Public Bank’s Q4 earnings up 22.3%

PETALING JAYA: Public Bank Bhd's net profit rose 22.27% to RM1.25 billion for the fourth quarter ended Dec 31, 2014 compared with RM1.03 billion in the previous corresponding period, attributable to higher net interest, fee, commission and foreign exchange income as well as lower loan impairment allowances.
Fourth-quarter revenue rose 15.56% from RM3.92 billion to RM4.53 billion.
It has proposed a final dividend of 31 sen per share, bringing the total dividend payout to 54 sen for FY14.
In a statement released yesterday, Public Bank founder and chairman Tan Sri Teh Hong Piow said despite facing net interest margin compression, the group's net interest income grew by 6.5% during the year, mainly contributed by continued strong loan and deposit growth as well as the positive impact arising from the hike in the overnight policy rate in July 2014 and the rights issue which was completed in August 2014.
"Despite facing the headwinds, the Public Bank group persevered and continued to perform well and recorded a strong annual loan growth of 10.8%, outpacing the banking system's loan growth of 8.7%.
"In tandem with that, the group also recorded similar double-digit growth of 10.2% in customer deposits, particularly contributed by its strong customer deposits in respect of its domestic commercial banking operations, which grew by 11.6%, and significantly surpassing the banking system's deposit growth of 7.6%," he said.
Public Bank's non-interest income improved steadily by 9.2% in 2014, due to higher income from its unit trust business, investment income and fee income from banking operations.
On asset quality, its impaired loan ratio further improved to 0.6% as at end-2014, significantly lower than the industry ratio of 1.7%. Loan loss coverage ratio of 122.4% was also higher than the Malaysian banking industry's ratio of 106.3%.
Public Bank's common equity Tier 1 capital ratio, Tier 1 capital ratio and total capital ratio stood at 10.8%, 12.2% and 15.8% respectively as at the end of 2014, after taking into account the provision for second interim dividend.
Public Bank's overseas operations contributed 7.4% of the group's overall pre-tax profit for 2014.
Commenting on the business outlook, Teh said the group will continue to focus on its core retail banking and financing business, whilst maintaining its prudent credit policies.
However, he expects net interest margin compression in the banking industry to persist as the competition for both loans and deposits market share remains intense.
"Despite the challenges ahead, the Public Bank Group strives to remain resilient by planning to face those challenges while working towards the best. The group is expected to maintain its earnings momentum and record satisfactory performance in 2015," he noted.
For FY14, Public Bank reported a gain of 11.17% in net profit to RM4.52 billion against RM4.06 billion it made a year before.
Full-year revenue, meanwhile, went up RM10.45% to RM16.86 billion compared with RM15.26 billion in FY13.
Public Bank's share price rose 8 sen or 0.44% to RM18.44 with 10.0395 million shares traded yesterday.