PUBLIC BANK AIMS TO SUSTAIN PROFITABILIT Y
Group banking on strong fundamentals and market position
THE Public Bank group aims to sustain profitability through its organic growth strategy in the core retail business for financial year 2017.
Its founder and chairman Tan Sri Dr Teh Hong Piow said this was also premised on the group’s strong fundamentals and market position.
“The group aims for its loan growth to be broadly in line with market trend and slightly ahead of industry growth.
“Asset quality will continue to be a key strength for the group to focus on with the target of gross impaired loans ratio be sustained at less than one per cent this year,” he said.
The group remained committed to sustaining its prudent cost management practice with a cost-to-income ratio target of 33 to 34 per cent, said Teh.
“Interest margins for the year are expected to remain under pressure amid the ongoing intense competition for loans and deposits growth, and increased cost of funds.
“Nevertheless, the group will continue to work harder to increase business volumes to cushion the compression of margin,” he said.
In achieving targets, Teh said the operating environment and competitive banking landscape are the major challenges facing the Public Bank group.
“The group will stay focused on the pursuit of achieving its financial targets.
“It will also remain committed to strengthening competitive advantage in operational efficiency and maintain superior customer service to stay ahead of the curve,” he added.
According to Teh, increasing challenges, including rising prices and a weak ringgit had been weighing on consumer and business sentiments, which in turn impacted banking business growth.
“However, the overall Malaysian economy will remain on a positive trajectory despite the presence of headwinds, as domestic demand continues to be the impetus driving domestic economic activities,” he said.
Ongoing wage growth and the stable labour market continued to support domestic spending, Teh said.
For the second quarter ended June 30, Public Bank’s profit before tax improved to RM1.74 billion from RM1.55 billion previously.
Teh said the group’s financial strength was also attributed to its strong asset quality and efficient cost management as reflected in its gross impaired loan ratio of 0.5 per cent and cost-toincome ratio of 33.8 per cent as at end of last month.
“The focus on financing for the purchase of residential properties, passenger vehicles and lending to small and medium enterprises has remained a market niche for the group, as it maintained a large market share in these lending segments despite the still challenging lending market.
“When rising costs continue to pose earnings pressure, the group’s long-embedded practices of good cost management has remained a competitive advantage in sustaining profitability,” he added.
As at end of last month, the Public Bank group posted a costto-income ratio of 33.8 per cent. This was significantly better than the banking industry’s average of 45.8 per cent. Bernama