KUALA LUMPUR, May 31 ― Research firms have remained upbeat on Hong Leong Bank Bhd (HLB) as it continued to deliver stellar loan growth while keeping return on equity (ROE) lofty after recording higher net profit in the third quarter (Q3) of 2022.
They said HLB's results in Q3 ended March 31, 2022, which were announced yesterday, came within their expectations.
HLB's net profit in Q3 2022 increased marginally to RM784.79 million from RM774.46 million in Q3 2021, thanks to a higher share of profit from its subsidiaries, among others.
Revenue stood at RM1.35 billion during the quarter under review compared with RM1.39 billion previously.
Kenanga Investment Bank Bhd, in a note today, said in spite of the expansion of its books, the group’s gross impaired loan (GIL) improvement and credit cost readings remain exemplary.
“We believe HLB is suitable for defensive-oriented investors. The group’s better than pre-pandemic GIL ratio provides the group solid buffers if we were to expect macro factors to gradually worsen,” the firm said.
Kenanga maintains its ‘outperform’ call with a target price of RM22.85 per share.
Meanwhile, RHB Investment Bank Bhd stays with its 'buy’ call with a new target price of RM23.70 from RM23.5 as its nine-month results were broadly in line, supported by healthy net interest income growth, lower credit costs, and strong contributions from Bank of Chengdu.
“HLB remains on track to its FY22 targets as business momentum is regaining pace after a softer Q3FY22. It is one of our top picks for Malaysian banks, given its solid fundamentals, healthy loan growth, and digital initiatives,” it said.
At 10.32am, HLB's shares flat at RM21.12 with 43,700 units traded. ― Bernama
