for a brand that appeals to individuality and self-expression – delivered through capable, tech-forward vehicles and a complementary ecosystem that encourages adventure every step of the way.” Absolute Motor managing director, Andy Yap said: “Offering unique designs and formidable engineering, our steadfast commitment to become the first iCaur dealership in Malaysia and the world represents our firm belief in the brand and in its promise of sustainable mobility that also resonates

feet, the iCaur Glenmarie flagship dealership is designed as a full-service lifestyle hub, catering to a vibrant ownership experience. By mid-September, iCaur Malaysia is expected to establish 18 sales points and nine full-fledged dealerships nationwide, with Absolute Motor also expanding its presence with additional outlets in the coming months. Slated to be launched on Sept 9 this year, the iCAUR 03 is estimated to be priced between RM145,000 and RM155,000.

forward for the young marque as it moves closer to the launch of its first model, the iCAUR 03 which is managed by Absolute Motor Sdn Bhd. “In under four months since our debut at the Malaysian Autoshow 2025, iCaur has stamped an indelible mark in Malaysia, delivering a simple yet profound message – ‘Born to Play’,” iCaur Malaysia vice-president Emily Lek said. “iCaur Glenmarie reflects that spirit, standing as the first