KUCHING: Public Bank Bhd (Public Bank) announced yesterday that it achieved a 23-per cent growth in pre-tax profit to RM4.09 billion as at December 31 last year – surpassing the RM4 billion threshold for the first time.
The group’s net profit was RM3.05 billion – 21 per cent higher than the RM2.52 billion level attained in 2009.
In his statement yesterday, the bank’s founder and chairman Tan Sri Dr Teh Hong Piow said the group’s improved financial performance was mainly driven by the strong growth in net interest and finance income as well as higher non-interest income, coupled with lower loan impairment allowances.
“Supported by strong organic growth in loans and core customer deposits, the group’s net interest and finance income increased by RM638 million, or 14 per cent, in 2010 as compared to 2009. Non-interest income, which recorded a commendable growth of 19 per cent, was supported by higher fee income generated by the group’s unit trust and foreign exchange businesses,” Teh added.
On a quarterly basis, Public Bank continued to surpass the RM1-billion quarterly profit mark by recording a pre-tax profit of RM1.13 billion in the fourth quarter. This represented a strong growth of eight per cent against the pre-tax profit of RM1.05 billion in the preceding third quarter.
Similarly, net profit attributable to shareholders for the quarter also grew by eight per cent to RM846 million.
“The group’s results translated into improved earnings per share of 87.2 sen, and higher net return on equity of 27.1 per cent in 2010, as compared with 26.1 per cent in previous year,” Teh pointed out.
As at December 31 last year, Public Bank’s total assets increased to RM226.3 billion, while total loans retained its strong momentum with a 13.8 per cent growth to reach RM156.5 billion.
“The group’s loan loss coverage of 143.5 per cent remains one of the highest and mostprudent in the Malaysian banking industry,” said Teh.
Specifically, domestic loans grew at a stronger rate of 15.6 per cent leading to a higher market share of the domestic lending business of 16.2 per cent as at the end of November last year, against 15.9 per cent as at the beginning of the year.
“The bank’s lending activities remained focused on the retail sector which accounted for 85 per cent of its total loan portfolio. For 2010, the group continued its strong support of the government’s effort to promote small and medium enterprise (SME) activities, particularly for working capital and investment financing.
“Total loan approvals of RM10.8 billion to domestic SMEs accounted for a sizeable 21 per cent of the group’s total domestic loans approved of RM51 billion during the year,” Teh highlighted.
Meanwhile, Public Bank’s overseas operations recorded a 30 per cent improvement in earnings, due mainly to the decline in loan impairment allowances and overall improved business sentiments in the region.
In particular, the Hong Kong operations achieved a marked improvement of 75 per cent growth in pre-tax profit for the year, and contributed to over five per cent of the overall group’s profit. Cambodian Public Bank Plc, a wholly-owned subsidiary of Public Bank, recorded a marginal profit improvement and a strong customer deposit growth rate of over 29 per cent for the year.
“The group’s expansion plan in its overseas operations remains focused on its Hong Kong and Cambodian operations. It currently has a network of 81 branches in Hong Kong and three branches in Shenzhen in the People’s Republic of China. Cambodian Public Bank is one of the largest banks in Cambodia by balance sheet size, presently having a total of 21 branches,” related Teh.
In view of the bank’s strong performance for the year, its board of directors had declared a second interim cash dividend of 25 sen less 25 per cent tax, and a single tier dividend of eight sen. Together with the first interim dividend of 25 sen, paid in August last year, the total gross dividend for the year would be 58 sen.
“The total net dividend paid and payable for 2010 amounts to RM1.59 billion and represents a total payout of 52 per cent of the group’s net profit for the year. No final dividend, however, was proposed by the board of directors for 2010,” the chairman added.