Public Bank Q2 net profit up 5% on higher income

PETALING JAYA: Public Bank Bhd saw its net profit rise 5% to RM1.26 billion in the second quarter ended June 30, 2016 from RM1.2 billion in the previous corresponding period, driven by higher net interest income and income from the Islamic banking business.

Revenue was up 6% from RM4.74 billion to RM5.02 billion.

The group has proposed a first interim dividend of 26 sen per share.

"The improved profitability amid the increasing challenging operating environment shows that the group's proactive organic growth strategy with prudent banking practices has remained an edge in the competitive banking landscape," said Public Bank founder and chairman Tan Sri Teh Hong Piow in a statement yesterday.

Public Bank's six-month net earnings expanded 5% from RM2.37 billion to RM2.49 billion. Revenue, meanwhile, came in at RM10 billion, a 7.71% increase compared with RM9.34 billion in the same period a year ago.

In the first half of 2016, the group registered total loans of RM283.5 billion, representing an annualised growth rate of 7.3%.

On asset quality, Public Bank's gross impaired loan ratio stood at 0.5% as at end-June 2016, compared with the banking industry's 1.6%.

The group's common equity Tier 1 capital ratio, Tier 1 capital ratio and total capital ratio stood at a healthy level of 11.1%, 12.0% and 15.4% respectively at end-June 2016, after deducting the first interim dividend.

Public Bank said it will continue to focus on its niche in the retail banking business while maintaining its prudent credit policies and cost management in the current challenging operating environment.

"The group remains steadfast in its commitment to uphold sound risk management practices to support sustainable growth," it said.

Public Bank is confident that its strong market position and solid banking fundamentals built over the last 50 years, will continue to lead the group to steer through the challenges and heading towards achieving another year of favourable results.