Public Bank achieves RM5.31 bln pre-tax profit for 9MFY18

Tan Sri Dr Teh Hong Piow

KUCHING: For the first nine months of 2018, the Public Bank Group continued to make progress despite the challenging operating environment and reported a pre-tax profit of RM5.31 billion, up 2.9 per cent from the corresponding period in 2017.

Net profit attributable to shareholders rose by five per cent to RM4.19 billion from RM3.98 billion recorded in the previous corresponding period.

Founder and chairman of Public Bank, Tan Sri Dr Teh Hong Piow said, “In the environment marked by rising uncertainties and persistent volatility, the Public Bank Group continued to uphold profitability growth, driven largely by its organic growth strategy in its loans and deposits businesses, coupled with its strong and stable asset quality and cost efficiency.

“These enabled the group to continue delivering a leading set of financial performance indicators amongst its peers, with its net return on equity standing at 14.7 per cent, cost-to-income ratio at 33.0 per cent and gross impaired loans ratio at 0.5 per cent.”

For the third quarter of 2018, the group reported a net profit of RM1.38 billion. This reflects a growth of 1.6 per cent from the operational net profit of RM1.36 billion achieved in the previous corresponding quarter, after excluding a one-off capital gain on investment of RM43 million.

The Public Bank Group’s market leadership position in financing for the purchase of residential property, commercial property and passenger vehicles continued to drive the Group’s interest income. In the first nine months of 2018, total gross loans rose by an annualised rate of 4.4 per cent to RM314.5 billion. Domestic loans grew at similar pace at an annualised rate of 4.4 per cent to RM291.6 billion.

On the funding side, the Public Bank Group continued to uphold resilient growth in deposits. Total customer deposits grew at an annualised rate of 6.5 per cent to RM334.9 billion, while domestic deposits rose by an annualised rate of 6.3 per cent to RM307 billion.

In the first nine months of 2018, the Public Bank Group’s non-interest income was largely driven by the Group’s unit trust business, banking transactional income and foreign exchange related business.

The Public Bank Group’s cost-to-income ratio continued to stand at an efficient level of 33 per cent in the first nine months of 2018, as compared to the industry’s cost-to-income ratio of 44.8 per cent.

As at the end of September 2018, the Public Bank Group continued to sustain a low gross impaired loans ratio at 0.5 per cent. Despite its strong asset quality, the group maintained a high loan loss coverage of 110.2 per cent. Including the regulatory reserves of RM2 billion, the loan loss coverage was at 235.8 per cent.

For the first nine months of 2018, the Public Bank Group’s overseas operations contributed 9.5 per cent of the Group’s overall pre-tax profit. Public Financial Holdings Ltd Group in Hong Kong and Cambodian Public Bank Plc remained the largest contributors to overseas operations profit.

As at the end of September 2018, the Public Bank Group’s common equity Tier 1 capital ratio, Tier 1 capital ratio and total capital ratio stood at 12.6 per cent, 13.2 per cent and 15.8 per cent respectively.

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