Public Bank achieves pre-tax profit of RM7.10 billion for 2018

KUCHING: The Public Bank Group continued to sustain stable profitability and a healthy balance sheet growth for financial year 2018, achieving a pre-tax profit of RM7.10 billion in 2018.

The group in a statement yesterdaysaidnetprofitattributable to shareholders increased by 2.2 per cent to RM5.59 billion in 2018 from RM5.47 billion achieved in 2017

Tan Sri Dr. Teh Hong Piow, the Founder, Chairman Emeritus, Director and Adviser of Public Bank,2018 was marked by a more moderate economic growth, with increased headwinds on both global and domestic front and banks were faced with a more challenging business climate.

“Against this backdrop, the Public Bank Group was able to sustain stable profitability due to its continuous efforts to drive its loans and deposits business, coupled with the group’s strong asset quality and prudent cost management.”

“With that, the group continued to sustain its leading position amongst domestic banks with lowest gross impaired loan ratio of 0.5 per cent and most efficient cost-to-income ratio of 33.0 per cent, leading to net return- on- equity ratio of 14.8 per cent for 2018,” added Teh.

With the stable financial performance, Teh was pleased to announce a second interim dividend of 37 sen per share.

“The second interim dividend will be paid on 14 March 2019 based on the dividend entitlement date of March 7, 2019.

“Together with the first interim dividend of 32 sen per share, the full year dividend for 2018 amounts to 69 sen. This represents a total dividend payout of RM2.7 billion and 47.9 per cent of the Group’s net profit for 2018.”

For 2018, the Public Bank Group achieved a healthy loans growth of 4.2 per cent. The group’s lending strategy remained focused on consumer financing for the purchase of residential properties and passenger vehicles, as well as extension of credit to small and medium enterprises for purchase of commercial properties and working capital.

The group continued to retain leading market share of 19.8 per cent for residential property financing and 35.2 per cent for commercial property financing.

The Public Bank Group’s total customer deposits achieved a total growth of 6.2 per cent to RM339.2 billion in 2018. This deposit growth contributed to the Group’s strong funding position, as reflected in its gross loan to fund and equity ratio of 79 per cent as at the end of 2018.

Teh said, “The competition for loans and deposits in the banking sector was highly intense in 2018. However, the Public Bank Group continued to uphold prudent credit assessment, so as to preserve its asset quality and protect its returns, while sustaining its market position.”

Arising from heightened volatility in the global financial market and the more cautious sentiment in the macro environment, growing fee-based business had been a challenge in 2018. However, the Public Bank Group’s unit trust and banking transaction businesses continued to generate positive fee income growth for the Group.

“Public Mutual, Public Bank’s whol ly- owned subsidiary, remained a major contributor to the Public Bank Group’s noninterest revenue.

“In 2018, Public Mutual remained the market leader in the domestic private unit trust business, as it continued to capture largest retail market share of 37.2 per cent, with a total of 147 unit trust funds which amounted to a net asset value of RM78.7 billion under its management.”

As at the end of 2018, the Public Bank Group’s capital position remained at healthy levels. After payment of the second interim dividend, the Group’s common equity Tier 1 capital ratio, Tier 1 capital ratio and total capital ratio will stand at 13.1, 13.7 and 16.3 per cents respectively.

Teh commented, “The Public Bank Group monitors closely its capital position to ensure its capital level complies with regulatory requirement, while sufficient capital resources and buffers are available to support business growth and pursue strategic business opportunities.”