KUALA LUMPUR (Nov 30): Public Bank Bhd's net profit for the third quarter ended Sept 30, 2022 (3QFY2022) rose 16.8% to RM1.59 billion from RM1.36 billion a year earlier due to higher net interest income and lower loan impairment allowance.

The higher net interest income was partly attributable to loan growth achieved and the positive effect of overnight policy rate (OPR) hikes, the bank said in its financial report.  

Public Bank added that the lower loan impairment allowance was mainly attributed to adequate pre-emptive allowance made in the prior years.

The group's net interest income was 16.5% higher at RM338.1 million while its loan impairment allowance was 70.4% lower at RM228.5 million, partially offset by 10.4% higher other operating expenses of RM101.5 million.

By segment, hire purchase showed significant increase in pre-tax profit, a 589.6% increase to RM217.6 million, which it said arose from net writeback of loan impairment allowance in the current quarter, as adequate pre-emptive allowance has been made in the prior years.

In a Bursa Malaysia filing on Wednesday (Nov 30), the bank also announced that its revenue for the quarter increased to RM5.5 billion from RM4.81 billion a year prior. Earnings per share climbed to 8.19 sen from 7.01 sen.

In conjunction with the better financial performance, the bank declared a second interim dividend of four sen per share for the quarter, payable on Dec 23.  

As at Sept 20, 2022, the total dividend declared by Public Bank for its financial year ending Dec 31, 2022 (FY2022) is 12 sen per share, higher than 7.5 sen a year ago.  

For the cumulative nine months ended Sept 30, 2022, the group’s net profit improved 3% to RM4.4 billion from RM4.28 billion a year prior. Revenue during the same period grew to RM15.36 billion from RM14.76 billion.

The bank highlighted that there was a small increase in net profit of RM130.1 million in the period due to additional tax charge arising from the one-off prosperity tax.

As at the end of September 2022, the Public Bank group’s total loans expanded at an annualised rate of 5.8% to RM373.6 billion. Domestic loans grew at an annualised rate of 5.2% to RM347.8 billion, mainly supported by residential properties, which expanded at an annualised rate of 7.4%, and hire purchase financing, which expanded at an annualised rate of 9.9%.  

Public Bank said the Malaysian banking system remains resilient, underpinned by ample liquidity and healthy capital buffers. The group stated that its liquidity coverage ratio remained stable at 123.2%.

The group also said its loan loss coverage ratio as at end-September 2022 stood at 339.5%, which it said was significantly higher than the banking industry’s loan loss coverage ratio of 97.8%.  

“Including regulatory reserves, the group’s loan loss coverage ratio was higher at 359.6%,” Public Bank said.  

At the midday break on Wednesday, Public Bank settled one sen lower at RM4.40, valuing it at RM85.41 billion.