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This article first appeared in The Edge Financial Daily on February 23, 2018

KUALA LUMPUR: Public Bank Bhd founder and chairman Tan Sri Dr Teh Hong Piow cautions that there is potential downside pressure emanating from the continued low consumer sentiment and uncertainties lingering on the global economy, even as domestic economic prospects have improved.

“However, the group is confident that its solid business model building on an 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,” Teh commented in a statement yesterday after the release of the banking group’s quarterly results.

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

The banking group, whose share price closed at a record high of RM22.28 yesterday, declared an interim dividend of 34 sen per share — the highest since 2008.

This brings the total dividend for the financial year ended Dec 31, 2017 (FY17) to 61 sen per share, or RM2.36 billion in total, representing 43.1% of the group’s annual net profit of RM5.47 billion for FY17.

The group’s net profit grew a marginal 0.18% to RM1.49 billion in the fourth quarter ended Dec 31, 2017 (4QFY17), from RM1.48 billion a year ago.

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

Its earnings growth was partially offset by higher operating overheads in line with a higher business volume and higher loan impairment allowances, it said.

The group also declared a second interim dividend of 34 sen per share for FY17, payable on March 23.

For FY17, the group’s annual net profit expanded 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 yesterday, Public Bank said its profit was mainly supported by continued loan and customer deposit 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.

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