RAM Ratings has affirmed Hong Leong Financial Group Berhad's (HLFG or the Group) AA1/Stable/P1 corporate credit ratings (CCRs) and the AAA/Stable/P1 financial institution ratings (FIRs) of its banking subsidiaries, Hong Leong Bank Berhad (HLBB), Hong Leong Islamic Bank Berhad (HLISB) and Hong Leong Investment Bank Berhad (HLIB). All related issue ratings were also affirmed (Table 1). 

The affirmation is premised on HLFG's strong domestic retail and SME franchises and excellent risk profile. The one-notch differential between HLFG's long-term CCR and the subsidiaries' FIRs reflects structural subordination at the holding company level. HLBB is the Group's core subsidiary, with HLISB and HLIB supporting the Group's respective strategic Islamic and investment banking franchises, which underpin their ratings.

HLFG's asset quality remains among the strongest in the industry, with a gross impaired loan ratio of 0.59% as at end-December 2025, well below the industry average. In the absence of provision writebacks, credit costs normalised to 7 bps in 1H FY Jun 2026. Loan loss coverage (including regulatory reserves) stayed solid at 241% as at end-December 2025, providing a strong buffer against potential asset quality pressures. 

HLFG posted a resilient pre-tax profit of RM3.2 bil in 1H FY Jun 2026, underpinned by steady fee and investment income and disciplined cost controls, keeping its return on assets largely unchanged at 1.8% (annualised). While industry-wide margins were pressured by an overnight policy rate cut, sustained loan growth kept net interest income stable. Margins should see some reprieve as deposits gradually repriced downward in 2H FY Jun 2026. Profit contribution from Bank of Chengdu Co. Ltd moderated to RM683 mil (1H FY Jun 2025: RM775 mil), reflecting HLBB's reduced equity stake and a weaker renminbi. 

The Group's funding profile is supported by a strong retail deposit base, with individuals accounting for about half of total deposits as at