Public Bank chalks up record net profit (Article)

Public Bank chalks up record net profit

PETALING JAYA: Public Bank Bhd’s net profit for the financial year ended Dec 31, 2013 (FY13) leapt to a historic high of RM4.06bil on the back of its annual revenue also jumping 8.5% to RM15.3bil.

The bank, which is the third largest locally and one of the top three in Cambodia, also saw its fourth-quarter net profit rising to RM1.03bil from RM981.8mil previously on the back of the quarterly revenue leaping to RM3.9bil from RM3.6bil in the previous corresponding quarter.

It declared a second interim single-tier dividend of 30 sen per share, bringing total dividends for FY13 to 52 sen per share.

The total dividends paid and payable for 2013 amounts to RM1.82bil and represents a total payout of 44.8% of its net profit.

Founder and chairman Tan Sri Teh Hong Piow (pic) said in a statement that the bank was deeply encouraged that it continued to be at the forefront of the banking industry with favourable financial statistics.

“We (achieved) the highest return on equity of 22.4% while maintaining the lowest gross impaired loan ratio of 0.7% and cost-to-income ratio of 30.7% in 2013,” said Teh.

Apart from that, the group also recorded a healthy double-digit growth of 11.8% and 11.5% in loans and deposits, respectively, while at the same time sustaining its market share in the domestic core lending and deposit-taking business.

Its local operations saw a loans growth of 12%, outpacing the overall domestic banking industry’s growth of 10.6%, with retail lending being its main focus, including the extension of credit mainly to small and medium enterprises, and the purchase of residential property as well as passenger vehicles.

“As at the end of 2013, the group’s retail loan portfolio collectively accounted for 86% of its total loans,” the statement said.

“The strong asset quality in the group’s loans portfolio is demonstrated with the group recording a low gross impaired loan ratio of 0.7% as at the end of 2013, significantly lower as compared with the banking industry’s gross impaired loan ratio of 1.9%,” Teh said in the statement.

Its loan loss coverage ratio, meanwhile, stood at 118.5%, which was higher and more prudent than the banking industry’s average of 107.6%.

Domestic customer deposits grew by 11.6%, which is significantly higher than the domestic banking industry’s deposit growth of 8.5%, underpinned by the inflow of fixed deposits, savings and current accounts, which grew by 14.2%, 8.3% and 17%, respectively.

The group’s capital position remained healthy, with its common equity Tier I capital ratio, Tier I capital ratio and total capital ratio at 8.8%, 10.5% and 13.8%, respectively, as at the end of 2013.

Shortly after the results were announced yesterday, TA Research’s banking analystLi Hsia told StarBiz that on the surface of things, Public Bank’s performance was “within expectations,” especially where the core profit performance matrix was concerned.

Moving forward, Teh said the group’s strategies remained unchanged, with a focus on its key strength in the core retail banking and financing business while maintaining its prudent credit policies, and upholding strong corporate governance to support long-term sustainable growth.