Monday, October 17, 2011

#Update* Public Bank 3Q earnings up 14.8% to RM898m

KUALA LUMPUR: PUBLIC BANK BHD []'s earnings rose 14.8% to RM898.79 million in the third quarter ended Sept 30, 2011 from RM782.7 million a year ago but it was cautiously optimistic on the economic outlook for the rest of the year..

It said on Monday, Oct 17 this was underpinned by strong loans and deposits growth and stable asset quality resulting in higher net interest income and lower loan impairment charges.

Revenue increased by 13.7% to RM3.27 billion from RM2.87 billion. Earnings per share were 25.66 sen compared with 22.35 sen a year ago. There were no dividends declared, similar to last year.

As for the remaining of 2011, it added the Malaysian economy was expected to see a moderation in its growth rate in 2011 amidst a challenging external environment due to continued weaknesses in the US and in Europe. But in Asia, economic growth prospects in Asia remained positive underpinned by domestic demand.

'The outlook for the Malaysian banking sector, in which the group largely operates in, continued to be stable and supportive of growth. Competition will further intensify due to the entrance of foreign controlled banks.

'The retail banking business is projected to grow at a moderate pace amidst stiff competition and the introduction of regulatory measures to address rising household debt levels,' it said.

For the nine-months ended Sept 30, 2011, its earnings rose 18.3% to RM2.606 billion from RM2.202 billion. Revenue increased 16.9% to RM9.434 billion from RM8.064 billion. Pre-tax profit grew by 16.6% to RM3.447 billion from RM2.955 billion.

The chairman of Public Bank Tan Sri Dr. Teh Hong Piow said: 'The Public Bank Group's sound financial results are a validation of the Group's effective organic growth strategies and sustainable business model. The group continues to retain a clear lead with the highest net return on equity of 26.7% amongst the Malaysian banks.

He said net profit growth of 18.4% and 26.7% net return on equity were driven by strong revenue growth of 9.6%, continued disciplined cost management with low cost-to-income ratio of 30%; and superior asset quality with improvement in credit charges by 15%.

Public Bank was the market leader, holding on to the top spot in domestic lending for residential mortgages, commercial property financing and passenger vehicles financing.

'Our balance sheet growth indicators remained healthy. Gross loans book stood at RM172.7 billion, which grew by 13.8% on an annualised basis. 'Domestic loan growth remained strong with an annualised growth rate of 14.1%.

'Over the same period, total customer deposits grew by an annualised rate of 12.7% to RM193.7 billion, while domestic customer deposits grew at a stronger annualised growth rate of 13.8%.

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