Public Bank books higher Q4 earnings, proposes 34 sen dividend

PETALING JAYA: Public Bank Bhd’s net profit for the fourth quarter ended Dec 31, 2017 rose marginally to RM1.49 billion from RM1.48 billion in the previous corresponding period, supported by higher net interest income, other operating income and contribution from the Islamic banking business.

Revenue was up by 5.2% from RM5.08 billion to RM5.35 billion.

The group has proposed an interim dividend of 34 sen per share, bringing full-year dividend to 61 sen, representing a dividend payout of 43.1%.

Public Bank’s full-year net profit expanded 5.1% from RM5.21 billion to RM5.47 billion on the back of a 3.8% rise in revenue from RM20.1 billion to RM20.86 billion.

It said in a filing with the stock exchange that the group registered 3.6% loan growth, with domestic lending business growing 4.6%, outpacing the domestic banking industry’s loan growth rate of 4.1%.

Non-interest income, meanwhile, expanded 11.3% in 2017 compared with 2016.

In terms of asset quality, Public Bank’s impaired loan ratio remained low at 0.5%, significantly lower than the industry ratio of 1.5%.

Its loan loss coverage ratio stood at 95.5% as at the end-2017. Including the RM2.4 billion regulatory reserves set aside, the group’s loan loss coverage ratio would be 256.5%, which provides a strong buffer for its adoption of MFRS 9 effective Jan 1, 2018.

Overseas operations’ pre-tax profit increased 10.8% to RM688 million in 2017, contributing 9.7% to the group’s overall pre-tax profit.

Looking ahead, Public Bank founder and chairman Tan Sri Teh Hong Piow expects the banking sector to be generally stable in 2018, but remains cautious on the potential downside pressure emanating from the continued low consumer sentiment and uncertainties lingering in the global economic environment.

“However, the group is confident that its solid business model building on organic growth strategy in the core retail banking and financing business, coupled with its prudent credit policies, as well as strong risk management practices will continue to be the key strengths for the group to strive for higher growth and sustainable profitability.”

On Bursa Malaysia yesterday, Public Bank gained 14 sen or 0.6% to RM22.28 on volume of 6.62 million shares.