PETALING JAYA: PUBLIC BANK BHD’s full-year revenue broke the RM20bil mark for the financial period ended Dec 31, 2016 (FY16), underpinned by continued growth in the net interest income and fee and commission income.
The banking group’s net profit for FY16 grew to RM5.2bil on the back of RM20.1bil in revenue. In comparison, it reported a net profit and revenue of RM5.06bil and RM19.18bil, respectively, in FY15.
The banking group, which celebrates its 50th anniversary, declared a dividend of 32 sen a share, similar to a year ago. This brings the full-year’s dividends payout to 58 sen.
In a statement, Public Bank founder and chairman Tan Sri Dr Teh Hong Piow said for the full year, the total dividends paid and payable amounted to RM2.24bil or 43% of the group’s net profit for FY16.
For the fourth quarter ended Dec 31, 2016, its earnings fell slightly to RM1.48bil from RM1.49bil a year ago. However, its revenue increased to RM5.08bil from RM4.93bil.
Earnings per share was at 38.4 sen compared with 38.65 sen.
According to Teh, based on Public Bank’s encouraging set of results, the group has demonstrated the ability to generate stable profitability amid the increasing challenging operating environment.
“This is attributed to the group’s proactive organic growth strategy with prudent banking practices, which has remained an edge in the current competitive banking landscape,” he added.
The Public Bank group’s gross loans as at the end of 2016 amounted to RM294bil, up 7.5% from a year ago. Customer deposits grew by 2.9% to RM310bil at end-2016.
“With the favourable financial performance, not only did the Public Bank Group continue to preserve its superior track record of 50 years of unbroken profitability since its inception in 1966, but it also continued to be at the forefront amongst its domestic banking peers in Malaysia by delivering a high net return on equity of 16.5%, as well as maintaining a low gross impaired loan ratio of 0.5% and efficient cost-to-income ratio of 32.3% in 2016,” Teh noted.
Teh pointed out that despite the intense competition amongst banks for market share, the group continued to achieve above-industry loan performance.
The Public Bank group recorded a total loan growth of 7.5%, with its domestic loan growth standing at 7.2% compared to the domestic banking industry’s loan growth of 5.3%, leading to an increased market share of 17.7% in the domestic lending market.
He said lending to the retail banking segment remained the key strategic focus of the Public Bank group, along with consumer financing for the purchase of residential properties and passenger vehicles, and extension of credit to small and medium enterprises (SMEs).
“As at the end of 2016, the group’s retail and SME loan portfolio collectively accounted for 85% of its total loans,” he said.
Public Bank also continued to achieve above-industry deposit growth amid challenges in the deposit market. In FY16, the group’s total customer deposits grew by 2.9% compared to the domestic banking industry’s deposit growth of 1.5%.
Despite challenges in the operating environment, total net income grew by 4.3% to RM9.96bil, supported by continued growth in net interest income and fee and commission income.
The group was the most cost-efficient bank in Malaysia, as its cost-to-income ratio increased from 30.5% in 2015, but still remaining efficient at 32.3% in 2016.This was well below the banking industry’s average cost-to-income ratio of 48.8%.
“Amid the prevailing economic uncertainties and challenges, the group continued to demonstrate resilience in its asset quality,” he said.
As at the end of 2016, Public Bank’s gross impaired loan ratio stood at 0.5%, which was significantly lower than the banking industry’s ratio of 1.6%.
Its impaired loans were well covered, with a loan loss coverage ratio of 102.7% as at the end of 2016 as compared to the banking industry’s coverage ratio of 90.2%.