For Immediate Release
31 March 2014
Public Bank's 48th Annual General Meeting Held On 31 March 2014
In conjunction with Public Bank’s 48th Annual General Meeting held on 31 March 2014, 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 2013.
Tan Sri Teh said, “The Public Bank Group recorded a pre-tax profit of RM5.31 billion in 2013, representing a growth of 5.2% as compared to 2012. The Group’s net profit attributable to shareholders exceeded the RM4 billion mark for the first time, increasing by 6.2% to RM4.06 billion.”
Tan Sri Teh commented that, “In 2013, the Public Bank Group recorded healthy double digit growth of 11.8% and 11.5% in gross loans and deposits. In particular, domestic loans and deposits grew at a faster rate of 12.0% and 11.6% respectively, leading to improved market shares in the domestic market.”
Tan Sri Teh highlighted, “As a result of the Group’s favourable performance in 2013, a second interim single-tier dividend of 30 sen was paid on 28 February 2014. Together with the first interim single-tier dividend of 22 sen which was paid in August 2013, the total dividend for 2013 was 52 sen.” The total dividend paid for 2013 amounted to RM1.82 billion and represented a total payout of 44.8% of the Group’s net profit for 2013.
Strong Double Digit Growth in Loans and Customer Deposits
The Group continued to focus its lending activities on the retail sector, with loans for the financing of residential properties, passenger vehicles and lending to small and medium enterprises. The Group’s retail loan portfolio collectively accounted for 86% of its total loans.
Tan Sri Teh said, “The Public Bank Group continued to command market leadership in domestic lending for residential mortgages, commercial property financing and passenger vehicle financing with market share of 19.6%, 33.8% and 26.5% respectively as at the end of 2013.”
“The Group’s funding position remained stable and healthy, supported by its strong retail deposit franchise of over five million customers. Domestic customer deposits grew by 11.6%, significantly higher than the domestic banking industry’s deposit growth of 8.5%.” commented Tan Sri Teh.The strong domestic deposit growth was mainly attributed to the steady inflow of fixed deposits and low cost savings and current accounts, which grew by 14.2%, 8.3% and 17.0% respectively.
Excellent Asset Quality
“The Public Bank Group’s gross impaired loans ratio remained low at 0.7% as at the end of 2013 which was significantly lower than the Malaysian banking industry’s gross impaired loans ratio of 1.9%.” commented Tan Sri Teh.
Tan Sri Teh further added, “The Group's loan loss coverage ratio stood at 118.5%, which was higher and more prudent than the banking industry's loan loss coverage ratio of 107.6%.”
The Public Bank Group’s pre-tax profits from international operations registered a growth of 8.6% in 2013 and contributed 6.6% to the Group’s pre-tax profits in 2013. Cambodian Public Bank Plc (“Campu Bank”), a wholly-owned subsidiary of Public Bank, reported an improvement in profit contribution by 8.0% to RM117.2 million in 2013.
The Public Bank Group remains committed to expand its presence in the region through organic growth. As at the end of 2013, the Group has 124 overseas branches, with 83 branches in Hong Kong, 3 branches in Shenzhen in the People’s Republic of China, 25 branches in Cambodia, 7 branches in Vietnam, 4 branches in Laos and 2 branches in Sri Lanka.
Sustaining Growth in Fee-based Income
The Public Bank Group continued to focus its efforts to increase fee income from unit trust, bancassurance, foreign-exchange related transactions and transactional banking services.
“The Group’s unit trust management business through its wholly-owned subsidiary, Public Mutual, recorded commendable performance with a 14.5% growth in pre-tax profit in 2013. Public Mutual remained the market leader in the private unit trust industry with 104 funds under its management. Total assets under management rose by 14.5% to RM62.5 billion, capturing 41.2% of the overall market share as at the end of 2013, with 59.5% and 53.2% market share in the equity and Islamic unit trust fund sectors respectively.” Tan Sri Teh commented.
The Public Bank Group’s strategic bancassurance partnership continued with AIA Group Ltd (“AIA”) following the acquisition by AIA of the ING’s insurance operations in Malaysia. The bancassurance partnership has proven to be successful as it enables the Group to provide life, health and investment-linked insurance products to its large customer pool in Malaysia and Hong Kong. In 2013, the Group achieved sales of bancassurance products, measured in terms of Annualised Premium Equivalent of RM121.1 million.
Healthy Capital Position
The Public Bank Group’s capital position remained healthy, with common equity Tier 1 capital ratio, Tier 1 capital ratio and total capital ratio standing at 8.8%, 10.5% and 13.8% respectively as at the end of 2013.
Tan Sri Teh emphasised that, “Public Bank will continue to proactively manage its capital to ensure an optimum level of capital to support the Group’s business growth whilst maximising its shareholder value and balancing the need for higher capital retention as required by the Basel III standards.”
Superior Returns to Shareholders
The Public Bank Group has consistently delivered superior returns to its shareholders, both over the medium term and long term.
Tan Sri Teh commented, “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 and had not sold any of the Public Bank shares, he would have 135,398 Public Bank shares worth RM2.6 million based on the current share price of Public Bank (Local) shares of RM19.16. In addition, he would have received total gross dividends of RM914,243. This translates into a total value of RM3.5 million representing remarkable compounded annual rate of return of 19.6% for each of the 46 years since 1967.
Over the medium-term of 5 years since the end of 2008, a Public Bank shareholder would have enjoyed a total return of 159.5% or a compounded annual return of 21.0% for each of the last 5 years.”
Tan Sri Teh added that, “The Group continued to be in the forefront amongst its banking peers in Malaysia, achieving the highest net return on equity of 22.4% while maintaining the lowest gross impaired loans ratio of 0.7% and lowest cost to income ratio of 30.7%.”
In support of environment sustainability, the Public Bank Group adopted the “green” concept in the construction of Public Mutual’s new head office building in Kuala Lumpur, which incorporates a host of green features in the design and layout of the building.
Other key corporate responsibilities initiatives undertaken include providing continued financial assistance to the IJN Foundation for the set up of a dormitory to house families of needy patients undergoing treatment at Institute Jantung Negara, the continued support of the Universiti Tunku Abdul Rahman in its research studies in the field of banking and finance and contributions focused in the area of healthcare, education, professional development and community activities.
Tan Sri Teh said, “The Public Bank Group will continue to channel funding to assist the development and growth of SMEs and micro enterprises. The Group also actively participated in BNM’s initiatives and financing schemes to promote SME activities. As a result of its strong profitability track record, the Group is a major contributor to the fiscal revenue of the country with tax payments totalling RM4.8 billion for the past 5 years.”
An Award Winning Bank
Tan Sri Teh highlighted that, “In 2013, the Public Bank Group was accorded numerous awards and recognition of excellence by reputable domestic and international publications and independent organisations.” The awards received include:
Best Bank in Malaysia by FinanceAsia (15th time)
Best Bank in Malaysia by Alpha Southeast Asia (7th time)
Domestic Retail Bank of the Year - Malaysia by Asian Banking and Finance (5th time)
Best Domestic Bank in Malaysia by The Asset (12th time)
Tan Sri Teh further added, “Public Mutual won 10 awards at The Edge-Lipper Malaysia Fund Awards 2014. This is the 11th consecutive year that Public Mutual has won the most awards at this prestigious annual event.”
Corporate Governance Awards
Tan Sri Teh said, “The Public Bank Group’s pursuit of excellence in good corporate governance continued to be validated by reputable domestic and international publications and independent organisations.”
Public Bank was awarded the Corporate Governance Asia’s 3rd Asian Excellence Recognition Awards 2013 for Best Corporate Social Responsibility and Best Investor Relations by a Malaysian company and the Corporate Governance Asia Recognition Award 2013. Public Bank was also awarded The Asset Platinum Corporate Award 2013 for All-Round Excellence in Financial Performance, Management, Corporate Governance, Social Responsibility, Environmental Responsibility and Investor Relations as well as Minority Shareholder Watchdog Group’s Malaysia-ASEAN Corporate Governance Index 2013 Awards for Top Five Overall Corporate Governance and Industry Excellence - Financials.
On strategic directions for the Public Bank Group, Tan Sri Teh commented that, “The Public Bank Group will continue to focus on its core retail banking and financing business and uphold prudent credit policies as well as strong corporate governance to support long term sustainable growth. The Group is expected to maintain its earnings momentum and record satisfactory performance in 2014.”
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Y.Bhg. Tan Sri Dato' Sri Dr. Teh Hong Piow
Founder and Chairman of Public Bank
The Public Bank's Board of Directors at the Bank's 48th Annual General Meeting
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