by S BIRRUNTHApost-pandemic
PUBLIC Bank Bhd’s net profit for the third quarter ended Sept 30, 2022 (3Q22), rose 16.8% to RM1.59 billion from RM1.36 billion a year ago, underpinned by higher net interest income and lower loan impairment allowance.
In a filing to Bursa Malaysia today, the bank said the higher net interest income was partly attributable to loan growth achieved and the positive effect of Overnight Policy Rate (OPR) hikes.
It added that lower loan impairment allowance was mainly attributed to adequate pre-emptive allowance made in the prior years.
The bank registered a net interest income of RM338.1 million (+16.5%) and lower loan impairment allowance of RM228.5 million (+70.4%), partially offset by higher other operating expenses of RM101.5 million (-10.4%).
Meanwhile, Public Bank’s quarterly revenue rose 14.3% to RM5.5 billion from RM4.81 a year earlier, while earnings per share climbed to 8.19 sen from 7.01 sen previously.
In view of its favourable performance, Public Bank declared a second interim dividend of four sen per share for the quarter, which will result in a total dividend payout of RM776.4 million.
The second interim dividend will be paid on Dec 23 based on the dividend entitlement date of Dec 15, 2022.
For the cumulative nine months ended Sept 30, 2022 (9M22), the bank’s net profit increased 3% to RM4.4 billion from RM4.28 billion a year prior.
Cumulative revenue rose 4.1% to RM15.36 billion from RM14.76 billion previously.
As at the end of September 2022, Public Bank’s total loans expanded at an annualised rate of 5.8% to RM373.6 billion.
Domestic loans grew at an annualised rate of 5.2% to RM347.8 billion, mainly supported by residential properties and hire purchase financing, which expanded at an annualised rate of 7.4% and 9.9% respectively.
For the 9M22, the bank’s non-interest income was lower by 11%, largely due to the lower unit trust fees, stockbroking income, as well as investment income amid the unfavourable market conditions.
Overhead expenses increased by 6.3% in tandem with the resumption of economic activities.
Notwithstanding this, Public Bank said it continued to be the most cost-efficient bank in the domestic banking industry, with the lowest cost-to-income ratio of 32.6% in the first 9M22.
As at the end of September 2022, the bank sustained a low gross impaired loans ratio of 0.3%, significantly lower than the domestic banking industry’s average gross impaired loan ratio of 1.8%.
Its loan loss coverage ratio stood at 339.5%, significantly higher than the banking industry’s loan loss coverage ratio of 97.8%. Including regulatory reserves, the bank’s loan loss coverage ratio was higher at 359.6%.
Public Bank’s liquidity coverage ratio also remained stable at 123.2%.
On prospects, Public Bank said the Malaysian economic growth gains further momentum as the nation continues its post-pandemic recovery.
The bank added that while external trade is expected to moderate amid slower global economic growth, domestic demand continues to support economic expansion, with the job market and income prospects improving.
However, it noted that downside risks remain, stemming from inflationary pressure, lingering supply chain disruptions, global monetary policy tightening and geopolitical tensions, which could further weigh on the global economy.
Commenting on this, Public Bank founder and chairman emeritus Tan Sri Dr Teh Hong Piow said the bank will remain vigilant to the uncertainties and challenges.
“The group will continue to build business resilience by maintaining a healthy capital position, preserving asset quality, further strengthening its risk management capabilities and upholding sound corporate governance practices.
“As the group continues to leverage on its core banking business to grow its business, the group will remain agile in strategy implementation to capture any business opportunities arising from the economic recovery and evolving business landscape,” he said in a press statement.
Public Bank’s share price closed nine sen or 2.04% higher at RM4.50 today, giving it a market capitalisation of RM87.35 billion.