KUALA LUMPUR (Oct 25): 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 absence of a one-off capital gain on investment in the previous corresponding quarter, higher operating expenses and lower gains from financial instruments.

This was despite net interest income inching up 0.71% year-on-year (yoy) 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.

Public Bank said in an announcement on Bursa Malaysia that the drop in net profit was due to a one-off capital gain on investment of RM42.9 million in 3QFY17.

Public Bank’s interest expense rose 7.06% yoy 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.

The group 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 first 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 in residential properties, commercial properties, passenger vehicles, as well as lending to the small and medium enterprises (SMEs).

“The group will continue to capitalise on its efficient customer service and extensive network to maintain its market position in the domestic retail segment,” the announcement said.

“With focus on sustaining its operational excellence and efficiency, the group continues to adopt prudent and responsible financing practices, while upholding strong corporate governance and compliance culture, as well as sound risk management practices,” it added.

The group remains committed to enhancing access to financing for all SMEs.

“Aside from sustaining market leadership in the SME financing by offering products and services to meet the needs of businesses, the group will also continue to grow its corporate lending business by leveraging on existing clients with good track record and acquire new corporate clients in growth and resilient sectors,” it said.

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

For the unit trust business, the group will continue to introduce new products and enhance its services to meet the diverse needs of its investors.

Meanwhile, Public Bank said it will proactively collaborate with AIA Bhd to enhance its suite of bancassurance products.

“Also, the group will continue to leverage on its wide distribution network to improve customers’ satisfaction and provide relevant product solutions,” it said.

In a statement today, Public Bank’s founder and chairman Tan Sri Teh Hong Piow commented saying 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 enables the group to continue delivering a leading set of financial performance indicators amongst its peers, with its net return on equity standing at 14.7%, cost-to-income ratio at 33.0% and gross impaired loans ratio at 0.5%,” Teh said.