KUALA LUMPUR: Public Bank Bhd has posted a net profit of RM4.11 billion for the nine months ended September 30 2019 from RM4.19 billion recorded a year ago on lower net interest margins.
Public Bank’s revenue grew 2.3 per cent to RM16.78 billion.
For the third quarter of this year, the bank registered RM1.36 billion in net profit, slightly lower than RM1.38 billion in the same period last year.
Founder Tan Sri Teh Hong Piow said recent developments in the operating environment posed further challenges to the banking industry.
“While macro headwinds remain, the reduction in overnight policy rate (OPR) in May 2019 had also resulted in the decline in net interest margins for the banking sector, which affected the profit for the first nine months ended September 2019,” Teh said in a statement.
Despite the concerns, he said the bank was able to sustain stable profit performance, mainly on account of the stable interest income from its growing financing and deposit business.
Its profitability was also complemented by its non-interest income which grew by 5.8 per cent in the first nine months of the year, he said.
Public Bank retained its competitive strength, as reflected in its efficient cost-to-income ratio of 34.3 per cent and low gross impaired loans ratio of 0.5 per cent, he added.
In the first nine months of 2019, Public Bank said its total loans rose by an annualised rate of 4.2 per cent to RM327.2 billion.
On the domestic front, the bank’s total loans grew by an annualised rate of 4.4 per cent, higher than the banking system’s annualised loan growth of 3.3 per cent, it added.
Amid the persistence of adverse developments in the macro environment largely stemming from the external front, Teh said the domestic banking sector was likely to continue facing headwinds weighing on revenue growth.
“The bank will maintain a cautious stance amid the growing downside risks. However, this does not hinder the group from pursuing continued business expansion,” he said.
Pockets of opportunities remain for banks to explore in the growing Malaysian and regional economies, Teh said.
These include sustained demand for affordable housing and new growth opportunities arising from the advancement of digital banking.
“Public Bank’s fundamental strength will continue to position the group for future growth and to develop new competitive strength centred on the group’s strategy to continue delivering values to its stakeholders,” he added.