Thursday 28 Mar 2024
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This article first appeared in The Edge Financial Daily on October 26, 2018

KUALA LUMPUR: Public Bank Bhd saw net profit for its third quarter ended Sept 30, 2018 (3QFY18) slip by 1.5% to RM1.38 billion from RM1.4 billion a year ago, due to the absence of a one-off capital gain on investment as seen in the previous corresponding quarter, higher operating expenditure (opex) and lower gains from financial instruments.

This was despite net interest income inching up 0.71% year-on-year (y-o-y) to RM1.88 billion in 3QFY18, while allowance for impairment on loans, advances and financing declined by 43% to RM48.88 million.

This resulted in the banking group’s earnings per share falling to 35.6 sen for the quarter under review, from 36.4 sen a year ago. Its lower earnings were attributed to a one-off capital gain on investment of RM42.9 million a year ago.

In a statement yesterday, Public Bank founder and chairman Tan Sri Teh Hong Piow said the group will continue to uphold profitability growth as the business environment sees rising uncertainties, driven largely by its organic growth strategy in its loans and deposits businesses, coupled with its strong and stable asset quality and cost-efficiency.

“These enable the group to continue delivering a leading set of financial performance indicators among its peers, with its net return on equity standing at 14.7%, cost-to-income ratio at 33% and gross impaired loans ratio at 0.5%,” Teh said.

Public Bank’s interest expense rose 7.06% y-o-y to RM2.27 billion for 3QFY18, while fee and commission expense increased 2.36% to RM212.81 million. Meanwhile, other operating expenses went up by 5.2% to RM889.73 million in the same period.

The group’s net gain from financial instruments, however, shrunk by 67.3% to RM17.41 million for 3QFY18.

It also reported operating revenue rising 5.88% to RM5.62 billion, from RM5.31 billion in 3QFY17.

Cumulatively, the group’s net profit for the nine months to Sept 30, 2018 (9MFY18) was 5% higher at RM4.19 billion or 108.17 sen per share, as compared with RM3.98 billion or 103.19 sen per share a year earlier.

Revenue for the period grew 5.8% to RM16.41 billion, from RM15.51 billion in 9MFY17.

Moving forward, Public Bank said it will continue to be supported by ongoing demand for financing for residential properties, commercial properties and passenger vehicles, as well as lending to small and medium enterprises.

Amid intensified market uncertainties, Public Bank said its treasury operations will remain vigilant and exercise caution in its execution of growth strategy.

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