Public Bank records net profit of RM1.62bil in 2Q, declares 9c div/share

KUALA LUMPUR: Public Bank Bhd, which registered an earnings boost in the first half of 2023 on the back of healthy loans and deposits growth, continues to see positive prospects for the country's banking sector.

Managing director and CEO Tan Sri Tay Ah Lek said upside factors include the continued expansion of the Malaysian economy while new growing opportunities arise from the increasing demand for digital banking and ESG products.

Nevertheless, he acknowledged that the post-pandemic recovery has been challenging.

"The Public Bank Group will remain vigilant to prevailing downside risks, while staying agile in onboarding viable business opportunities," he said in a statement.

In the second quarter ended June 30, 2023, Public Bank recorded a net profit of RM1.62bil, which was up from RM1.42bil in the same quarter in 2022, which translates to an earnings per share of 8.34 sen, from 7.3 sen previously.

The banking group reported revenue of RM6.26bil, a jump higher from RM4.97bil in the previous corresponding quarter.

For the six months period to June 30, 2023, the bank's net profit was RM3.33bil on revenue of RM12.39bil as compared to net profit of RM2.82bil and revenue of RM9.86bil.

According to Public Bank, the improved performance over the first half of the year was owing to continued healthy loans and deposits growth, prudent cost management as well as stable asset quality, which led to a resilient net return on equity of 13.2%.

The board of directors declared a first interim dividend of nine sen a share, going ex on Sept 13, 2023, and payable on Sept 22, 2023.

Public Bank said net interest income was up 3.4%, mainly on the back of the loans and deposits businesses.

Loans saw an annualised growth rate of 5.4% to RM387.2bil as at end-June, largely supported by domestic loans, which grew 5% to RM360.8bil.

Meanwhile, total customer deposits grew 6% year-on-year (y-o-y) to RM406.5bil as at end-June.

As at end-June, the group maintained a stable gross loans to fund and equity ratio of 80.9%.

In 1HFY23, the group's non-interest income grew 5.4% to RM1.25bil, on the back of higher income from its foreign exchange and stockbroking businesses.

Its unit trust business, Public Mutual, remained the main contributor to non-interest income with a pre-tax profit of RM387.6mil, representing 9% of the group's profit.

"Despite the unfavourable market condition, net asset value of funds under management had increased by 4.6%, over the six months period to RM96bil as at the end of June 2023, with a total of 180 unit trust funds under management," said Public Bank.

The group sustained an efficient cost-to-income ratio of 33.7% in the first half of 2023, underpinned by prudent cost management with operating expenses increasing 3.5% compared with the corresponding period in 2022.

Asset quality remained stable with gross impaired loans ratio of 0.55%.

Loan impairment allowances were lower by 85.7%, while loan loss coverage ratio stood at a prudent level of 199.1% as at the end-June 2023.

Overseas, the group's operations contributed to 7.8% to the group's profit, mainly contributed to its Hong Kong and Indochina operations.

As at the end-June, the group remained well capitalised with common equity Tier 1 capital ratio, Tier 1 capital ratio and total capital ratio standing at 14.7%, 14.7% and 17.6% respectively, after deducting the first interim dividend.

Liquidity coverage ratio also remained stable and healthy, further improved to 134.4%.

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Public Bank , Tay Ah Lek , Public Mutual , finance


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