Hong Leong Finance

[pianist]

finance company does not cross over singapore border.?

[freedom]

I am new to financial industrial.

The are myth saying that finance companies are less protected (for depositors) vs bank. Not sure it is true.

Does finance companies need to comply with the tiered Capital Adequacy Ratio (CAR) imposed by MAS?

for capital ratio, from finance companies act:

Capital ratio
7A.
—(1) The Authority may require every finance company to maintain capital funds in Singapore in proportion to its total assets or to every category of assets at such ratio or ratios as may from time to time be determined by the Authority by notice in writing.
[27/94]
(2) A finance company shall maintain a capital adequacy ratio of not less than 12% or such other percentage as may be determined by the Authority from time to time, as calculated in accordance with such form, content and manner as may be determined by the Authority by notice in writing.
[27/94]
(3) The Authority may suspend or restrict the operations of a finance company which fails to comply with subsection (2) or any requirement of the Authority under subsection (1).

[CityFarmer]

I am new to financial industrial.

The are myth saying that finance companies are less protected (for depositors) vs bank. Not sure it is true.

Does finance companies need to comply with the tiered Capital Adequacy Ratio (CAR) imposed by MAS?

for capital ratio, from finance companies act:

Capital ratio
7A.
—(1) The Authority may require every finance company to maintain capital funds in Singapore in proportion to its total assets or to every category of assets at such ratio or ratios as may from time to time be determined by the Authority by notice in writing.
[27/94]
(2) A finance company shall maintain a capital adequacy ratio of not less than 12% or such other percentage as may be determined by the Authority from time to time, as calculated in accordance with such form, content and manner as may be determined by the Authority by notice in writing.
[27/94]
(3) The Authority may suspend or restrict the operations of a finance company which fails to comply with subsection (2) or any requirement of the Authority under subsection (1).

It seem that the CAR requirement for finance company is higher than bank. IIRC bank CAR requirement is 6-10% on either tier or total.

So the myth of finance company is more risky than bank is busted

[kayhian]

HONG Leong Finance posted a first-quarter net profit of $15.3 million, down 8.9 per cent from the same period a year ago.

Net interest income and hiring charges at Singapore's largest finance company also fell by 7.5 per cent to $36.5 million, as a result of a reduction in the lending spread.

Fee and commission income, however, rose 17.2 per cent to $3.4 million, mainly due to higher fee income from some lending products and from corporate advisory services.

Total profits from operations, before allowances, slipped 1.43 per cent over the previous corresponding period to $18.3 million.

[greengiraffe]

Fixed income benefiting from WALL of Money. Tough business in the face of stiff competition from local and foreign banks.

HONG Leong Finance posted a first-quarter net profit of $15.3 million, down 8.9 per cent from the same period a year ago.

Net interest income and hiring charges at Singapore's largest finance company also fell by 7.5 per cent to $36.5 million, as a result of a reduction in the lending spread.

Fee and commission income, however, rose 17.2 per cent to $3.4 million, mainly due to higher fee income from some lending products and from corporate advisory services.

Total profits from operations, before allowances, slipped 1.43 per cent over the previous corresponding period to $18.3 million.

[Musicwhiz]

The Straits Times
www.straitstimes.com
Published on Apr 24, 2013
Companies
Hong Leong's profits slide 8.9%

HONG Leong Finance posted a first-quarter net profit of $15.3 million, down 8.9 per cent from the same period a year earlier.

Net interest income and hiring charges at Singapore's largest finance company also fell by 7.5 per cent to $36.5 million, as a result of a reduction in the lending spread.

Fee and commission income, however, rose 17.2 per cent to $3.4 million, mainly owing to higher fee income from some lending products and from corporate advisory services.

Total profits from operations, before allowances, slipped 14.3 per cent over the previous corresponding period to $18.3 million.

Net loan assets, which include hire purchase receivables, were up 13.7 per cent from the same period the year before to $9 billion.

Deposits and balances shot up 19.6 per cent to $10.04 billion year on year, but were down slightly from the previous quarter's $10.05 billion.

Interest expenses were up 52.4 per cent over the same period last year to $25.9 million, owing to higher interest payable on deposits resulting from a combination of higher prevailing interest rates and a larger deposits base.

Hong Leong said it is facing pressures such as the continuing difficulties in the euro zone, the tightening labour market and rising wages in Singapore.

It will continue to target small and medium-sized enterprises and developers.

Demand for car and housing loans will continue to slacken as a result of regulatory measures introduced to cool both markets, the company said.

It added it will "focus on other platforms relevant to the customer and his business, like medical and other equipment financing".

Net asset value per share was $3.72, up from $3.68 as of Dec 31 last year. Annualised earnings per share came to 13.82 cents, down from 15.2 cents in the corresponding period last year.

Hong Leong Finance shares fell two cents to $2.77 yesterday. The results were released after the market closed.

CHIA YAN MIN

[freedom]

higher risk taking, but continuing declining net interest margin.

seems a tough period for finance companies in Singapore.

[cfa]

How to compete with the banks ?

[felixleong]

Ya now is a tough period
Car loans are difficult
Housing loans will become more difficult too

[kayhian]

Hong Leong Finance 1Q13 Net Profit Down 8.9%
Hong Leong Finance, Singapore’s largest finance company reported an 8.9 percent drop in 1Q13 net profit to $15.3 million, from $16.7 million a year ago. Net interest income and hiring charges fell 7.5 percent to $36.5 million from $39.5 million in the same period the previous year. Pricing for lending products remained under pressure, although this was mitigated by growth in loan book. Recent policy measures to cool the private residential property and car markets have already hit the volume of sales, and hence the demand for loans. The group said: “The demand for housing loans (other than HDB Home Loans) and car financing will continue to slacken, and the company will focus more on other platforms which are relevant to the customer and his business, like medical and other equipment financing.”

Significance: The group’s net asset value per share rose to $3.72, up from $3.68 as at December 2012. Annualised basic earnings per share fell to 13.82 cents from 15.20 cents in the same quarter last year. Hong Leong Finance’s share price is unchanged today from yesterday’s close of $2.77, as at 12pm.