Tan Sri Teh Hong Piow
KUALA LUMPUR: Public Bank Group aims to sustain continued profitability through its organic growth strategy in the core retail business for the financial year 2017.
Public Bank Bhd
founder and chairman Tan Sri Dr Teh Hong Piow said this was also premised on the group's strong fundamentals and market position.
“The Group aims for its loan growth to be broadly in line with market trend and achieve slightly ahead of industry growth.
“Asset quality will continue to be a key strength to focus on with the target of gross impaired loans ratio sustaining at less than 1% for 2017,” he told Bernama.
The Group, Teh pointed out, remained committed to sustaining its prudent cost management practice, with a cost to income ratio target of 33% to 34%.
“Interest margins for the year are expected to remain under pressure amid the ongoing intense competition for loans and deposits growth, and increased cost of funds.
"Nevertheless, the Group will continue to work harder to increase business volumes to cushion the compression of margin,” he said.
Teh said the operating environment and competitive banking landscape are the major challenges facing the Public Bank Group.
“The Group will stay focused on the pursuit of achieving its financial targets. It will also remain committed to strengthening competitive advantage in operational efficiency and superior customer service to stay ahead of the curve,” he added.
According to Teh, increasing challenges, including rising prices and a weak ringgit, had been weighing on consumer and business sentiment, which in turn impacted the banking business growth.
“However, the overall Malaysian economy will remain on a positive trajectory despite the presence of headwinds, as domestic demand continues to be the impetus driving domestic economic activities,” he said.
Ongoing wage growth and stable labour market, Teh pointed out, continued to support domestic spending.
For the second quarter ended June 30, 2017, Public Bank's profit before tax improved to RM1.736 billion from RM1.551 billion.
Teh said the Group's financial strength was also attributed to its strong asset quality and efficient cost management, as reflected in its gross impaired loan ratio of 0.5% and cost-to-income ratio of 33.8% as at end-June 2017.
“The focus on financing for the purchase of residential properties, passenger vehicles and lending to small and medium enterprises, has remained a market niche for the Group, as it maintained a large market share in these lending segments despite the still challenging lending market.
“When rising costs continue to pose earnings pressure, the Group's long-embedded practices of good cost management has remained a competitive advantage in sustaining profitability,” he added. - Bernama
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