Public Bank Bhd has posted a record net profit of slightly more than RM1bil for its financial year ended Dec 31, 2003, on strong growth in loans to small- and medium-sized enterprises (SMEs) and consumers.
Earnings per share for the year rose to 16.5 sen from 13.3 sen in 2002, while revenue increased to RM4.32bil from RM4.05bil.
Group profit before tax improved to RM1.46bil from RM1.24bil.
final dividend of 11 sen per share less tax, amounting to RM503mil, has been declared – the highest payout by the group to date.
“The improved revenue and profit were due to higher net interest income and financing income as a result of sustained increased lending business, strong growth in deposits, increasing shift to a lower cost customer deposit funding structure and higher fee income,'' Public Bank chairman Tan Sri Teh Hong Piow said in a statement yesterday.
Teh said the group's full-year results, which marked the first time net profit crossed the RM1bil mark, also received a lift from Public Finance's earnings, which were fully attributable to the bank following the privatisation of the finance company in June 2003.
Loans grew by 22% last year, which was more than four times the industry average. Total gross loans increased by RM8bil to RM47bil.
“The group’s sustained strong loans growth was achieved as a result of innovative product packaging and pro-active product enhancement as well as improved loan service delivery standards, including fast approval turnaround time and efficient documentation and disbursement processes,'' Teh said.
Last year, 89% of the group's loans and advances, amounting to RM42bil, were funnelled into financing the retail sector, in particular SMEs, and the purchase of residential properties and passenger vehicles.
Loans to SMEs increased by 14% to RM11bil at end-2003.
The group's non-performing loan ratio fell to 2% from 2.4%.
Savings deposits increased by 19% to RM10bil while demand deposits grew by 16% to RM7bil.
The group's loans-to-deposit ratio was 91%.
Apart from the bank, all of the group's operations reported higher pre-tax profits. The pre-tax profit of Public Finance improved by 19% to RM440mil and its overseas operations, based predominantly in Hong Kong, registered a 25% rise in pre-tax profit to RM182mil.
Public Mutual, the group's unit trust and asset management company, posted a 25% increase in pre-tax profit to RM55mil. The net asset value of unit trusts under management of Public Mutual expanded by RM2.4bil or 41% to RM8.2bil last year. Public Mutual now manages 29% of the total funds in the country's private sector unit trust industry.
Teh said the healthy growth of Malaysia's and global economies augur well for the bank although lending interest margins would continue to come under pressure due to competition.
He said Public Bank was expected to continue performing satisfactorily this year.
Public Bank's senior general manager of treasury and corporate operations, Leong Kwok Nyem, said loan growth for 2004, given the momentum built up over the past year, should record a good double-digit number.
“A good mid-teens in very much on the cards,'' he said.
Leong said the 250 branches that Public Bank intended to have following its rationalisation programme after the privatisation of Public Finance was an optimum number for the group.
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