PUBLIC BANK’S 9-MONTH PROFIT RISES

Results driven by organic growth in loan and deposit businesses, says Teh

PUBLIC Bank Bhd’s net profit rose five per cent to RM4.19 billion in the first nine months of the year, from RM3.98 billion a year ago.

Group revenue for the period increased 5.8 per cent to RM16.41 billion from RM15.51 billion, said Public Bank yesterday.

Founder and chairman Tan Sri Dr Teh Hong Piow said the bank continued to uphold profitability growth, driven largely by organic growth strategy in its loan and deposit businesses, coupled with strong and stable asset quality and cost efficiency.

“These enabled the group to continue delivering a leading set of financial performance indicators among its peers, with its net return on equity standing at 14.7 per cent, cost-to-income ratio at 33 per cent and gross impaired loans ratio at 0.5 per cent,” he said in a statement yesterday.

Teh said the group’s financing for the purchase of residential property, commercial property and passenger vehicles continued to drive the group’s interest income.

For the first nine months, Public Bank’s total gross loans rose 4.4 per cent to RM314.5 billion, while domestic loans grew at a similar rate to RM291.6 billion.

Total customer deposits grew 6.5 per cent to RM334.9 billion, while domestic deposits rose 6.3 per cent to RM307 billion.

“As a result of this performance, coupled with Public Bank’s prudent liquidity management, the group sustained a healthy gross loan to fund and equity ratio of 79.4 per cent as at the end of September,” said Teh.

Public Bank’s non-interest income was largely driven by the its unit trust business, banking transactional income and foreign exchange related business.

“Public Mutual, the group’s whollyowned unit trust management subsidiary, remained the largest contributor to the group’s non-interest income.”

For the first nine months, Public Mu- tual recorded a pre-tax profit of RM509 million, 5.3 per cent higher than the same period last year.

The banking group’s cost-toincome ratio continued to stand at an efficient level of 33 per cent in the first nine months, compared with the industry’s of 44.8 per cent.

“Amid rising cost pressure, the Public Bank group has been able to sustain the lowest cost-to-income ratio compared with its peers.

“This testifies to the group’s ongoing effective measures in driving cost efficiency. This has also enabled greater capacity for the group to pursue its growth strategy,” he said.

As at the end of last month, the group kept a low gross impaired loans ratio of 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.

Teh said the economy would continue to remain on a steady growth trajectory with the domestic financial system’s resilience supporting growth.

Meanwhile, net profit in the third quarter decreased 1.43 per cent to RM1.38 billion from RM1.40 billion due to the absence of the one-off capital gain investment of RM43 million.

“The growth in the operational pre-tax profit was also mainly due to lower loan impairment allowance, higher income from Islamic banking business and higher net interest income.

“These were partially offset by higher other operating expenses and lower foreign exchange income,” said the bank.

Public Bank’s revenue grew 5.83 per cent for the quarter to RM5.62 billion from RM5.31 billion a year ago.

Amid rising cost pressure, the Public Bank group has been able to sustain the lowest cost-toincome ratio compared with its peers. TAN SRI DR TEH HONG PIOW

Public Bank founder and chairman