KUALA LUMPUR: Hong Leong Bank Bhd recorded lower earnings of RM224.75 million for its second quarter ended Dec 31, 2009, down 12.6% from RM257.43 million a year ago, weighed down by lower net interest income, lower non-interest income and higher other operating expenses.

It said today pre-tax profit fell 14.4% to RM291.28 million from RM340.09 million. Revenue was RM519.40 million compared with RM564.21 million. Earnings per share were 15.51 sen versus 17.77 sen.

"The decrease [in pre-tax profit] was due to lower net interest income by RM17.2 million, lower non-interest income by RM37.2 million and higher other operating expenses by RM21.2 million.

"This is however mitigated by a  higher share of profit from Bank of Chengdu by RM8.3 million, higher net income from the Islamic banking business by RM9.6 million and an impairment writeback of RM6.1 million," it said.

Hong Leong Bank said it continues to be cautiously optimistic about the economic outlook for the rest of the year.

"We see signs that the Malaysian economy will regain its vibrancy in the second half of the financial year 2010 and consider ourselves well-positioned to take advantage of this upside potential. The Group will continue to focus on its core businesses emphasizing efficiency and optimal returns on client relationships," it said.

As for the first half, net profit was RM458.96 million, down 8.1% from RM499.47 million while pre-tax profit also slipped to RM580.11 million from RM655.97 million. The decrease was due to lower net interest income by RM39.4 million, lower non-interest income by RM58.1 million, higher allowances for losses on loans, advances and financing by RM29.1 million and higher other operating expenses by RM14.1 million.

Hong Leong Bank said this was however mitigated by higher share of profit from Bank of Chengdu by RM11.3 million, impairment writeback of RM6.1 million as opposed to impairment charges of RM33.2 million in the previous financial year-to-date and higher net income from the Islamic banking business by RM14.2 million.