KUALA LUMPUR: Public Bank Bhd recorded strong sequential earnings growth in the third quarter ended September of RM1.39bil and an improvement from a year ago, boosted by higher income from investments, stock broking, fund management and Islamic banking.
In a statement issued yesterday, it said net profit rose by 39% to RM1.39bil mainly due to the one-off Day One net modification loss related to Covid-19 relief measures amounting to RM498.4mil recognised in the second quarter and lower negative effect of the overnight policy rate (OPR) reductions in the second quarter.
“These had resulted in higher overall net interest income and net income from Islamic banking business of RM410.4mil and RM198.4mil respectively. In addition, net fee and commission income was higher by RM111.4mil (up 26.4%) on higher income from stock-broking and fund management activities; other operating income increased by RM29.2mil and operating expenses decreased by RM21.8mil.
“These were partially offset by higher loan impairment allowance of RM180.9mil in anticipation of the potential effect of Covid-19 pandemic and lower investment income of RM61.3mil, ” it said.
Corporate lending’s pretax profit decreased by 76.3% to RM35.5mil mainly due to higher loan impairment allowance in anticipation of the potential effect of Covid-19 pandemic, partially offset by higher net interest income.
As for its treasury and capital market operations, pre-tax profit increased by 88.4% to RM146.5mil mainly due to higher net interest income and higher investment income. Its investment banking’s pretax profit increased by 318% to RM38.4mil mainly due to higher stock-broking income arising from higher business volume in the equity market.
Fund management business’s pre-tax profit increased by 15.8% to RM191.2mil mainly due to higher management fee When compared with the third quarter last year, Public Bank’s net profit of RM1.39bil was up by 2.2% from RM1.36bil a year ago, underpinned by higher income from investments, stock broking, fund management and Islamic banking.
While its revenue fell by 8.5% to RM5.13bil from RM5.61bil, its pre-tax profit rose by 2.3% to RM1.80bil from RM1.76bil a year ago.
Its net profit increased mainly due to higher investment income of RM102.9mil and also higher net fee and commission income of RM89.1mil on higher income from stock-broking and fund management. Public Bank also recorded higher Islamic banking income of RM63.6mil, higher net interest income of RM48mil and higher other operating income of RM25.2mil. “These were partially offset by higher loan impairment allowance of RM285.4mil in anticipation of the potential effect of Covid-19 pandemic, ” it said.
For the nine months, its net profit declined by 9.3% to RM3.72bil from RM4.10bil in the previous corresponding period. Revenue declined by 8.3% to RM15.38bil from RM16.78bil.
It said the lower profit was mainly due to the moderating revenue growth arising from the Covid-19 pandemic, the effect of the OPR reduction during the year, as well as the one-off net modification loss of RM498mil incurred in the second quarter due to the Covid-19 relief measures offered to individuals and businesses.
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