Public Bank Group achieves RM2.49 bln 1H12 pre-tax profit
Posted on July 24, 2012, Tuesday
KUCHING: Public Bank Group has achieved a strong set of results with a pre-tax profit of RM2.49 billion for the half of 2012 (1H12), driven by strong retail banking loans growth, asset quality preservation and effective cost management.
Chairman Tan Sri Datuk Seri Dr Teh Hong Piow highlighted, “As a result of the retrospective application of Malaysia Financial Reporting Standards (MFRS) 139, Public Bank Group’s pre-tax profit and net profit for the corresponding first half of 2011 were restated upwards by RM175 million and RM131 million to RM2.43 billion and RM1.84 billion respectively.
“Hence, the group’s pre-tax profit and net profit for the first half of 2012 grew by 2.1 per cent and three per cent respectively as compared with the higher restated pre-tax profit and net profit for the corresponding first half of 2011.
“Excluding the effects of higher restated profits for the last corresponding period, the group’s pre-tax profit and net profit for the same period recorded double-digit growth of 10 per cent and 10.9 per cent respectively.
“As compared with the first quarter of 2012 (1Q12), the group’s net profit attributable to shareholders for the second quarter grew by RM11.9 million or 1.3 per cent to RM953 million.
“The group maintained its pole position amongst the Malaysian banking groups in terms of profitability with the highest net return on equity of 24.7 per cent.
“Its asset quality and cost efficiency continued to be the best amongst its domestic banking peers with the lowest gross impaired loan ratio of 0.8 per cent and cost-to-income ratio of 31.4 per cent. ”
The group’s gross loans increased at an annualised rate of 10.8 per cent in the 1H12 to reach RM187.3 billion as at the end of June 2012. In particular, domestic loans grew at a stronger annualised rate of 12.3 per cent.
This was broadly in line with the full-year forecast of 13.1 per cent by the research arm of Kenanga Investment Bank Bhd’s (Kenanga Research), in which loans growth in 2H12 would ‘catch up’ to compensate for the decent overall growth for 1H12.
The group’s profit after tax of RM963.6 million for 2Q12 had exceeded Kenanga Research’s forecast of RM850 million, a spokesman for the research division said to The Borneo Post via telephone yesterday.
“The group’s loans growth is largely driven by the household and personal finance segment while being strongly supported by the small and medium enterprise (SME) segment,” he said.
Teh highlighted, “The group’s domestic market share of residential mortgages, commercial property financing and passenger vehicles financing rose to 18.5 per cent, 33.3 per cent and 26.2 per cent respectively as at the end of May 2012 from 18.1 per cent, 32.9 per cent and 25.9 per cent as at beginning of the year.”
“The group’s SME lending segment continues to strengthen, with loans to SME growing strongly at an annualised rate of 23.7 per cent in the first half of 2012.”
Despite the strong loan growth, the group’s loan impairment allowances decreased by 13 per cent, directly attributed to the continued improvement in asset quality as a result of the group’s prudent credit policies and effective credit monitoring, as evidenced by the its low gross impaired loan ratio of 0.8 per cent, compared to the Malaysian banking industry’s ratio of 2.4 per cent.
“The Public Bank Group remained the most cost-efficient bank in Malaysia with its cost-to-income ratio of 31.4 per cent, well below the banking industry’s average cost-to-income ratio of 46 per cent,” Teh emphasised.
The group’s unit trust management business carried out through its wholly-owned subsidiary, Public Mutual, remained the market leader in the private unit trust industry with an overall market share of 43 per cent as at the end of May 2012 whilst its market share in equity funds and Islamic funds stood at 61 per cent and 56 per cent respectively.
In view of the group’s performance, the board of directors declared a first interim single-tier dividend of 20 per cent, which would result in a total dividend payout of RM700 million; this was on par with Kenanga Research’s payout forecast in an earlier research report.
With regards to the group’s prospects, Teh said, “The Malaysian economy is expected to remain resilient despite ongoing external uncertainties from the euro debt crisis, with gross domestic product anticipated to grow between four and five per cent in 2012 driven by domestic demand and private investments.
“The group will remain focused on its core retail banking and financing business whilst maintaining its prudent credit and sound risk management policies as well as strong corporate governance to support long-term sustainable growth.”