Hong Leong Bank first-half showing improves

KUALA LUMPUR: Artificial intelligence (AI) has been able to improve productivity in some parts of Hong Leong Bank Bhd (HLB), making it a complementary force rather than competition, says group managing director and chief executive officer Kevin Lam.

According to Lam, using AI in areas like telemarketing and chatbots have helped speed up processes and increase efficiency in daily workloads.

“We’re seeing it in various other parts of the bank as well.

“For instance, a person who handles accounts.

“Typically, there’s only so much one person can handle but now with AI, it’s like having your own personal assistant, especially in administrative work or taking notes,” he said at the bank’s results briefing.

This has helped improve the account loading ratio as well. Lam said if applied in the right areas, AI has plenty of potential.

When asked if AI would be a catalyst to downsizing its workforce, Lam said the bank does not see this happening now or in the future.

“We do not foresee reducing our income or making staff redundant as a result of AI.

“We have approximately slightly under 10,000 staff across Hong Leong Financial Group Bhd, and we are working at retraining and future-proofing the people we have,” he said.

He added that while the bank has seen improvements, particularly in its cost-to-income ratio, the use of AI has helped to deliver faster-than-expected results but there will be no laying off employees.

Meanwhile, in the second quarter of financial year 2025 (2Q25), HLB posted a net profit of RM1.15bil, up from RM1.09bil, and revenue of RM1.63bil compared to RM1.46bil in 2Q24.

The board of directors declared an interim dividend of 28 sen per share, with an entitlement date of March 13, 2025, and payable on March 26, 2025.

The bank recorded a 5.7% increase year-on-year (y-o-y) in its net profit to RM2.24bil for the first half of financial year 2025 or 1H25.

Lam said the increase was on the back of robust loan and financing growth and strong asset quality coupled with prudent funding and liquidity positions.

He said its top-line performance was strong, whereby total income expanded 13% y-o-y to RM3.2bil, driven by higher contributions from both net interest income and non-interest income.

Net interest income grew 8.3% y-o-y underpinned by the expansion of its loan base coupled with a higher net interest margin of 1.91%, while non-interest income delivered a growth of 31.3% y-o-y.