‘Public Bank’s main value proposition is conservativeness’

KUCHING: Analysts believe Public Bank Bhd’s ( Public Bank) main value proposition is the group’s conservativeness which bodes well in this current period of external uncertainty.

According to the research arm of MIDF Amanah Investment Bank Bhd ( MIDF Research), Public Bank’s main value proposition is the group’s conservativeness which lead to the best asset quality in the industry.

“While this conservative approach does appear that the group sacrifice some growth and higher yielding assets, it ensures that the (group) is able to maintain its profitability at a steadier pace,” MIDF Research said.

“We believe that the management conservatism bodes well for current period of external uncertainty as its stable asset quality should mean that it will be able to weather any economic shocks.”

“Moreover, we believe that the group will stand to benefit for being retail- centric.”

On Public Bank continuing to invest heavily on the group’s digital platform, MIDF Research believed that such investments are necessary to ensure that Public Bank remains apace with the group’s peers in the digital landscape.

“While in our opinion it is not a leader in the digital offering, it is abreast with some of its peers.”

The research arm of Kenanga Investment Bank Bhd ( Kenanga Research) highlighted that moving into 2019, management’s focus will be on defending asset quality as external and internal challenges are still prevalent.

Kenanga Research believed that while management stressses on balancing growth with escalating costs of funds, management will strive for shoring Public Bank’s deposits ahead.

“Thus, downside pressure on net interest margin ( NIM) will likely prevail,” the research arm said.

“While Public Bank’s focus will still be on residential properties and hire- purchase, its asset- quality centric will see challenging growth from these segments.”