Public Bank posts RM1.4b 1Q19 profit

By FARA AISYAH / Pic By BLOOMBERG

Public Bank Bhd registered a net profit of RM1.41 billion or 36.32 sen per share for the first quarter ended March 31, 2019 (1Q19), on the back of the banking group’s healthy loan and deposit growth, coupled with its sustained strong asset quality.

The 1Q19 net profit was RM4.7 million or 0.34% higher from the bank’s 1Q18 net profit of RM1.4 billion or 36.39 sen per share.

Quarterly revenue increased 4.11% year-on-year to RM5.57 billion from RM5.35 billion a year ago.

Public Bank’s pretax profit for the three-month period inched up to RM1.82 billion, an increase of RM29.5 million or 1.7% from the RM1.79 billion in 1Q18, mainly due to higher investment income, higher foreign-exchange income and net writeback of loan impairment allowance.

The growth was partially offset by higher operating overheads, lower fee income and lower net interest income on shorter interest accrual period.

Public Bank founder and chairman emeritus Tan Sri Dr Teh Hong Piow said the group was able to sustain its performance even when the operating environment was still clouded by rising headwinds and persistent uncertainties.

“With the stable performance in 1Q19, the group continued to sustain its leading position as the most cost-efficient Malaysian bank with the best asset quality.

“This is clearly reflected in the group’s high net return-on-equity of 14%, efficient cost-to-income ratio of 33.8% and lowest gross impaired loan (GIL) ratio of 0.5%,” he said in a statement yesterday.

Public Bank’s total gross loans grew at an annualised rate of 3.9%, while domestic loans grew at a faster pace with a 4.8% annualised rate.

The expansion in the group’s loan portfolio was mainly attributed to the healthy growth in its residential properties financing, and lending to small and medium enterprises (SMEs) and corporate customers for the purchase of commercial properties and working capital.

Teh said Public Bank approved a total of RM13.4 billion loans in 1Q19, of which 57% were granted to retail consumers for the purchase of residential properties and passenger vehicles; whereas 20.3% represented lending to SMEs.

In tandem with the healthy loan growth, the group’s total customer deposits grew at an annualised rate of 4.5% from January to March 2019.

The group’s liquidity position remained healthy with its funding position being continuously supported by stable deposits.

Public Bank’s GIL ratio remained the lowest at 0.5% in 1Q19, compared to the banking system’s GIL ratio of 1.5%.

Teh said the group sustained a high loan loss coverage ratio of 124.7% as at the end of March 2019, well above the banking industry’s loan loss coverage of 96.2%.

He said including the RM1.9 billion additional regulatory reserves set aside, the group’s loan loss coverage ratio would be much higher at 244%.

Teh said Public Bank will continue to grow its business, while remaining cautious on downside risks.

“While the group’s long-term banking strength will continue to place it in good stead to embrace growth, the group will further strengthen its core competencies, such as digital capabilities and superior customer service, to capture prospective opportunities and deliver sustained performance in this changing environment,” he added.