For Immediate Release
28 March 2016
Public Bank’s 50th Annual General Meeting Held On 28 March 2016
In conjunction with Public Bank’s 50th Annual General Meeting held on 28 March 2016, the Founder and Chairman of Public Bank, Tan Sri Dato’ Sri Dr. Teh Hong Piow is pleased to present a review of the Public Bank Group’s performance in 2015.
Tan Sri Teh said, “The Public Bank Group achieved another profit milestone in 2015 with pre-tax profit of RM6.49 billion, crossing the RM6 billion mark for the first time. This represents 11.6% growth as compared to 2014. Net profit attributable to shareholders grew by 12.0% to RM5.06 billion in 2015, resulting in earnings per share increasing from 123.7 sen in 2014 to 131.1 sen in 2015.”
Tan Sri Teh added, “The Public Bank Group continued to maintain its leading position amongst its banking peers in Malaysia with the highest net return on equity of 17.8%, most efficient cost to income ratio of 30.5% and lowest gross impaired loans ratio of 0.5%.”
Tan Sri Teh highlighted that, “Despite the challenging operating environment, the Public Bank Group’s loans and deposits grew at a healthy pace of 11.6% and 8.9% respectively. Domestic loans increased by 10.3%, higher than the industry’s growth rate of 7.9%. In particular, domestic customer deposits grew by 7.5%, significantly higher than the industry’s deposits growth of 1.8%. This has led to improved market shares of loans and deposits in the domestic market.”
Tan Sri Teh added, “In view of the Group’s good performance in 2015, a second interim dividend of 32 sen was paid on 1st March 2016. Together with the first interim dividend of 24 sen paid in August 2015, total dividend for 2015 amounted to 56 sen.” The total dividends paid for 2015 was RM2.16 billion, representing a payout of 42.7% of the Group’s net profit for 2015.
Above-industry Growth in Loans and Customer Deposits
The Group’s loans growth continued to be propelled by financing for the purchase of residential properties and passenger vehicles as well as commercial lending to small and medium enterprises for the purchase of commercial properties and working capital. As at the end of 2015, the Group’s retail consumer and commercial loans and financing portfolio collectively formed 86% of its total loans and financing.
Tan Sri Teh further added, “The Group’s domestic loans market share improved to 17.5% as at the end of 2015, from 17.1% a year ago. The Group sustained its leading market share positions in the domestic financing for purchases of residential properties, commercial properties and passenger vehicles, with market shares of 19.2%, 33.8% and 29.6% respectively as at the end of 2015.
On the funding side, the Group continues to be supported by its strong retail franchise and large depositor base of over five million customers. The Group’s above industry customer deposits growth has resulted in domestic market share of customer deposits expanding to 16.6% as at the end of 2015, from 15.9% a year ago.”
Superior Asset Quality
Tan Sri Teh said, “The Public Bank Group’s asset quality remains the best in the banking industry. Gross impaired loans ratio remained low at 0.5% in 2015, about one-third that of the banking industry’s gross impaired loans ratio of 1.6%.”
The Group's loan loss coverage ratio of 120.8% as at the end of 2015 was also higher as compared to the Malaysian banking industry’s ratio of 96.2%. Inclusive of regulatory reserves set aside, the Group’s loan loss coverage was significantly higher at 258.6%.
The pre-tax profit of the Public Bank Group’s overseas operations grew by 32.5% to RM572.2 million in 2015, contributing 8.8% to the Group’s overall pre-tax profit in 2015. Excluding the effect of favourable foreign exchange movement, the pre-tax profit of the Group’s international operations grew by 12.5% mainly contributed by Cambodian Public Bank Plc, a wholly-owned subsidiary of Public Bank, which registered a pre-tax profit growth of 15.7% to USD58.5 million in 2015.
Sustaining Growth in Non-Interest Income
Growing non-interest income remains a key strategic focus of the Public Bank Group. In 2015, the Group’s non-interest income increased by 22.4% as compared to 2014. This was mainly due to higher income from unit trust business, foreign exchange transactions and fee income from banking operations.
Tan Sri Teh said, “The Public Bank Group’s unit trust management business undertaken by its wholly-owned subsidiary, Public Mutual Berhad (“Public Mutual”), continued to be a main contributor to the non-interest income growth of the Group. In 2015, Public Mutual recorded pre-tax profit of RM541.2 million and sustained its market leadership in the private unit trust business with 122 funds under its management. Total assets under management of Public Mutual stood at RM64.8 billion, capturing an overall retail market share of 48.9%.”
Healthy Capital Position
The Public Bank Group’s capital position remained healthy with its common equity Tier I capital ratio, Tier I capital ratio and total capital ratio standing at 10.9%, 12.0% and 15.5% respectively as at the end of 2015, after deducting second interim dividend.
Tan Sri Teh commented that, “Public Bank is well-positioned to ensure compliance with the more stringent requirements of the Basel III capital framework, including any additional capital buffer to be introduced by Bank Negara Malaysia, without restraining the Group’s organic business growth strategy.”
Superior Returns to Shareholders
The Public Bank Group continues to deliver consistent and excellent returns to its shareholders, even during challenging times, clearly demonstrating the defensive quality of the investment made in Public Bank.
Tan Sri Teh highlighted, “If a shareholder of Public Bank had bought 1,000 shares in Public Bank when it was listed in 1967, and assuming the shareholder had subscribed for all rights issues to date and had not sold any of the Public Bank shares, he would have 148,938 Public Bank shares worth RM2.76 million as at 31 December 2015. In addition, he would have received total gross dividends of RM1.08 million. This translates into a total value of RM3.84 million, representing a remarkable compounded annual rate of return of 19.1% for each of the 48 years since 1967.”
The Public Bank Group continues to adopt sustainable practices in its core business of banking. The Group also supports a broad range of activities and initiatives to promote sustainability in the communities in which it operates. On education, the UTAR-Tan Sri Dato’ Sri Dr. Teh Hong Piow Student Loan Fund and TARC- Tan Sri Dato’ Sri Dr. Teh Hong Piow Student Loan Fund continued to benefit the students of University Tunku Abdul Rahman and Tunku Abdul Rahman College to fulfil their ambition in education. On healthcare, the Group continued to lend a helping hand to the National Blood Bank and Institut Jantung Negara by promoting their activities at Public Bank’s premises. In response to the flood disaster in the country at the end of 2014, Public Bank provided financial assistance to those affected by the floods via the Special Relief Facility initiated by Bank Negara Malaysia. In support of environment sustainability, the Public Bank Group’s new 40-storey building for Public Mutual’s head office is designed with green concepts and built using eco-friendly materials and technologies.
“Through the Group’s banking business, the Group serves retail consumers and small and medium enterprises, and promote economic as well as social development by encouraging savings and mobilising funds towards the development of trade and commerce. As a testimony to the Group’s sustainability initiatives, Public Bank has been included in the FTSE4Good Bursa Malaysia Index in 2015,” said Tan Sri Teh.
Recognition of Banking Excellence
Tan Sri Teh commented that, “The Public Bank Group continued to garner international awards in recognition of its banking excellence.” The awards received include:
- Best Bank in Malaysia 2015 by Global Finance
- Best Bank in Malaysia 2015 by FinanceAsia
- Best Bank in Malaysia 2015 by Alpha Southeast Asia
- Best Bank in Malaysia 2015 by Euromoney
- Strongest Bank by Balance Sheet in Malaysia 2015 by The Asian Banker
- Best Domestic Bank in Malaysia 2015 by Asiamoney
- Best Domestic Bank in Malaysia 2015 by The Asset
- Domestic Retail Bank of the Year - Malaysia 2015 by Asian Banking & Finance
- Malaysia Automotive Finance Company of the Year 2015 by Frost & Sullivan
- The BrandLaureate Billion Dollar Brand Award 2014-2015 by Asia Pacific Brands Foundation
- The BrandLaureate Special Edition World Awards as a Premier Corporate Brand 2015 by Asia Pacific Brands Foundation
Corporate Governance Awards
Tan Sri Teh said, “The Public Bank Group’s pursuit of excellence in corporate governance continued to be recognised by reputable international publications and independent organisations.” These include:
- The 5th Asian Excellence Recognition Awards 2015 for Best Corporate Social Responsibility for Malaysia, Best Investor Relations Company for Malaysia, Best Environmental Responsibility for Malaysia and Best Corporate Communications Team for Malaysia by Corporate Governance Asia
- Corporate Governance Asia Recognition Award 2015 for Malaysia (Icon on Corporate Governance) by Corporate Governance Asia
- Ranked No. 1 in the ‘Most Committed to Paying Good Dividends’ category in the FinanceAsia’s “Asia’s Best Companies Poll 2015”
- The Asset Platinum Corporate Award 2015 for All-Round Excellence in Financial Performance, Management, Corporate Governance, Social Responsibility, Environmental Responsibility and Investor Relations by The Asset
- MSWG – ASEAN Corporate Governance Transparency Index, Findings and Recognition 2015 for Excellence Award for Top 5 Corporate Governance and Performance (Overall), Excellence Award for Long-Term Value Creation (Overall Category), Industry Excellence – Financial and Merit Award for Corporate Governance Disclosures by Minority Shareholder Watchdog Group
- Inclusion in the FTSE4Good Bursa Malaysia Index by Bursa Malaysia
Tan Sri Teh said, “In 2016, Public Bank celebrates its 50th year of operations in Malaysia. Public Bank was envisioned as the “bank for the people” and over the last half a century, the Group has achieved many corporate milestones. With its 49 years of unbroken profitability track record, the Group has established its leading position in the banking industry.”
On the strategic directions and outlook for the Public Bank Group, Tan Sri Teh commented that, “The Group enters 2016 mindful of the ongoing economic and business challenges, yet confident that it has what it takes to surge ahead. Going forward, the Group will remain focused on its core retail banking and financing business, whilst maintaining its prudent credit policies, as well as upholding strong corporate governance. Moving into the Group’s 50th anniversary in 2016, the Group is confident that it is well positioned to achieve sustainable growth in the future.”
The Public Bank Board Members (From left) Dato' Chia Lee Kee, Mr. Tang Wing Chew, Tan Sri Dato' Sri Tay Ah Lek, Tan Sri Dato' Sri Dr. Teh Hong Piow, Dato' Sri Lee Kong Lam, Mr. Lai Wan, Ms. Lai Wan Keen, Ms. Cheah Kim Ling
Y. Bhg. Tan Sri Dato' Sri Dr. Teh Hong Piow, Founder and Chairman of Public Bank welcoming the shareholders
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