Hong Leong Bank said gains from artificial intelligence (AI) adoption in cost management contributed to improved efficiency, helping the lender post higher annual profit and declare a larger dividend.
For the year ended June 30, 2025, operating profit before allowances rose 14.2% year-on-year to RM3.92 billion.
Non-interest income climbed 33.4% to RM1.47 billion, lifting its contribution to 23% of total income.
Overall income increased 10.9% to RM6.4 billion, with net interest income up 5.5% at RM4.93 billion.
Operating expenses were contained at RM2.48 billion, lowering the cost-to-income ratio to 38.7%.
Profit before tax stood at RM5.36 billion, while profit after tax came in at RM4.27 billion.
On a normalised basis excluding one-off items, profit after tax was 4.3% higher at RM4.38 billion.
Gross loans and financing grew 7.8% to RM210.1 billion, supported by mortgages, auto loans, SME financing and overseas operations.
Domestic loan growth of 8% outpaced the industry’s 5.2%. Asset quality remained steady with a gross impaired loan ratio of 0.54%.
Customer deposits expanded 8.4% to RM238.9 billion, with current and savings account balances up 9.6% to RM78.5 billion.
The bank maintained a liquidity coverage ratio of 131.6% for the quarter, comfortably above regulatory requirements.
The board declared a final dividend of 68 sen per share, bringing the full-year payout to 96 sen compared with 68 sen last year. That lifted the payout ratio to 46.6%, from 33.6% previously.
As part of its Digital Bank Plus Much More strategy, HLB marked a milestone in its branch transformation with new flagship outlets in Old Klang Road, Cheras and Kota Damansara, along with a renewed branch in Melaka.
The branches are designed as hybrid spaces that combine digital capabilities with in-person advisory services, featuring tools such as tablet-based onboarding for SMEs and support for opening foreign currency accounts.
At a press briefing, Chief Financial Officer Malkit Singh said cost savings have so far come from deploying “Sophia,” an AI agent in collections, which improved efficiency without increasing headcount.
Similar tools are being extended to call centres, allowing relationship managers to serve more customers, while AI-assisted coding has cut development work by an estimated 10% to 25%.
Chief Information and Technology Officer William Streitberg added that Hong Leong Bank has identified 38 AI use cases to roll out this year, with another 100 under review through its internal “AI Ignite” programme.
Kevin Lam said the bank remains focused on strengthening its digital capabilities and supporting customers through a challenging environment.
He added that the strategy is reinforced by partnerships with China’s WeBank and Swiss private bank Lombard Odier.
Featured image: Edited by Fintech News Malaysia, based on image by kues1 via Freepik
