KUALA LUMPUR: Public Bank Bhd’s net profit for 3QFY11 rose 14.8% to RM898.78 million from RM782.7 million a year earlier. Pre-tax profit grew by 13% to RM1.19 billion over the same period while revenue increased by 13.5% to RM3.27 billion against RM2.88 billion previously.
In a filing with Bursa Malaysia yesterday, Public Bank said the higher profit was achieved on strong loans and deposits growth and stable asset quality, which resulted in higher net interest income and lower loan impairment charges.
For 9MFY11 ended Sept 30, Public Bank’s net profit rose 18.4% to RM2.6 billion from RM2.2 billion a year earlier.
It registered pre-tax profit growth of 16.6%, while revenue expanded 17% to RM9.43 billion from RM8.06 billion from a year earlier. It posted basic earnings per share of 74.44 sen against 63.02 sen.
Chairman Tan Sri Teh Hiong Piow said the group’s financial results are a validation of the group’s effective organic growth strategies and sustainable business model.
“The group continues to retain a clear lead with the highest net return on equity among Malaysian banking groups of 26.7%. At the same time, we continue to sustain top ranking in asset quality and cost efficiency among the peers,” he said in a statement yesterday.
He noted that the group’s net interest and finance income has improved by 9.7% for 9MFY11, while fee income grew by 9.1%.
As at Sept 30, its gross loans book stood at RM172.7 billion, 13.8% higher on an annualised basis. Teh noted that domestic loan growth grew by 14.1% on an annualised basis. For 9MFY11, total customer deposits increased by an annualised rate of 12.7% to RM193.7 billion, while domestic customer deposits charted at a stronger annualised growth rate of 13.8%.
“We are confident that with our healthy loans pipeline coupled with our strong Public Bank brand franchise, we will continue to strengthen our core revenue streams,” said Teh.
Public Bank said loans for mid-market commercial enterprises, residential property loans and passenger vehicles loans accounted for 85% of its total loan portfolio at end-September.
“The group’s residential properties financing grew at an impressive annualised rate of 17.7% and passenger vehicles at 9.7% during 9MFY11, compared with lower industry growth of 12.5% and 6.7%,” said Teh, adding that the loans to the SME sector grew by 15.6%.
Teh said the group’s funding position remained strong due to its robust retail franchise and large domestic depositor base of over 4.5 million customers.
“Domestic customer deposits grew at an annualised growth rate of 13.8% compared with the domestic banking industry’s annualised growth of 9.8%.
“The strong domestic deposit growth was mainly attributed to steady inflows of fixed deposits and savings deposits, which saw annualised growth rates of 12.2% and 11.9% respectively,” he said.
The group’s non-interest income grew 9.1% from a year earlier, driven mainly by higher banking transactional income, income from Public Mutual’s unit trust business, and higher investment income.
“Public Mutual continued to show commendable performance with a pre-tax profit growth of 22.3% for 9MFY11 and maintained its pole position in private unit trust business with RM41.3 billion of net assets under management,” Teh said.
He said the group had a cost-to-income ratio of 30%, with operation expenses increasing by 4.6% for the nine-month period.
He noted that gross impaired loan ratio fell to below 1% as at end-September from 1.14% at the beginning of the year.
“The group’s loan loss coverage ratio was at 178.1%, compared with the banking industry’s coverage ratio of 96.3% notwithstanding that more than 90% of the group’s impaired loans outstanding are secured,” said Teh.
New impaired loans formation for 9MFY11 improved to an annualised 0.33% from 0.51% in 2010, resulting in loan impairment allowances of 15%.
As at Sept 30, Tier-1 capital ratio stood at 9.5% and risk-weighted capital ratio at 14.9%, compared with 10% and 13.7% at the beginning of 2011.
The improvement in the risk-weighted capital ratio was due to the issuance of RM3 billion subordinated notes under the existing subordinated medium-term note programme in August 2011, said the banking group.
On the group’s prospects, Teh said Public Bank will continue to focus on its core retail banking and financing business.
“With the expectations that global uncertainties and volatility will persist over the medium term, we remain vigilant and focused on balancing growth with sustainable returns.
“The outlook of the Malaysian banking sector, which the group largely operates in, continues to be stable and supportive of growth,” he said.
This article appeared in The Edge Financial Daily, October 18, 2011.
In a filing with Bursa Malaysia yesterday, Public Bank said the higher profit was achieved on strong loans and deposits growth and stable asset quality, which resulted in higher net interest income and lower loan impairment charges.
For 9MFY11 ended Sept 30, Public Bank’s net profit rose 18.4% to RM2.6 billion from RM2.2 billion a year earlier.
It registered pre-tax profit growth of 16.6%, while revenue expanded 17% to RM9.43 billion from RM8.06 billion from a year earlier. It posted basic earnings per share of 74.44 sen against 63.02 sen.
Chairman Tan Sri Teh Hiong Piow said the group’s financial results are a validation of the group’s effective organic growth strategies and sustainable business model.
“The group continues to retain a clear lead with the highest net return on equity among Malaysian banking groups of 26.7%. At the same time, we continue to sustain top ranking in asset quality and cost efficiency among the peers,” he said in a statement yesterday.
He noted that the group’s net interest and finance income has improved by 9.7% for 9MFY11, while fee income grew by 9.1%.
As at Sept 30, its gross loans book stood at RM172.7 billion, 13.8% higher on an annualised basis. Teh noted that domestic loan growth grew by 14.1% on an annualised basis. For 9MFY11, total customer deposits increased by an annualised rate of 12.7% to RM193.7 billion, while domestic customer deposits charted at a stronger annualised growth rate of 13.8%.
“We are confident that with our healthy loans pipeline coupled with our strong Public Bank brand franchise, we will continue to strengthen our core revenue streams,” said Teh.
Public Bank said loans for mid-market commercial enterprises, residential property loans and passenger vehicles loans accounted for 85% of its total loan portfolio at end-September.
“The group’s residential properties financing grew at an impressive annualised rate of 17.7% and passenger vehicles at 9.7% during 9MFY11, compared with lower industry growth of 12.5% and 6.7%,” said Teh, adding that the loans to the SME sector grew by 15.6%.
Teh said the group’s funding position remained strong due to its robust retail franchise and large domestic depositor base of over 4.5 million customers.
“Domestic customer deposits grew at an annualised growth rate of 13.8% compared with the domestic banking industry’s annualised growth of 9.8%.
“The strong domestic deposit growth was mainly attributed to steady inflows of fixed deposits and savings deposits, which saw annualised growth rates of 12.2% and 11.9% respectively,” he said.
The group’s non-interest income grew 9.1% from a year earlier, driven mainly by higher banking transactional income, income from Public Mutual’s unit trust business, and higher investment income.
“Public Mutual continued to show commendable performance with a pre-tax profit growth of 22.3% for 9MFY11 and maintained its pole position in private unit trust business with RM41.3 billion of net assets under management,” Teh said.
He said the group had a cost-to-income ratio of 30%, with operation expenses increasing by 4.6% for the nine-month period.
He noted that gross impaired loan ratio fell to below 1% as at end-September from 1.14% at the beginning of the year.
“The group’s loan loss coverage ratio was at 178.1%, compared with the banking industry’s coverage ratio of 96.3% notwithstanding that more than 90% of the group’s impaired loans outstanding are secured,” said Teh.
New impaired loans formation for 9MFY11 improved to an annualised 0.33% from 0.51% in 2010, resulting in loan impairment allowances of 15%.
As at Sept 30, Tier-1 capital ratio stood at 9.5% and risk-weighted capital ratio at 14.9%, compared with 10% and 13.7% at the beginning of 2011.
The improvement in the risk-weighted capital ratio was due to the issuance of RM3 billion subordinated notes under the existing subordinated medium-term note programme in August 2011, said the banking group.
On the group’s prospects, Teh said Public Bank will continue to focus on its core retail banking and financing business.
“With the expectations that global uncertainties and volatility will persist over the medium term, we remain vigilant and focused on balancing growth with sustainable returns.
“The outlook of the Malaysian banking sector, which the group largely operates in, continues to be stable and supportive of growth,” he said.
This article appeared in The Edge Financial Daily, October 18, 2011.
