Public Bank declares 40 sen dividend despite flat Q4 earnings

PETALING JAYA: Public Bank Bhd posted flat earnings of RM1.4 billion for the fourth quarter ended Dec 31, 2019 due to higher other operating expenses in tandem with increased business activities.

Revenue showed a marginal increase of 0.7% to RM5.67 billion from RM5.63 billion.

For FY19, net profit declined 1.4% to RM5.51 billion, from RM5.59 billion, as the group was affected by the reduction in the Overnight Policy Rate (OPR) of 0.25% in May 2019 as compared to an OPR hike in January 2018.

OPR cut aside, Public Bank founder and chairman Tan Sri Teh Hong Piow (pix) said the overall net interest income of the group improved marginally by RM9.3 million.

In addition, Public Bank recorded higher investment income of RM121.9 million, higher net income from Islamic banking business of RM63.2 million, higher other operating income of RM102.1 million and lower impairment allowance for loans and other assets of RM21.7 million during the year.

Revenue, on the other hand, increased 1.9% to RM22.45 billion, from RM22.04 billion previously.

Gross loans grew by RM13.2 billion or 4.1% to RM330.5 billion in FY19, as compared to RM317.3 billion last year, mainly driven by growth in mortgage financing, hire purchase financing and corporate lending.

Total deposits increased 4.2% to RM353.3 billion.

The group’s gross impaired loan ratio continued to remain stable at 0.5% as at Dec 31, which was attributed to its consistent adoption of stringent credit underwriting and proactive recovery processes.

“We are pleased to declare a higher second interim dividend of 40 sen. Together with the first interim dividend of 33 sen, the group’s full year dividend for 2019 would amount to 73 sen, as compared to 69 sen paid in 2018.

“This would translate into a total of RM2.83 billion which represents 51.4% payout of the group’s net profit for 2019. The second interim dividend will be paid on March 20, based on the dividend entitlement date of March 12, 2020,” Teh said in the group’s bourse filing.

The group’s capital common equity Tier 1 capital ratio, Tier 1 capital ratio and total capital ratio stands at 13.5%, 13.5% and 16.8% respectively as at the end of 2019, after deducting the second interim dividend to be paid.

Looking ahead, Teh said the group will remain cautiously optimistic, given the lingering uncertainties.

“The group will remain focused on organic growth strategy and continue to sharpen its competitive capabilities to strengthen resilience in its core business in retail and commercial banking. Sustaining stable profitability and preserving strong asset quality will remain as the group’s strategic focus going forward,” he said.

At the noon trading break, Public Bank shares were 6 sen higher at RM17.58, with 1.9 million shares done.