KUALA LUMPUR: Public Bank Bhd’s net profit for FY11 ended Dec 31 rose 14.3% to a record RM3.48 billion from RM3.05 billion previously.
The company said the improved earnings were due to higher net interest and net income from its Islamic banking business, which grew 8.6% y-o-y or RM464.6 million. Its earnings were also boosted by its higher net fee and commission income, which grew 8.4% or RM87.1 million.
“The Public Bank group’s sound financial results for 2011 are a validation of the group’s effective organic growth strategies and sustainable business model. We have benefited from our disciplined execution of our growth strategies while preserving prudent risk management practices to ensure sustainable and stable returns,” said chairman Tan Sri Teh Hong Piow in a press statement.
Public Bank announced a second interim single-tier dividend of 28 sen per share, bringing the total dividends paid in FY11 to 48 sen. It paid its first interim dividend of 20 sen in August last year. This brings its total payout for the full year to RM1.68 billion, or 48% of its total net profit, its lowest dividend payout ratio in recent years.
Public Bank’s dividend payout ratio has dropped since FY08, owing to concerns about Basel requirements, falling to 53.2% that year from 87.4% in FY07.
The bank’s capital position, measured by its Tier 1 capital ratio, stood at 10% at end-2011, while its risk-weighted capital ratio improved to 15.3%. Revenue for the full year grew 15.6% to RM12.76 billion from RM11.04 billion in 2010.
“In addition to the growth of income from various sources, impairment allowance on loans showed a drop of 9.9%, or RM65.5 million, despite the 1.5% collective impairment allowance set aside for strong loan growth. These were partially offset by higher operating expenses, which rose 5.2% or RM108.4 million mainly due to an increase in personnel costs resulting from higher business volume,” the company said in a statement to Bursa Malaysia yesterday.
Public Bank said it remained the country’s most cost-efficient bank as its cost-to-income ratio was below 30% compared with the banking industry’s average of 46.7%. Its gross impaired loan ratio improved to 0.9%.
The bank saw its total customer deposits rise 13.3% to reach RM200.4 billion at end-2011, while gross loans grew 13.5% to RM177.7 billion. For 4QFY11 ended Dec 31, net profit rose 3.6% to RM876.9 million from RM846.2 million previously, while revenue rose 11.1% to RM3.3 billion from RM2.97 billion.
OSK Research said in a report yesterday that Public Bank’s 4QFY11 results were in line with estimates although it signalled a moderation in growth.
“The contraction in net interest margin, slowdown in loans momentum and negative impact of weak capital market sentiment on new unit trust sales and brokerage income were the key drags on the company’s growth momentum in 4Q,” said the research house, which maintained its “neutral” recommendation on the stock and left its target price unchanged at RM14.
“Despite the stock’s superior asset quality and resilience in weathering economic downturns, we think the market has largely priced these into its premium valuations,” OSK said.
The counter closed at a 52-week high of RM13.56 yesterday, as trading volume rose to 4.59 million shares from 12.4 million shares last Friday.
This article appeared in The Edge Financial Daily, January 31, 2012.
The company said the improved earnings were due to higher net interest and net income from its Islamic banking business, which grew 8.6% y-o-y or RM464.6 million. Its earnings were also boosted by its higher net fee and commission income, which grew 8.4% or RM87.1 million.
“The Public Bank group’s sound financial results for 2011 are a validation of the group’s effective organic growth strategies and sustainable business model. We have benefited from our disciplined execution of our growth strategies while preserving prudent risk management practices to ensure sustainable and stable returns,” said chairman Tan Sri Teh Hong Piow in a press statement.
Public Bank announced a second interim single-tier dividend of 28 sen per share, bringing the total dividends paid in FY11 to 48 sen. It paid its first interim dividend of 20 sen in August last year. This brings its total payout for the full year to RM1.68 billion, or 48% of its total net profit, its lowest dividend payout ratio in recent years.
Public Bank’s dividend payout ratio has dropped since FY08, owing to concerns about Basel requirements, falling to 53.2% that year from 87.4% in FY07.
The bank’s capital position, measured by its Tier 1 capital ratio, stood at 10% at end-2011, while its risk-weighted capital ratio improved to 15.3%. Revenue for the full year grew 15.6% to RM12.76 billion from RM11.04 billion in 2010.
“In addition to the growth of income from various sources, impairment allowance on loans showed a drop of 9.9%, or RM65.5 million, despite the 1.5% collective impairment allowance set aside for strong loan growth. These were partially offset by higher operating expenses, which rose 5.2% or RM108.4 million mainly due to an increase in personnel costs resulting from higher business volume,” the company said in a statement to Bursa Malaysia yesterday.
Public Bank said it remained the country’s most cost-efficient bank as its cost-to-income ratio was below 30% compared with the banking industry’s average of 46.7%. Its gross impaired loan ratio improved to 0.9%.
The bank saw its total customer deposits rise 13.3% to reach RM200.4 billion at end-2011, while gross loans grew 13.5% to RM177.7 billion. For 4QFY11 ended Dec 31, net profit rose 3.6% to RM876.9 million from RM846.2 million previously, while revenue rose 11.1% to RM3.3 billion from RM2.97 billion.
OSK Research said in a report yesterday that Public Bank’s 4QFY11 results were in line with estimates although it signalled a moderation in growth.
“The contraction in net interest margin, slowdown in loans momentum and negative impact of weak capital market sentiment on new unit trust sales and brokerage income were the key drags on the company’s growth momentum in 4Q,” said the research house, which maintained its “neutral” recommendation on the stock and left its target price unchanged at RM14.
“Despite the stock’s superior asset quality and resilience in weathering economic downturns, we think the market has largely priced these into its premium valuations,” OSK said.
The counter closed at a 52-week high of RM13.56 yesterday, as trading volume rose to 4.59 million shares from 12.4 million shares last Friday.
This article appeared in The Edge Financial Daily, January 31, 2012.
