KUALA LUMPUR: Public Bank Bhd is expected to maintain its earnings momentum for the rest of the year after posting a double-digit growth in its third quarter ended September 30.
Its net profit for the quarter rose 13.8 per cent year-on-year to RM1.19 billion from RM1.05 billion previously, while revenue grew 11.7 per cent to RM4.32 billion from RM3.87 billion.
For the nine-month period ended September 30, the bank’s pre-tax profit was 7.0 per cent higher year-on-year to RM4.25 billion.
Its net profit attributable to shareholders increased 7.4 per cent to RM3.26 billion.
In the same period, Public Bank recorded an efficient cost-to-income ratio of 30.7 per cent. It maintained a low gross impaired loan ratio of 0.7 per cent and continued to record the highest net return on equity of 20 per cent.
Overseas operations contributed 7.5 per cent to the bank’s overall pre-tax profit for the nine months. It also completed its renounceable rights issue exercise in August, which had raised RM4.8 billion equity capital.
Public Bank founder and chairman Tan Sri Teh Hong Piow said the bank’s favourable performance in the third quarter was mainly due to the increase in operating revenue.
“This was a result of net interest income growth and steady non-interest income growth, coupled with stable credit costs.
“The increase in net interest income in the current quarter was attributable to the commendable loan and deposit growth, positive impact arising from the hike in the Overnight Policy Rate and the recently completed rights issue,” Teh said in a statement to Bursa Malaysia yesterday.
He said growth sentiment had been moderating, especially towards the third quarter, although the economy was relatively stable for the first nine months.
Despite facing the challenging operating environment, Public Bank continued to perform well, particularly in domestic commercial banking operations, with commendable double-digit annualised loan growth of 10.2 per cent, outpacing the banking system’s 6.9 per cent.
He said the bank’s annualised customer deposits growth for its domestic commercial operations was also strong at 11 per cent, significantly surpassing the banking system’s four per cent.
Teh said the positive results reinforced the bank’s commitment to pursuing organic growth strategy in the core retail banking business.
“Our strategies remain unchanged. The group will continue to focus on its core retail banking and financing business while maintaining prudent credit policies, as well as upholding strong corporate governance.
“The group will leverage on its strong Public Bank brand and its efficiently-run and wide-reach branch network, as well as its delivery of excellent customer service, to provide sustainable long-term growth.”
Teh expected the net interest margin compression to persist as the competition for both loan and deposit market share remained intense.