Hong Leong stock nears targets as margin pressure tests returns
Published on 11/11/2026 at 00:19 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWSHong Leong Bank advances transformation
- Hong Leong Bank has met or is nearing four of five targets from its transformation plan, according to The Edge Malaysia.
- Return on equity remains the main gap, while narrower net interest margins could limit further progress.
- The bank is also exploring deeper growth in Malaysia's Malay market and expects a smaller stake in Bank of Chengdu.
Hong Leong Bank is nearing most of the financial targets set three years ago for its transformation plan, but pressure on net interest margins is keeping return on equity below the group's goal. The Edge Malaysia published the assessment on Tuesday, November 10, based on a report dated November 7.
Four targets within reach
The bank set a three- to five-year plan aimed at becoming Malaysia's best-run bank across five financial measures. After three years, the cost-to-income ratio, current account and savings account ratio, non-interest income ratio and credit charge had either met or were close to their targets.
Return on equity remains the unresolved measure. The Edge reported that stronger non-interest income and a higher CASA ratio may not be enough to lift profitability if the net interest margin continues to narrow. That spread reflects the difference between interest earned on loans and interest paid on deposits.
New growth alongside China review
Group managing director and CEO Kevin Lam told The Edge that Hong Leong Bank has identified deeper penetration of Malaysia's Malay market as a new growth opportunity. The bank also expects to sell a smaller stake in Bank of Chengdu than previously indicated, as slower growth at the associate and stronger expansion in its core business reduce concern about the associate's contribution to group earnings.
Hong Leong Bank's regional model
Hong Leong Bank Berhad is a Malaysia-based regional financial services company headquartered in Kuala Lumpur. Its operations span Malaysia, Singapore, Hong Kong, Vietnam, Cambodia and China, with retail, commercial, SME, Islamic and digital banking activities supported by branch and electronic-service networks. The bank describes itself as Malaysia's fifth-largest banking group by assets and a technology-focused institution within the wider Hong Leong Group.
Hong Leong Bank at a glance
- Company: Hong Leong Bank Berhad
- Headquarters: Kuala Lumpur, Malaysia
- Business: Regional financial services and banking
- Regional presence: Malaysia, Singapore, Hong Kong, Vietnam, Cambodia and China
- Transformation focus: Cost-to-income ratio, CASA ratio, non-interest income ratio, credit charge and return on equity
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