Public Bank 2Q16 earnings up five per cent to RM1.26 billion
KUCHING: Public Bank Bhd’s ( Public Bank) second quarter 2016 ( 2Q16) ended June 2016 earnings grew by five per cent year- on-year ( y- o-y) to RM1.26 billion from RM1.19 billion recorded in 2Q15.
The banking group which announced its 2Q16 financial results yesterday told Bursa Malaysia that 2Q16 revenue increased by six per cent y- o-y to RM5.02 billion from RM4.74 billion generated in 2Q15.
Revenue for the first half of 2016 (1H16) ended June 2016 increased by 7.7 per cent y- o-y to RM10.06 billion from RM9.34 billion generated in 1H15.
Net profit for 1H16 improved by five per cent y-o-y to RM2.49 billion from RM2.37 billion recorded for 1H15.
Meanwhile, Public Bank group’s chairman Tan Sri Teh Hong Piaw in a statementrevealed that The Public Bank Group achieved a pre-tax profit of RM3.20 billion in 1H16, an increase of 6.1 per cent from RM3.02 billion in 1H15.
“Net profit attributable to shareholders amounted to RM2.49 billion, registering an increase of five per cent from the same period last year.
“The improved profitability amid the increasing challenging operating environment shows that the group’s proactive organic growth strategy with prudent banking practices has remained an edge in the competitive banking landscape,” he said.
Additionally, Public Bank noted its improved profit was driven by the group’s continued healthy expansion in loan and deposit businesses, leading to an increase of 9.4 per cent in net interest income.
Public Bank observed that the group’s domestic lending and deposit base have shown resilient performance despite the challenging operating environment, with domestic loans and deposits growing at healthy annualised rates of 8.3 per cent and 7.4 per cent respectively.
Teh added,“The improved net profit performance translated into a net return- on- equity of 16.2 per cent.
“Meanwhile, it also reflects the Public Bank Group’s disciplined cost management, as indicated in the group’s cost-to-income ratio of 32.3 per cent.
“The group also continued to exhibit strong asset quality despite the moderating economic environment, with its gross impaired loan ratio remaining low and stable at 0.5 per cent.”
“In view of the Public Bank Group’s commendable performance, I am pleased to announce that the Board of Directors has declared a first interim dividend of 26 sen, which will result in a total dividend payout of RM1.0 billion.
“The first interim dividend will be paid on August 22 based on the dividend entitlement date of August 12,” Teh said.
Furthermore, Public Bank said the group’s total loans recorded an annualised growth rate of 7.3 per cent to RM283.5 billion in 1H16.
The banking group noted domestic loan grew stronger at an annualised rate of 8.3 per cent, significantly higher than 2.2 per cent annualised growth recorded by the banking industry during the period.
Public Bank pointed out its sustained growth performance in the group’s loan business was attributed to the continued expansion of its retail banking segment, comprising financing for the purchase of residential properties, passenger vehicles, and small and medium enterprises (SMEs).
On the funding side, the Public Bank said the group’s total customer deposits also grew at a healthy annualised rate of 6.9 per cent.
On the domestic front, Public Bank noted the group’s total customer deposits remained on positive momentum, registering a favourable 7.4 per cent annualised growth, as compared to 0.1 per cent growth in the domestic banking industry.
Teh further added,“The group’s funding and liquidity position has remained healthy with its loan-todeposit ratio standing at 90.5 per cent as at the end of June 2016.
“The Public Bank Group continues to widen its revenue stream by growing its non-interest income.
“The group’s non-interest income continued to generate revenue for the group, with the unit trust business, foreign exchange related transactions and fee income from banking operations playing a significant part.
“The group has continued to enhance its cross-selling activities and widen its product offerings, while tapping on the group’s strong retail franchise and extensive delivery channels, to expand our non-interest income,” he said.
Moreover, Public Bank noted the group’s unit trust business, undertaken by its wholly- owned subsidiary, Public Mutual Bhd ( Public Mutual), continued to maintain its market leadership in the private unit trust industry despite the challenging market condition.
The banking group shared that Public Mutual’s retail market share of the Malaysian private sector unit trust industry stood at 49.6 per cent as at the end of May 2016, with 130 funds and a total net asset value of RM67.7 billion under management.
As at the end of June 2016, Public Bank said the group posted a costto-income ratio of 32.3 per cent, significantly better than the banking industry’s average of 48.8 per cent.
“The group has continued to maintain a low cost-to-income ratio despite the prevailing cost pressure faced by industry players,” Teh said.
As at end-June 2016, the Public Bank revealed that the group’s gross impaired loan ratio stood at 0.5 per cent, as compared to the banking industry’s ratio of 1.6 per cent.
For 1H16, Public Bank disclosed that the group’s overseas operations contributed 9.4 per cent to the group’s pre- tax profit.
It explained that Public Financial Holdings Limited Group and Cambodian Public Bank Plc, both subsidiaries of Public Bank, continued to be the main contributors to the group’s overseas business growth, generating pre-tax profit of HK$245 million and US$30 million respectively during the period.
On top of that, Public Bank said Public Bank Vietnam Ltd is in good stead to further strengthen the group’s position in the region, and will continue to explore opportunities in pursuit of revenue growth having become a 100 per cent wholly- owned subsidiary of the group with effect from April 1, 2016.