KUALA LUMPUR (Feb 22): Public Bank Bhd’s net profit grew by a marginal 0.18% to RM1.49 billion in the fourth quarter ended Dec 31, 2017 (4QFY17) from RM1.48 billion a year ago, mainly due to higher net interest income, net fee and commission income, income from Islamic banking business and other operating income.

These were partially offset by higher operating overheads in line with higher business volume and higher loan impairment allowance, it said.

Earnings per share rose slightly to 38.47 sen in 4QFY17 from 38.4 sen in 4QFY16. Quarterly revenue was also up 5.2% to RM5.35 billion from RM5.08 billion in 4QFY16.

The group also declared a second interim dividend of 34 sen per share for the financial year ended Dec 31, 2017 (FY17), payable on March 23. This brings total dividends for the year to 61 sen per share or a total of RM2.36 billion, which represents 43.1% of the group’s net profit for 2017.

For the full FY17, the group's net profit increased 5.1% to RM5.47 billion from RM5.21 billion a year ago, while revenue rose 3.8% to RM20.86 billion from RM20.1 billion.

In a filing with Bursa Malaysia today, Public Bank said its profit was mainly supported by continued loans and customer deposits growth coupled with stable asset quality. Gross loans grew by 3.6% to RM304.5 billion as at Dec 31, 2017 compared with RM294 billion a year ago, mainly driven by growth in property financing, lending to small and medium enterprises and corporate lending.

In a separate statement, Public Bank founder and chairman Tan Sri Dr Teh Hong Piow said the group sustained a steady loan growth momentum at a rate of 3.6% in FY17.

"Domestic lending business grew by 4.6% over the same period, outpacing the domestic banking industry’s loan growth rate of 4.1%. The group’s loan 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," he added. 

Public Bank’s total customer deposits also grew by 3% in FY17, mainly attributed to the steady inflow of core deposit comprising fixed deposits, low-cost savings and current accounts, which grew by 4.5%.

The group's gross loan to fund and equity ratio stood at 80.7% as at the end of 2017. Its cost-to-income ratio, meanwhile, came in at 31.9%, lower than the banking industry’s average cost-to-income ratio of 45.8%.

Moving forward, Public Bank said it will continue to adopt prudent and responsible lending practices while upholding a strong corporate governance and compliance culture, as well as maintaining operational excellence and sound risk management practices.

“Growing fee-based revenue remains as a key strategic focus of the group,” said Teh.

On prospects, Teh said the banking sector outlook is expected to be generally stable this year.

"While acknowledging the improved prospects in the overall economy, Public Bank Group remains cautious on the potential downside pressure emanating from the continued low consumer sentiments and uncertainties lingering in the global economic environment.

"However, the group is confident that its solid business model building on organic growth strategy in the core retail banking and financing business, coupled with its prudent credit policies, as well as strong risk management practices will continue to be the key strengths for the group to strive for higher growth and sustainable profitability," he added.

Public Bank shares ended the morning session up 6 sen or 0.27% at RM22.20, with 1.59 million shares done, bringing a market capitalisation of RM85.73 billion.