KUALA LUMPUR: PUBLIC BANK BHD posted an improved set of financial results for the financial year ended Dec 31, 2017 with earnings at a record RM5.47bil, up 5% from the RM5.20bil a year ago.
The earnings had been on a strong upward trend, with fresh records each year. It posted FY12 earnings of RM3.826b in 2012, RM4.064bil in FY13 and advancing to RM4.518bil in FY14. Its earnings jumped to RM5.062bil in FY15.
Announcing the stronger set of results on Thursday, Public Bank said for FY17 its revenue increased to RM20.858bil from RM20.102bil. It proposed a final dividend of 34 sen a share, bringing the total dividend for the year to 61 sen compared with 32 sen a year ago and 58 sen for FY16.
In the fourth quarter, its earnings rose 0.2% to RM1.485bil from RM1.482bil a year ago. Its revenue increased by 5.2% to RM5.35bil from RM5.08bil. Earnings per share were 38.47 sen compared with 38.40 sen.
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, surpassing the RM7bil mark for the first time.
“This represents 8.6% growth from the pre-tax profit of RM6.55bil achieved a year ago. Net profit attributable to shareholders grew by 5.1% to RM5.47bil, translating to a net return on equity of 15.8% for 2017,” he said.
The banking group's strong financial results were underpinned by a commendable 7.9% total net income growth. This was attributed to steady loan growth coupled with continuous drive on fee-based revenue and effective cost management.
“With the resilient performance in 2017, the Public Bank group continued to achieve a high net return on equity of 15.8% whilst maintaining its low gross impaired loan ratio of 0.5% and an efficient cost-to-income ratio of 31.9%.
“The results are a validation of the group’s effective organic growth strategies and sustainable business model. We have benefited from our disciplined execution of our growth strategies whilst preserving prudent risk management practices to ensure sustainable and stable returns,” he said.
For FY17, it sustained a steady loan growth momentum at a rate of 3.6%. Domestic lending business grew by 4.6% and beat the domestic banking industry’s loan growth rate of 4.1%.
Its loan growth was mainly due to the lending growth in its retail consumer and commercial banking segment, comprising financing for the purchase of residential properties and extension of credits to small and medium enterprises.
Public Bank's total customer deposits grew by 3.0%, mainly due to the steady inflow of core deposit comprising fixed deposits, low-cost savings and current accounts, which grew by 4.5%.
“The group’s robust funding position was mainly supported by its strong retail franchise and large domestic depositor base of over six million customers who continue to place their trust and confidence in the Group in safeguarding their funds,” he said.
Teh said with the steady inflow of customer deposits, the Public Bank Group remains well funded with a healthy gross loan to fund and equity ratio of 80.7% as at the end of 2017.
Arising from the group’s initiative to drive growth of its fee-based revenue in order to sustain better return for its shareholders, the group’s non-interest income increased by 11.3% in 2017 as compared to 2016.
Public Mutual continued to contribute positively to the non-interest income growth of the group. For FY17, fee income from unit trust business made up 39% of the group’s total non-interest income.
For FY17, Public Mutual reported an impressive 15.4% growth in pre-tax profit to RM661mil.
Meanwhile, Public Bank continued to be the most efficient banking group in Malaysia with its best cost-to-income ratio of 31.9% as compared to the banking industry’s average cost-to-income ratio of 45.8%.
As at the end of 2017, the banking group's impaired loan ratio remained low at 0.5% versus the industry ratio of 1.5%. Loan loss coverage ratio of 95.5% at end-2017 continued to be better as compared to the Malaysian banking industry’s ratio of 82.9%.
“Including the RM2.4bil regulatory reserves set aside, the group’s loan loss coverage ratio would be 256.5%, which provides a strong buffer for the group’s adoption of MFRS 9 effective Jan 1, 2018,” Teh said.