Public Bank’s 2Q earnings up 5% to RM1.4b


Public Bank Bhd’s net profit rose 5% year-on-year (YoY) to RM1.4 billion in the second-quarter ended June 30, 2018 (2Q18), on higher net income from its conventional and Islamic banking businesses and higher non-interest income, partially offset by lower investment and other operating income.

Revenue was 5% higher YoY at RM5.44 billion. The banking group declared a first interim dividend of 32 sen per share to be paid on Sept 19, 2018.

Other comprehensive net income for the quarter stood at RM56.3 million versus a comprehensive net loss of RM40.4 million last year, mainly due to foreign currency translation gains as a result of the weaker ringgit, according to its filing yesterday.

This was partially offset by a loss on revaluation of financial investments compared to a revaluation gain last year.

For the first half ended June 30, 2018 (1H18), the banking group’s net profit climbed 8.5% YoY to RM2.8 billion, while revenue increased 5.8% YoY to RM10.79 billion.

“The higher profit for the period was largely driven by growth in the loan and deposit business, with further impetus from a 4.9% growth in non-interest income,” Public Bank chairman and founder Tan Sri Dr Teh Hong Piow said in a statement yesterday.

Total gross loans rose an annualised rate of 4.1% to RM310.7 billion in 1H18, while domestic total loans grew at an 4.3% to RM288.3 billion. This was achieved through the group’s focus on residential properties and commercial lending to small and medium enterprises in the domestic banking industry.

Total customer deposits grew at an annualised rate of 6.7%, led by a 7.4% growth rate in domestic deposits.

As at end-June 2018, the group’s gross loan to fund and equity ratio stood at 79.4%, while gross impaired loans ratio was at 0.5% against the industry’s gross impaired loans ratio of 1.6%.

Net return on equity came in at 15% and cost-to-income ratio stood at 33.1% as at end- June this year.

The non-interest income segment remained a major revenue source, growing 4.9% in 1H18 on the group’s unit trust business and stable growth in banking transactional fee income.

“Public Mutual Bhd — the group’s wholly owned unit trust management subsidiary — grew pretax profit by 9% in 1H18. As at end-June 2018, Pub- lic Mutual managed a total of 144 unit trust funds with a total

net asset value of RM80.2 billion, while its market share stood at 40.3% in the domestic private unit trust industry,” Teh said.

Overseas operations contributed 8.4% to the group’s pretax profit in 1H18, led by Public Financial Holdings Ltd in Hong Kong and Cambodia Public Bank plc.

Teh said as at end-June this year, the banking group had 82 branches in Hong Kong and China, and 48 branches in Indochina.

“This includes the setup of six new branches in Vietnam in 2017, with five more branches to be opened in 2018,” he said.

Moving forward, Teh said the group will continue to “ride on the growing economy to strengthen its banking business, along with its organic growth strategy”, driven by its resilient fundamentals, consistent financial performance, agility to market changes and strong customer service culture.

Shares of Public Bank closed eight sen, or 0.33% higher at RM24.48 yesterday, giving it a market capitalisation of RM95.04 billion.