Public Bank net falls to RM1.33b

KUALA LUMPUR: Public Bank Bhd’s net profit eased to RM1.33 billion in the second quarter, compared with RM1.40 billion a year earlier, due to negative effects from the 0.25 per cent reduction in Overnight Policy Rate (OPR).

Revenue, however, rose to RM5.60 billion from RM5.44 billion year-on-year.

For the first half, Public Bank recorded a lower net profit of RM2.74 billion against RM2.80 billion year-on-year, while revenue rose to RM11.17 billion from RM10.79 billion previously.

“The economic and banking environment was increasingly challenging. Domestic banks were faced with a decline in net interest margins, arising from the reduction of OPR in May, which affected the half-year profit ended June 30,” said chairman emeritus Tan Sri Dr Teh Hong Piow in a statement yesterday.

However, he said Public Bank was able to sustain stable profitability supported by its healthy loans and deposits growth, stable asset quality and prudent cost management.

Public Bank continued to sustain a stable gross impaired loans ratio of 0.5 per cent and efficient cost-to-income ratio of 34.2 per cent, leading to a continued resilient net return-on-equity of 13.6 per cent in the first half.

Its total loans grew favourably by an annualised rate of four per cent to RM323.7 billion in the first half. Domestic loans, which covered more than 90 per cent of the group’s loan portfolio, grew by an annualised rate of 4.3 per cent, which was higher than the banking system’s annualised loan growth of 2.7 per cent.

On the funding side, the group achieved a healthy deposit growth, registering an annualised growth of 5.9 per cent to RM349.1 billion, with domestic deposits rising 5.7 per cent in the first half.

As at end of June, its funding position remained stable with a healthy gross loan to fund and equity ratio of 78.9 per cent and continued to achieve a low gross impaired loan ratio of 0.5 per cent.