Public Bank eyes 9-10% loan growth in 2015

KUALA LUMPUR: Public Bank Bhd is targeting a gross loan growth of 9-10% for 2015, ahead of the projected industry loan growth of below 8%.
The third largest lender in Malaysia outstripped industry loan growth of 9.3% last year, to grow by 10.8% in 2014.
Public Bank is also targeting a net return on equity of below 16%, a cost to income ratio of below 32% and deposit growth of 9-10% this year.
The setting of its key performance targets for 2015 has taken into account the group's achievements in 2014, together with the risk appetite of the group, the regulatory requirements under the Basel 3 capital framework and prevailing medium-term economic outlook.
Managing director and CEO Tan Sri Tay Ah Lek said the challenging and increasingly regulated business environment as well as intense competition for loans and deposits will continue to impact margins. Hence, the group will accelerate business innovation and pursue operational efficiency while maintaining prudent risk and cost management.
"The group is expected to maintain its earnings momentum and record satisfactory performance in 2015," Tay said at the group's AGM here yesterday.
He added that the group will also preserve its asset quality, with its gross impaired loan ratio being the lowest in the industry at 0.7%, compared with the industry's 1.7%.
COO Chang Siew Yen said the group will continue with its strategy to pursue sustainable growth in its retail banking business, in both domestic and overseas operations.
"The group will continue to grow its home mortgages, hire purchase and SME lending. On the funding operations, the group will procure cheaper sources of funding to optimise funding costs," said Chang.
She said growing fee-based revenue remains the key strategic focus and the group will continue to focus on enhancing cross-selling initiatives and strengthening the infrastructure to increase fee-based revenue contribution to the group.
"With Public Bank's strong financial track record, supported by its solid asset quality, healthy capital structure and firm commitment to service excellence, the group is well positioned to face the challenges ahead and to seize opportunities to further grow its business."
On foreign operations, the group does not have immediate plans to increase its penetration into countries in Asia other than countries in which the group currently has a market presence in. It will continue to expand its overseas branch network and business operations in tandem with the growth potential of the economies of these countries.
Public Bank recorded a net profit of RM4.52 billion in 2014. The total dividend paid for 2014 was 54 sen, which amounted to RM2.08 billion, representing 46.1% of the group's net profit for 2014.
The group said it has no exposure to 1Malaysia Development Bhd.