PETALING JAYA: Public Bank Bhd’s net profit for the first quarter ended March 31, 2021 increased 15.1% to RM1.53 billion from RM1.33 billion in the same quarter of the previous year due to continued expansion in loans and deposits businesses and further boosted by fee-based revenue growth.
Revenue dropped 8.8% to RM5.03 billion from RM5.52 billion previously.
Public Bank founder, chairman emeritus, director and adviser Tan Sri Teh Hong Piow said for Q1 the operating environment remained challenging as the movement control order 2.0 (MCO 2.0) was imposed to address the resurgence of Covid-19 cases.
“The group continued to gain traction in its lending and deposit-taking businesses despite the ongoing economic challenges,” he said in a statement today.
The group’s total loans recorded an annualised growth of 4.8% in Q1, mainly supported by residential property financing, passenger vehicle financing and small and medium enterprise (SME) financing.
Teh said due to the low-interest-rate environment and economic stimulus measures, the group recorded improvements in its housing loans approvals, with an increase of 26.5% in Q1 compared to the same period last year.
“The group’s proactive promotion and participation in various special financing schemes initiated by the government and Bank Negara Malaysia to assist SMEs in overcoming their financial difficulties, had further contributed to the group’s loan growth,” he said.
Public Bank’s total customer deposits achieved an annualised growth of 2.9% and domestic customer deposits registered an annualised growth of 3%. The lower-cost current and savings deposits continued to grow at a strong pace during the quarter with an annualised growth of 18.4%.
The group’s non-interest income increased by 16.6% in Q1 compared with the corresponding period in 2020, mainly supported by the stronger growth achieved in the group’s unit trust business, fee and commission income as well as stockbroking income.
“The Public Bank group remained as the most cost-efficient bank in Malaysia, with cost-to-income ratio of 31.8%, significantly better than the domestic banking industry’s cost-to-income ratio of 42.8%. In light of the ongoing challenging operating condition, the group will continue to manage cost prudently in order to sustain profitability,” Teh said.
Meanwhile, the group’s gross impaired loan ratio stood at 0.4% in Q1, well below the banking industry’s gross impaired loan ratio of 1.6%. The group’s loan loss coverage ratio was maintained at a prudent level of 247% compared to the banking industry’s loan loss coverage of 111.8%. Including the RM1.1 billion regulatory reserves that have been set aside, its total reserves for loan losses were higher at 337.7%.
In Q1, Public Bank’s common equity Tier 1 capital ratio, Tier 1 capital ratio and total capital ratio stood at 13.8%, 13.8% and 16.9%, respectively.
“As for liquidity management, the group ensures sufficient liquidity buffer is maintained at all times. The group’s liquidity coverage ratio continued to stand at a healthy level of 128.3% as at the end of March 2021,” Teh said.
Public Bank is mindful of the ongoing downside risks that could pose further disruptions to the banking business. Thus, strategic business direction, prudent risk management practices, and cost efficiency measures will remain on the group’s business agenda so that the group can continue to withstand uncertainties and respond appropriately to any changes.
“While the group remains cautiously optimistic about the economic outlook, it will continue to strive hard for business growth in its core business segments in order to continue generating value for its stakeholders,” Teh said.
