Hong Leong Financial Group Bhd reported a modest improvement in 2QFY2026 earnings, supported by loan growth and cost discipline, despite margin compression and higher impairment charges. Net profit for the quarter rose 7% year-on-year to RM899.3 million. The group declared an interim dividend of 22 sen per share , up 10% from last year. For 1HFY2026, net profit increased 3.2% to RM1.74 billion. Key Financial Metrics 2QFY2026: Net profit: RM899.3 million (+7%) Revenue: RM1.92 billion (+3.2%) Interim dividend: 22 sen 1HFY2026: Net profit: RM1.74 billion (+3.2%) Revenue: RM3.86 billion Operational highlights: Gross loans growth: +8.2% YoY to RM215.7 billion Domestic loan growth: +8.3% (vs industry 4.9%) Net interest margin: 1.83% CASA growth: +12.1% to RM79.6 billion Cost-to-income ratio: improved to 35.9% Gross impaired loans ratio: 0.59% CET1 ratio: 12.6% Annualised ROE: 10.7% Book value per share: RM29.16 Money Master Take HLFG’s quarter reflects operational stability rather...
RHB Bank Delivers 9% Profit Growth, Lifts Dividend to 35 Sen — Steady Operator or Re-Rating Candidate?
RHB Bank Bhd reported a solid 4QFY2025, with net profit rising 8.5% year-on-year to RM905.7 million.
The bank declared a 35 sen dividend for the quarter, bringing total FY2025 dividends to 50 sen per share, up from 43 sen previously.
Full-year net profit rose 7.8% to RM3.36 billion.
Quarterly Highlights
4QFY2025:
Net profit: RM905.7 million (+8.5%)
Driven by lower provisions and stronger non-interest income
Dividend: 35 sen
FY2025:
Net profit: RM3.36 billion (+7.8%)
Net interest income: RM6.0 billion (+3.9%)
Net interest margin: 1.88%
Gross impaired loans ratio: improved to 1.41%
CET1 ratio: 15.2% (post-dividend)
Money Master Take
This is not a breakout quarter. It is a balance-sheet-quality quarter.
1. Provisions Did the Heavy Lifting
Profit growth was supported largely by:
Lower bad debt provisions
Better asset quality trends
Gross impaired loans improved to 1.41%, suggesting credit costs are contained.
When earnings expansion comes from lower provisions rather than loan acceleration, sustainability depends on credit stability continuing.
2. Margin Environment Remains Tight
Net interest margin stands at 1.88%.
Loan growth and funding optimisation helped, but:
NIM expansion is limited in a moderating rate cycle
Future upside depends more on volume than pricing
That makes execution on deposit gathering and loan growth critical under its PROGRESS27 plan.
3. Capital Strength Supports Dividend Story
CET1 at 15.2% provides:
Strong regulatory buffer
Dividend visibility
Capacity for growth without equity dilution
With total FY dividend at 50 sen, RHB reinforces its positioning as a yield-support name in the Malaysian banking sector.
4. PROGRESS27: Execution Phase Matters
Management targets by 2027:
12% return on equity
Cost-to-income ratio below 44.8%
Achieving that requires:
Domestic deposit expansion
Retail wealth growth
Cost discipline
This is a steady optimisation strategy, not a high-growth pivot.
Investor Positioning View
Short term:
Earnings stable
Dividend supportive
Asset quality improving
Medium term:
Re-rating depends on ROE improvement toward 12%
NIM trajectory remains key
RHB currently trades as a stable dividend bank, not a growth multiple story.
Bottom Line
9% quarterly profit growth backed by lower provisions.
Asset quality improved.
Dividend increased to 50 sen for FY2025.
Capital position remains strong.
The stock fits income-focused portfolios, but meaningful upside requires delivery on ROE expansion under PROGRESS27.
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