Public Bank records higher net profit of RM1.41b in Q1 FY19

Public Bank founder and chairman Tan Sri Teh Hong Piow said the FY17 financial results were yet another milestone with pre-tax profit of RM7.12bil.

KUALA LUMPUR: Public Bank Bhd posted slightly higher net profit in the first quarter ended March 31, 2019 mainly due to lower loan impairment allowance and higher investment income when compared with a year ago.

It said on Monday its net profit rose by 0.35% to RM1.41bil from RM1.405bil a year ago. Pre-tax profit rose by 1.4% to RM1.820bil versus RM1.794bil.Its revenue increased by 4.1% to RM5.567bil from RM5.349bil.  Earnings per share were 36.32 sen compared with 36.39 sen.

“The Public Bank group’s consistent profitability was mainly contributed by the group’s healthy loan and deposit growth, coupled with its sustained strong asset quality,” said Tan Sri Teh Hong Piow, the founder, chairman emeritus, director and adviser.

He said despite the increasingly challenging banking landscape, the Group achieved 4.8% annualised growth in its total domestic loans and 4.9% annualised domestic deposit growth in the first quarter of 2019. 

“When the operating environment was still clouded by rising headwinds and persistent uncertainties, the Public Bank Group was able to sustain its performance. 

“With the stable performance in the first quarter of 2019, the group continued to sustain its leading position as the most cost efficient Malaysian bank with the best asset quality. 

“This is clearly reflected in the group’s high net return-on-equity of 14.0%, efficient cost-to-income ratio of 33.8% and lowest gross impaired loan ratio of 0.5%,” Teh said. 

Public Bank said the higher earnings in Q1 FY19 was mainly due to lower loan impairment allowance of RM71.7mil and higher investment income of RM38.1mil (192.3%). 

These were partially offset by lower net fee and commission income of RM37mil (-8.1%) which were mainly due to lower unit trust management related fee income, lower foreign exchange income of RM33.8mil (-35.5%) and higher operating overheads of RM25.6mil (2.8%).

Public Bank said other comprehensive income (net) was RM55.2mil as compared to other comprehensive loss (net) of RM167.4mil a year ago, which was mainly due to the gain on revaluation of financial investments and lower foreign currency translation loss in respect of foreign operations, offset by loss on cash flows hedges.

“The group’s profit continued to be supported by healthy loans and customer deposits growth coupled with stable asset
quality,” it said. 

Gross loans grew by RM13.6bil or 4.4% to RM320.4bil as at March 31, 2019 as compared to RM306.8bil as at March 31, 2018, mainly driven by growth in property financing and corporate lending. Total deposits from customers increased by 5.2% or RM17.1bil to RM343.0bil as at March 31, 2019. 

Public Bank group's gross impaired loan ratio continued to remain stable at 0.5% due to its consistent adoption of stringent credit underwriting and proactive recovery processes.

When compared with the preceding quarter ended Dec 31, 2019, its pre-tax profit rose by 1.7% to RM1.819bil from RM1.789bil. 

The higher pre-tax profit was mainly due to higher investment income, higher foreign exchange income and net writeback of loan impairment allowance. These were partially offset by higher operating overheads, lower fee income and lower net interest income on shorter interest accrual period. 

Its net profit increased by 0.3% to RM1.410bil over the same period. Headline inflation is expected to be broadly stable at 0.7% – 1.7% in 2019 (2018: 1.0%), as domestic cost factors are offset by the implementation of price ceilings on domestic retail fuel prices.