KUALA LUMPUR: Public Bank Bhd’s net profit rose 5.03 per cent to RM4.18 billion in the first nine-month of 2018 from RM3.98 billion a year ago.
Group revenue for the period increased 5.80 per cent to RM16.41 billion from RM15.51 billion, Public Bank said yesterday.
Public Bank founder and chairman Tan Sri Dr. Teh Hong Piow said it continued to uphold profitability growth, driven largely by its organic growth strategy in its loans and deposits 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 amongst its peers, with its net return on equity standing at 14.7 per cent, cost-to-income ratio at 33.0 per cent and gross impaired loans ratio at 0.5 per cent,” he said in a statement today.
He added that the banking 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-month 2018, Public Bank’s total gross loans rose by an annualised rate of 4.4 per cent to RM314.5 billion, while domestic loans grew at similar pace at an annualised rate of 4.4 per cent to RM291.6 billion.
On the funding side, Public Bank group’s total customer deposits grew at an annualised rate of 6.5 per cent to RM334.9 billion, while domestic deposits rose by an annualised rate of 6.3 per cent to RM307.0 billion.
“As a result of this performance, coupled with the Public Bank group’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 2018,” Teh said.
Public Bank group’s non-interest income was largely driven by the its unit trust business, banking transactional income and foreign exchange related business.
“Public Mutual, the Public Bank Group’s wholly-owned unit trust management subsidiary, remained the largest contributor to the group’s non-interest income,” he said.
For the first nine months of 2018, Public Mutual recorded a pre-tax profit of RM509 million, 5.3 per cent higher as compared to the same period last year.
The banking group’s cost-to-income ratio continued to stand at an efficient level of 33.0 per cent in the first nine months of 2018, as compared to the industry’s cost-to-income ratio of 44.8 per cent.
“Amid rising cost pressure, the Public Bank group has been able to sustain the lowest cost-to-income ratio as compared to 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 end of September 2018, 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 Malaysian economy will continue to remain on steady growth trajectory, citing that the domestic financial system - the backbone of the economy - has remained resilient to support growth.
Meanwhile, Public Bank’s net profit in the third-quarter (Q3) decreased 1.43 per cent to RM1.38 billion from RM1.40 billion due to the absence of 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,” it added.
Public Bank’s quarterly revenue grew 5.83 per cent to RM5.62 billion from RM5.31 billion a year ago.