Steady earnings for Public Bank in Q3

  • Business
  • Wednesday, 23 Oct 2013

PETALING JAYA: Public Bank Bhd reported a steady set of earnings for the third quarter ended Sept 30, with net profit climbing 7.67% to RM1.05bil from RM972.66mil a year ago, thanks to better loan and fee-based income.

Malaysia’s third-largest lender by assets saw its topline rise 7.82% to RM3.87bil versus RM3.59bil previously, while earnings per share (EPS) stood at 29.9 sen from 27.77 sen, the notes to its accounts showed.

No dividends were declared for the third quarter, similar to last year.

Year-to-date, the financier’s net profit improved 6.82% to RM3.04bil against RM2.84bil during the same period in 2012, while revenue rose 8.8% to RM11.35bil compared with RM10.43bil.

EPS for the nine-month period stood at 86.78 sen versus 81.23 sen earlier.

Public Bank’s earnings were offset somewhat due to a higher loan impairment allowance by RM65.9mil and more costly operating expenses on the back of increased business volumes.

Its net interest income as at end-September came to RM4.16bil, up 6.12% year-on-year, compared with an 8.3% rise in net fee and commission income to RM941mil.

The bank booked impairments on loans, advances and financing of RM260.97bil up to September against RM195.08bil last year.

The mainly retail-focused lender saw its gross loans expand 12% to RM215.6bil on financing for property, passenger vehicles and small and medium enterprises (SMEs).

Domestic loans grew 12.1%, beating the industry average of 9.8%, while its SME loan book grew 20%. Retail loans made up 86% of its total loans.

Public Bank’s deposits jumped 13.2% to RM247.3bil, backed by a depositor base of five million customers.

Domestic deposits advanced 13.3%, ahead of the banking sector’s 8.1%. This gives it a loan-to-deposit ratio of 87.2%.

In terms of asset quality, the lender’s gross impaired loan ratio stayed low at 0.7% versus the industry average of 2%.

Loan loss coverage stood at 117.3%, well above the local average of 98.2%, while its credit charge was 0.17%. The group said it was well-capitalised with its common equity Tier-1 capital ratio, Tier-1 capital ratio and total capital ratio at 8.2%, 10.1% and 12.8%, respectively.

Public Bank’s return on equity remained the best among Malaysian banks at 22.4%. It was also the most efficient, with a cost-to-income ratio of 30.7% versus the industry’s 46.6%.

“With the continuous support of our valued customers, the Public Bank group continued to command market leadership in domestic lending for residential mortgages, commercial property financing and passenger vehicles financing with market shares of 19.6%, 33.8% and 26.4%, respectively,” founder and chairman Tan Sri Teh Hong Piow said in a statement.

“Our strategies remain unchanged. The Public Bank group will continue to focus on its core retail banking and financing business, as well as upholding strong corporate governance to support long-term sustainable growth.

“The group will continue to leverage on its strong PB brand and its wide and efficient branch network, as well as its excellent customer service to deliver sustainable revenue growth. With Public Bank’s strong foothold, we remain committed to our business strategies and are well-positioned to weather any uncertainties ahead.”

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