Malaysian pub­lic bank ex­pects ris­ing com­pe­ti­tion

The Pak Banker - - Company& -

KUALA LUMPUR: Pub­lic Bank Bhd said it ex­pects to meet its loan growth tar­get of 14% this year but warned that in­creas­ing com­pe­ti­tion in home mort­gages, its largest busi­ness, would hurt net in­ter­est mar­gins go­ing for­ward.

In­creas­ing com­pe­ti­tion in home mort­gages will in­evitably re­sult in some com­pres­sion of the net in­ter­est mar­gin go­ing for­ward, said founder and chair­man Tan Sri Teh Hong Piow.

He added that the com­pres­sion was man­age­able. More than half of the com­pany's pre-tax profit comes from its home loans busi­ness, ac­cord­ing to an­a­lysts.

In the first nine months this year profit from the seg­ment rose 26%. Pub­lic Bank will con­tinue to keep its credit cost and over­heads low to man­age the com­pres­sion in net in­ter­est mar­gin, Teh said in an e-mailed in­ter­view.

Malaysian banks, in­clud­ing Malayan Bank­ing Bhd and CIMB Group Hold­ings Bhd, have re­ported strong earn­ings this year as the eco­nomic re­cov­ery has spurred in­creased bor­row­ing, greater cap­i­tal mar­ket ac­tiv­i­ties and a rise in spend­ing.

This has led to a fierce com­pe­ti­tion among the do­mes­tic banks for a larger share of the lu­cra­tive home and car loans mar­ket.

How­ever, with hot money flow­ing to emerg­ing mar­kets, cen­tral banks in the re­gion have taken steps to tighten mort­gage rules that may af­fect loan growth for banks.

Bank Ne­gara re­cently im­ple­mented a 70% loan-to­value ra­tio for those buy­ing their third prop­erty. -PB News

GHAZIBAROTHA: Corp Com­man­der Peshawar Asif Yaseen, Amer­i­can Am­bas­sador Cameron P. Mun­tar and Bri­gadier Gen­eral Na­gata sit­ting for a group photo dur­ing the de­par­ture cer­e­mony of US Mil­i­tary Hu­man­i­tar­ian As­sis­tance Mis­sion team which was here to as­sist Pak­istan to curb the prob­lems cre­ated due to the flood, at Ghazi Air Base. -On­line

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