Hong Leong Finance (HLF) posted a net profit of S$62.7 million for the year ended 31 Dec 2025, down 39.7 per cent year-on-year, as a sharp contraction in net interest margins outweighed stronger fee income and disciplined cost control.

The finance company’s total interest income and hiring charges – its primary revenue line – slipped 25.0 per cent to S$444.7 million. Profit before tax declined 39.5 per cent to S$75.5 million, while basic earnings per share fell to 13.97 Singapore cents from 23.20 cents a year earlier.

HLF’s board has proposed a final cash dividend of 6.15 cents per share, to be paid on 21 May 2026 to shareholders on the register as at 5 May 2026. Together with the interim payout of 2.75 cents distributed on 5 Sep 2025, total dividends for FY 2025 amount to 8.90 cents, compared with 13.75 cents in FY 2024.

Net interest income contracted 25.1 per cent to S$168.6 million as the 25.0 per cent slide in interest income outweighed a similar 25.0 per cent reduction in funding costs. Fee and commission income, however, surged 81.3 per cent to S$14.7 million, supported by stronger property-related financing activities.

Operating expenses inched up 3.1 per cent to S$112.2 million, reflecting higher depreciation from new IT infrastructure and ongoing transformation initiatives, though staff costs were largely flat. Expected credit losses saw a net write-back of S$4.3 million, helped by refined risk parameters and a low non-performing loan ratio of 0.4 per cent.

Total net loans and advances rose 3.7 per cent to S$12.10 billion, underpinning earnings amid margin pressure. Customer deposits were stable at S$12.30 billion, allowing the group to maintain a capital adequacy ratio of 16.1 per cent, comfortably above regulatory minima.

HLF highlighted continued investment in digital initiatives, including the public rollout of its “HLF Digital” platform and the opening of a next-generation branch at Punggol Coast Mall featuring enhanced customer-facing technology. Management said these projects aim to deepen customer engagement and diversify revenue through fee-based services.

Looking ahead, the company expects interest-rate volatility and geopolitical risks to keep margins tight in 2026. It plans to prioritise balance-sheet optimisation, sustain prudent credit underwriting and expand support for small- and medium-sized enterprises, while leveraging its strengthened digital capabilities to capture growth opportunities.