PETALING JAYA: PUBLIC BANK BHD, the country’s second largest lender by market value, recorded a net profit of RM1.41bil in the fourth quarter ended Dec 31,2019.
The net profit for the three-month period, which was flattish on a year-on-year (y-o-y) basis, was weighed down by higher other operating expenses – which is in tandem with increased business activities; increased allowance for impairment on loans, advances and financing; as well as higher tax expense and zakat.
These factors had offset Public Bank’s gains from higher foreign exchange income, net interest income, investment income and net income from Islamic banking business.
Public Bank’s revenue for the quarter in review was RM5.67bil, which marks a marginal growth of RM42.11mil or 0.75% y-o-y.
The board of directors declared a 40 sen dividend for the final quarter. Earnings per share were 36.21 sen.
Cumulatively, Public Bank’s earnings for the financial year 2019 (FY19) fell RM79.05mil or 1.41% y-o-y to RM5.51bil, amid improved revenue.
The bank said its profits were affected as a result of the 25-basis-point cut in overnight policy rate announced by Bank Negara in May 2019. However, it pointed out that its overall net interest income improved marginally by RM9.3mil, or 0.1%, amid the rate cut.
“In addition, the group had recorded higher investment income of RM121.9mil (up 265.6%), higher net income from Islamic banking business of RM63.2mil (up 5.9%), higher other operating income of RM102.1mil (up 26.1%) and lower impairment allowance for loans and other assets of RM21.7mil (up 12.5%) during the year.
“These were partially offset by improved operating overheads of RM245.7mil (down 6.9%), which was in tandem with increased business activities, while net fee and commission income was lower by RM37.6mil (down 2.1%) resulting mainly from lower banking fee income and unit trust management-related fee income, ” it said.
Public Bank’s revenue for FY19 rose by 1.87% y-o-y to RM22.45bil.
The bank added that it remained to be supported by healthy loans and customer deposits growth, coupled with stable asset quality.
Gross loans grew by RM13.2bil or 4.1% to RM330.5bil as at end-2019, mainly driven by growth in mortgage financing, hire-purchase financing and corporate lending.
Particularly, the bank’s domestic loan growth was 4.5% in 2019, which was higher than the domestic banking system’s loan growth of 3.9%.
Total deposits from customers increased by 4.2% or RM14.2bil to RM353.3bil as at Dec 31,2019.
On the domestic front, Public Bank achieved a stronger growth of 4.7% in total customer deposits, which was also higher than the domestic banking system’s deposit growth of 2.9%.
“The group’s gross impaired loan ratio continued to remain stable at 0.5% as at Dec 31,2019. This was attributed to the group’s consistent adoption of stringent credit underwriting and proactive recovery processes, ” it said.
On the bank’s outlook, Public Bank founder and chairman Tan Sri Teh Hong Piow said it would remain cautiously optimistic in 2020.
“The group will remain focused on organic growth strategy and continue to sharpen its competitive capabilities to strengthen resilience in its core business in retail and commercial banking.
“Sustaining stable profitability and preserving strong asset quality will remain as the group’s strategic focus, going forward, ” stated Teh in a separate statement.
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