KUALA LUMPUR (Apr 20): Public Bank Bhd's first quarter net profit rose 15% from a year earlier on higher net interest besides net fee and commission income. Lower bad loan allowance also supported profit growth.

Higher operating expenses as staff cost increased had, however, curbed profit growth, Public Bank (fundamental:2.8; valuation: 1.5) said in a filing with Bursa Malaysia today.

Public Bank said net profit rose to RM1.17 billion for the first quarter ended March 31, 2015 (1QFY15) from RM1.02 billion. Revenue strengthened to RM4.6 billion against RM3.95 billion.

According to the group, 1QFY15 net interest income was higher at RM1.53 billion while net fee and commission income rose to RM370.03 million. Allowance for bad loans fell to RM75.75 million.
 
Public Bank said higher net interest income was driven by loan and deposit growth.

The group said loans grew to RM253.1 billion as at March 31 this year versus RM226.6 billion a year earlier. This was driven by growth in loans for property, passenger vehicles, and small-and-medium enterprises (SME).

"Total deposits from customers increased by 10.2% or RM26.5 billion to RM285.4 billion as at March 31, 2015, which partly contributed to the higher net interest income for the current period," it said.
 
On prospects, Public Bank said outlook for the banking sector remained positive. The group said the sector continued to be supportive of economic activities in 2015.

Public Bank said it expected to maintain its leadership in the domestic retail segment, supported by sustained demand for loans in the property, vehicle, and SME segments.

"For overseas operations, the group will continue to expand its presence in the region through organic growth," it said.

Shares in Public Bank rose six sen or 0.3% at 12:30pm to RM19.52 for a market capitalisation of RM75.38 billion. A total of 755,700 shares changed hands.

The stock had gained 7% this year, outperforming the FBM KLCI's 5% rise.

(Notes: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)