PUBLIC BANK GROUP ACHIEVED PRE-TAX PROFIT OF RM2.21
BILLION FOR THE FIRST QUARTER OF 2023
For the first quarter ended 31 March 2023, the Public Bank Group
recorded pre-tax profit growth of 10.4% to RM2.21 billion, as compared
with the corresponding quarter in 2022. Net profit grew at a higher rate of
22.6% to RM1.71 billion during the same period, due to the prosperity tax
imposed in the previous corresponding period.
Tan Sri Dato’ Sri Dr. Tay Ah Lek, Managing Director and Chief Executive
Officer of Public Bank commented, “The Public Bank Group continued
to navigate through the challenges in the evolving operating
environment and demonstrated resilience in its first quarter 2023
performance, which was mainly supported by commendable net
interest income growth and lower loan impairment allowances.”
Net interest income increased by 7.4%, mainly led by healthy loans and
deposits growth which expanded at an annualised growth rate of 5.0%
and 9.1% respectively. Coupled with lower impairment allowances during
the quarter, the Group sustained a resilient net return on equity of 13.6%.
Despite high inflationary pressure, increase in operating expenses was
well under control at 4.7%, underpinned by the Group’s prudent cost
management. As a result, the Group continued to achieve an efficient
cost-to-income ratio of 33.1% in the first quarter of 2023.
Asset quality remained stable with a low gross impaired loans ratio of
0.5%. Loan impairment allowances were lower by 98.5% to RM1.5 million
from RM99.7 million in the corresponding quarter of 2022.
Loans and Deposits Businesses
During the first quarter ended March 2023, the Public Bank Group
maintained a healthy loan growth momentum at an annualised growth
rate of 5.0% to RM381.6 billion, largely supported by the domestic loan
portfolios which grew by an annualised rate of 5.4% to RM356.8 billion.
Domestic loan growth was mainly contributed by residential properties
financing, hire purchase financing as well as SME financing, which grew
at an annualised rate of 6.1%, 11.5% and 2.7% respectively. This has
sustained the Group’s leading market share in the residential properties
financing, hire purchase financing and domestic SME lending, which
stood at 20.6%, 30.4% and 19.0% respectively.
The Group’s funding and liquidity position remained healthy, supported
by a commendable growth in customer deposits at an annualised rate of
9.1% to RM403.7 billion. Domestic deposits rose by 10.2% on an
annualised basis to RM376.5 billion, attributable to the consistent growth
in retail deposits.
Reflecting its healthy balance sheet, the Public Bank Group continued to
maintain a stable gross loan to fund and equity ratio of 80.4% as at the
end of March 2023.
Asset Quality
As at the end of March 2023, the Public Bank Group continued to achieve
and maintain sound and resilient asset quality as reflected in its low gross
impaired loans ratio of 0.5%, a level significantly lower than the domestic
banking industry’s average gross impaired loan ratio of 1.7%.
The Group’s loan loss coverage ratio stood comfortably at 217.8%, well
above the banking industry’s loan loss coverage ratio of 95.8%. Including
regulatory reserves, the Group’s loan loss coverage ratio was higher at
239.6%.
With the ongoing economic recovery, the Group has observed a stable
repayment trend from customers. However, amidst the expected
economic challenges in 2023, the Group will stay vigilant in managing its
loan portfolios and will continue to provide assistance to customers who
face repayment constraints.
Non-interest Income
In the first quarter of 2023, non-interest income increased marginally by
0.7% as compared with the corresponding quarter in 2022. The subdued
market conditions was cushioned by the Group’s higher foreign
exchange profit, stockbroking income as well as investment income.
The Public Bank Group’s unit trust business undertaken by its wholly
owned subsidiary, Public Mutual remained the main contributor to the
Group’s non-interest income. Public Mutual recorded a pre-tax profit of
RM192.6 million in the current quarter, contributing 8.7% to the Group’s
profit. With total assets under management of RM94.4 billion and 179
unit trust funds being managed, Public Mutual continued to capture a
large retail market share of 35.7% as at the end of March 2023.
Overseas Operations
In the first quarter of 2023, the Public Bank Group’s overseas operations
contributed 8.1% to the Group’s profit, mainly attributed to its Hong Kong
and Indochina operations.
Public Bank Vietnam and Cambodian Public Bank continued to deliver
strong profit performance, as reflected in the respective double-digit profit
growth of 24.5% and 59.8% year-on-year. Indochina will continue to be
the Group’s key focus growth area, with continued expansion of branch
network as well as broadening of products and services. The Group is
targeting to open another 8 new branches in Vietnam to reach a total of
40 branches by year end.
However, the operating environment for the Group’s Hong Kong
operations remain uncertain and challenging despite the lifting of COVID19
containment measures.
Capital and Liquidity Position
As at the end of March 2023, the Group remained well capitalised with
common equity Tier 1 capital ratio, Tier 1 capital ratio and total capital
ratio standing at 14.6%, 14.7% and 17.7% respectively. Liquidity
coverage ratio also remained stable and healthy at 137.1%.
The Group’s capital and liquidity position has remained sound and is
resilient to any potential stress condition. The Group will continue to
manage its balance sheet prudently in pursuit of its banking business
growth.
Group’s Prospects
The heightened volatility in the financial markets and rising concerns
about the health of banking sectors across the United States and Europe
raise question on the potential risk of contagion effects. This is likely to
further exert downward pressure on the world economy which is already
bracing for a challenging 2023 due to elevated inflation, tightening
financial conditions and geopolitical tensions. Malaysia as an open
economy, will continue to face these headwinds.
Nevertheless, firm domestic demand underpinned by improved
employment market, multi-year investment projects, Government’s policy
measures and recovery in China’s economy will continue to support the
Malaysian economy on the positive growth trajectory, providing a stable
and conducive business environment for banking business growth.
Tan Sri Tay concluded, “The Public Bank Group is cognisant of the
prevailing challenges and evolving landscape. The Group will
remain focused on cost discipline, preservation of sound asset
quality and upholding strong corporate governance to safeguard its
resilience against adversity. Notwithstanding, the Group will
continue to take a proactive approach in embracing growth
opportunities arising from the growing economy, digital
transformation as well as the growing ESG demand.”
25 May 2023
For more information, please contact:
Ms Chang Siew Yen Ms Yik Sook Ling
Senior Chief Operating Officer Chief Financial Officer
Tel: (603) 2176 7461 Tel: (603) 2177 3310
Fax: (603) 2163 9925 Fax: (603) 2164 9002
Email: changsiewyen@publicbank.com.my Email: yiksookling@publicbank.com.my
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