May 11 (Bloomberg) -- Hong Leong Bank Bhd. rose to a record in Kuala Lumpur trading after reporting a 27 percent leap in third-quarter earnings and analysts upgraded their forecasts to reflect higher future profits following its 5.06 billion-ringgit ($1.7 billion) takeover EON Capital Bhd.

The stock climbed 3.8 percent to 11.94 ringgit at 10:53 a.m. local time, bringing its total gains for the week to 14 percent since completing its EON takeover on May 6. Hong Leong Financial Group Bhd., its parent, has surged 11 percent this week, adding 3.2 percent today to 11.50 ringgit.

Hong Leong Bank's net income climbed to 289.7 million ringgit, or 19.95 sen per share, in the three months through March from 228 million ringgit, or 15.73 sen a year ago, the Kuala Lumpur-based lender said in an exchange filing late yesterday. Earnings were bolstered by higher net interest income as Malaysia's economy continues to expand, it said.

"The economic environment remains conducive to growth," Chief Executive Officer Yvonne Chia said in the statement. "We fully expect Hong Leong Bank's growth momentum to continue."

The merged group will have combined assets of more than 140 billion ringgit, with a branch network of about 300 branches and 1,200 self-service terminals. The takeover, 17 months in the making, will see Hong Leong Bank overtake rival AMMB Holdings Bhd. and RHB Capital Bhd. in terms of market capitalization, according to data compiled by Bloomberg.

ECM Libra Capital Sdn. Bhd. upgraded Hong Leong Bank to "buy" from "hold" today, increasing its share estimate to 13.62 ringgit from 10.92 ringgit to reflect future EON earnings contributions, analyst Bernard Ching said in a report today.

EON Impact

"While the results are within expectations, we will be upgrading our estimates to incorporate the effect of the completion of EON Capital's assets and liabilities," Ching said in the report.

RHB Research Institute Sdn. raised its fair value to 14 ringgit from 12.70 ringgit, analyst David Chong wrote in a separate report today. UOB Kay-Hian Holdings, HwangDBS Vickers Research Sdn. and AmResearch Sdn. raised their forecasts earlier in the week.

Hong Leong Financial yesterday provided a 2.3 billion- ringgit bridging loan to Hong Leong Bank to boost its capital adequacy ratio pending completion of a planned rights issue.

Hong Leong Bank said in a separate statement that it plans to increase the size the rights offer to as much as 2.6 billion ringgit from 1.6 billion ringgit to strengthen its capital base and fund working capital.

Malaysia's economy is forecast by the government to grow as much as 6 percent this year following a 7.2 percent expansion last year, the most in a decade. The central bank raised its benchmark overnight policy rate by 0.25 percentage point to 3 percent on May 5 to fight inflation.