Public Bank's Q2 net profit rises 6% to RM1.33 billion

PETALING JAYA: Public Bank Bhd’s net profit for the second quarter ended June 30, 2017 rose 6.02% to RM1.33 billion from RM1.25 billion in the previous year’s corresponding quarter, on the back of higher net interest income, lower loan impairment allowance and higher net fee and commission income.

Revenue grew by 3.75% to RM5.16 billion in the quarter under review from RM4.98 billion in the same quarter last year.

Public Bank chairman Tan Sri Teh Hong Piow said in a statement the group “will be able to continue its positive momentum in sustaining its profitability with its clear and focused business strategy and prudent credit culture, underpinned by its consistent financial performance under the current challenging operating environment”.

“With the improved profitability, Public Bank achieved a net return on equity of 15.3%. The group’s financial strength was also attributed to its strong asset quality and efficient cost management, as reflected in its gross impaired loan ratio of 0.5% and cost-to-income ratio of 33.8% as at the end of June 2017,” he added.

The board of directors has proposed an interim dividend of 27 sen.

In the first half of 2017, Public Bank Group’s total loans recorded an annualised growth rate of 3.1% to RM298.5 billion. Its domestic loans expanded at an annualised rate of 4.3% outpacing the industry’s rate of 2.8%.

As at end-June, the group’s impaired loan ratio stood at 0.5%, which Teh said was achieved due to its strict compliance culture, robust risk management and prudent credit practices.

As for capital position, Public Bank’s common equity Tier 1 capital ratio, Tier 1 capital ratio and total capital ratio were all at healthy levels of 11.8%, 12.6% and 16.4% respectively as at end-June, after deducting the first interim dividend
Driven mainly by its Hong Kong and Cambodian branches, Public Bank’s overseas operations contributed 10.2% to its pre-tax profit of RM3.37 billion.

Meanwhile, the group is continuing its expansion plans into Vietnam.

“With the 100% foreign-owned bank licence obtained in 2016, the group has further expanded its business through the opening of two new branches in the first half of 2017. To date, it has nine branches and is planning to open four more branches in the near term,” Teh said.

Public Bank’s net profit for the first six months of the current financial year rose 3.77% to RM2.57 billion from RM2.48 billion recorded in the same period last year. Revenue inched higher by 2.08% to RM10.19 billion from the RM9.98 billion last year.

Public Bank’s shares gained 0.2% to RM20.42 yesterday, with 2.59 million changing hands.

Going forward, the group said it will continue to work closely with AIA Bhd to ensure its bancassurance products remain consistently competitive and relevant to customers' need. Besides that, it will expand its fee income segment through foreign exchange-related transactions and transactional banking services, leverage on its corporate branding while expanding its business organically as well as capitalising on its overseas operations to enhance its performance.

“Banking is a business of trust, hence the group will continue to emphasise on prudent management for sustainable performance and stability," Teh said.