LPI founder and chairman Tan Sri Teh Hong Piow
KUALA LUMPUR: Public Bank Bhd
’s net profit grew 4.83% to RM1.39bil in the second quarter ended June 30, compared with RM1.33bil in the same period last year mainly due to higher net interest income, higher income from Islamic banking business, lower loan impairment allowance and higher net fee and commission income.
The bank’s revenue for the quarter rose to RM5.43bil, up 2.03% against RM5.16bil previously.
Public Bank declared a first interim dividend of 32 sen per share for the financial year ending Dec 31, amounting to RM1.24bil. The first interim dividend will be paid on Sept 19 based on the dividend entitlement date of Sept 7.
For the first half year ended June 30, Public Bank posted a pre-tax profit of RM3.55bil, a growth of 5.5% from the corresponding period in 2017. Net profit attributable to shareholders increased by 8.6% to RM2.8bil from RM2.57bil previously.
“The group was able to sustain good business momentum in the first half of 2018. The higher profit for the period was largely driven by growth in its loan and deposit business, with further impetus from a 4.9% growth in non-interest income,” founder and chairman Tan Sri Teh Hong Piow said in a statement.
“Sustained business strength continued to place the Group in a strong competitive position, with its net return on equity standing at 15.0%. Similarly, the group’s cost-to-income ratio of 33.1% and gross impaired loans ratio of 0.5% remained the best in the domestic banking industry,” he said.
In the first half of 2018, the banking group’s total gross loans rose by an annualised rate of 4.1% to RM310.7bil. On the domestic front, total loans grew at an annualised rate of 4.3% to RM288.3bil.
The group has continued to sustain its leading position in the financing business focusing on residential properties, and commercial lending to small and medium enterprises in the domestic banking industry.
Its total customer deposits grew at an annualised rate 6.7%, led by the resilient growth in domestic deposits which increased at an annualised rate of 7.4%
As at the end of June 2018, the group’s gross loan to fund and equity ratio stood at a healthy level of 79.4%.
In the first half of 2018, non-interest income increased by 4.9%, largely contributed by the group’s unit trust business as well as stable growth in its banking transactional fee income.
In the first half of 2018, Public Mutual, continued to deliver favourable result, with its pre-tax profit growing by 9.0% compared to the corresponding period in 2017.
As at end June 2018, Public Mutual managed a total of 144 unit trust funds, with a total net asset value of RM80.2bil.
Public Bank’s cost-to-income ratio remained stable at 33.1% in the first half of 2018, staying well below the banking industry’s average cost-to-income ratio of 44.8%, reflecting the group’s unwavering strong commitment to high operational efficiency.
“The Public Bank Group continued to sustain its strong asset quality with its gross impaired loans ratio staying low and stable at 0.5%, which remained the best when compared to the Malaysian banking industry’s gross impaired loans ratio of 1.6%,” Teh said in the statement.
Its loan loss coverage stood high at 117.3%. Including the regulatory reserves of RM2bil, the loan loss coverage was at 247.9%.
For the first half of 2018, overseas operations contributed 8.4% to the Public Bank’s pre-tax profit, led by businesses in Public Financial Holdings Limited Group in Hong Kong and Cambodia Public Bank Plc.
As at the end of June 2018, the Public Bank Group’s common equity Tier 1 capital ratio, Tier 1 capital ratio and total capital ratio were at 12.7%, 13.4% and 16.3% respectively.
Commenting on its prospects, Teh said: “The Public Bank group will continue to ride on the growing economy to strengthen its banking business along its organic growth strategy.
“The group’s resilient fundamentals, consistent financial performance, agility to market changes and strong customer service culture will continue to be the essential qualities in driving the sustainability of the group’s business, for the interests of all its stakeholders.”
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