Public Bank 1Q earnings eases by 3.5% due to higher costs and provisions

PUBLIC BANK Bhd saw a 3.5% decline in net profit for the first quarter ended March 31, 2024 (1Q24) compared to the previous year.

The dip, attributed primarily to increased personnel costs and provisions, resulted in a net profit of RM1.65 billion, down from RM1.71 billion, a year earlier.

Despite this, net interest income saw a 2.8% rise year-on-year to RM2.73 billion, while non-interest income edged up 0.5% to RM649.64 million.

Public Bank underscores a cautious business approach amid ongoing risks, while expressing readiness to seize growth opportunities amidst an improved economic outlook.

The bank noted a slight improvement in net interest margin from the previous quarter but highlighted a decrease of five basis points year-on-year to 2.21%.

During the quarter, Public Bank allocated RM63.4 million for impairment allowances on loans, advances, and financing, a significant increase from RM1.54 million in the same period last year.

Operating expenses, including staff costs, rose by 10% year-on-year to RM1.20 billion.

While acknowledging downside risks such as weaker global demand and geopolitical conflicts, Public Bank assured a vigilant treasury operation and reinforced risk management to navigate market uncertainties.

The bank maintained a healthy asset quality, with gross impaired loans at 0.6% and a loan loss coverage ratio of 168.7%, surpassing the industry average of 92.1%. Including regulatory reserves, the coverage ratio reached 200%.

Public Bank’s common equity tier 1 capital remained robust at 14.5%, underscoring its commitment to sustaining strong capitalization and funding to support business growth and stakeholder interests. — TMR