Public Bank breaks RM7b barrier
Published on: Tuesday, April 24, 2018
Kuala Lumpur: The Public Bank Group achieved yet another profit milestone in 2017 with profit before tax of RM7.12 billion, crossing the RM7 billion mark for the first time. This represents a 8.6pc growth as compared to RM6.55 billion in 2016. Net profit attributable to shareholders grew by 5.1pc to RM5.47 billion in 2017. As a result, earnings per share increased to 141.7 sen in 2017.""The favourable performance of the Public Bank Group in 2017 was attributed to the healthy loans and deposits growth, coupled with the strong asset quality and sustained cost efficiency.
ADVERTISEMENT
As a result, the Group maintained its leading position amongst domestic commercial banking groups in Malaysia with the highest net return on equity of 15.8pc, most efficient cost to income ratio of 31.9pc and best asset quality with the lowest gross impaired loans ratio of 0.5pc," said its Founder-Chairman, Tan Sri Teh Hong Piow.Teh said in view of the Group's favourable performance in 2017, a second interim dividend of 34 sen was paid on 23 March 2018. Together with the first interim dividend of 27 sen paid in August 2017, the shareholders would have received a total dividend of 61 sen per share for 2017.The total dividends paid for 2017 was RM2.36 billion, representing a payout of 43.1pc of the Group's net profit for 2017.The Public Bank Group's loans growth was mainly attributed to the lending growth in its retail consumer and commercial banking segment, comprising financing for the purchase of residential properties and extension of credits to small and medium enterprises.
ADVERTISEMENT
He highlighted that the Public Bank Group's loans and deposits increased by 3.6pc and 3.0pc respectively in 2017. Domestic loans increased at a faster pace of 4.6pc, higher than the domestic industry's growth rate of 4.1pc.
ADVERTISEMENT
Meanwhile, domestic customer deposits expanded by 3.6pc.He further added Public Bank remained the market leader in the financing of residential properties, commercial properties and passenger vehicles with market shares of 19.6pc, 35.5pc and 28.5pc respectively. In terms of deposits, the Group's strong retail franchise and large domestic depositor base of over six million customers underpin the Group's customer deposits growth.With the steady inflows of customer deposits, the Group remained well funded with a healthy gross loan to fund and equity ratio of 80.7pc as at the end of 2017."The Public Bank Group continues to rank No. 1 in terms of asset quality amongst Malaysian banking groups with the lowest gross impaired loans ratio of 0.5pc as at the end of 2017, significantly better than the banking industry's gross impaired loans ratio of 1.5pc," he said.As at the end of 2017, the Group's loan loss coverage ratio stood at 95.5pc which was higher and more prudent than the banking industry's loan loss coverage ratio of 82.9pc. With the inclusion of regulatory reserves, the loan loss coverage ratio of the Group would be significantly higher at 256.5pc.The Public Bank Group's overseas operations posted a 10.8pc growth in pre-tax profit to RM687.8 million in 2017, contributing 9.7pc to the Group's pre-tax profit in 2017. The Group's overseas operations remained focused in the Hong Kong and Indo-China market, where the Group has established its footprint for more than 20 years.Since the transformation of Public Bank Vietnam Limited ("PBVN") from a joint venture bank to a 100pc foreign-owned bank in Vietnam in April 2016, the Group has further expanded its business in Vietnam by opening six new branches in 2017. To date, PBVN has 13 branches and is planning to open more branches in 2018.Non-interest income remained a significant source of revenue complementing the Group's net interest income. In 2017, the Group's non-interest income increased at a commendable rate of 11.3pc. This was mainly contributed by higher income from its unit trust businesses, higher investment income as well as increased contribution from its stock broking and bancassurance business. Teh commented the Group will continue to place emphasis on growing its fee-based revenue through product innovation and cross-selling initiatives."The Group's unit trust management business undertaken by its wholly-owned subsidiary, Public Mutual Berhad ("Public Mutual"), continued to contribute positively to the non-interest income growth of the Group. Public Mutual reported an impressive pre-tax profit growth of 15.4pc to RM660.9 million in 2017 and remained the market leader with an overall retail market share of 40.9pc in the private unit trust business. In 2017, Public Mutual's total assets under management increased by 15.9pc to RM81.44 billion with 141 funds under its management as at the end of 2017," he said.The Public Bank Group's capital position remained healthy with its common equity Tier I capital ratio, Tier I capital ratio and total capital ratio standing at 12.2pc, 13.0pc and 16.0pc respectively as at the end of 2017, after deducting second interim dividend.He said that Public Bank will continue to proactively manage its capital to ensure that the Group's capital position remains healthy to support the Group's business growth strategies whilst optimising its shareholders' return.The Public Bank Group is committed to deliver consistent returns to its shareholders and enhancing the long-term value of its shareholders' investment."If a shareholder of Public Bank had bought 1,000 shares in Public Bank when it was listed in 1967, and assuming the shareholder had subscribed for all rights issues to date and had not sold any of the Public Bank shares, he would have 148,938 Public Bank shares worth RM3.5 million as at today. In addition, he would have received a total gross dividend of RM1.3 million. This translates into a total value of RM4.8 million, representing a remarkable compounded annual rate of return of 19pc for each of the 50 years since 1967," he highlighted. Stay up-to-date by following Daily Express’s Telegram channel.
Daily Express Malaysia
