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Public Bank Group Reported Net Profit Of RM4.28 Billion For The Nine Months Ended September 2021

29 November 2021
Public Bank Group Reported Net Profit Of RM4.28 Billion For The Nine Months Ended September 2021
Tan Sri Dato’ Sri Dr. Teh Hong Piow, the Founder, Chairman Emeritus, Director and Adviser of Public Bank announced today that for the nine months ended September 2021, the Public Bank Group posted pre-tax profit of RM5.56 billion and net profit of RM4.28 billion, supported mainly by its core business of lending and deposit-taking.

However, the prevailing economic condition in 2021 has remained challenging amid the prolonged COVID-19 pandemic. The reimposition of tighter containment measures during the third quarter of 2021 continued to dampen economic growth. For the third quarter of 2021, the Public Bank Group’s net profit declined by 1.7% to RM1.36 billion compared to RM1.38 billion in the second quarter of 2021.

Tan Sri Teh commented, “During these trying times, the Group had undertaken multiple proactive initiatives in its business strategies and placed greater emphasis on risk management and productivity. These efforts enabled the Group to continue to demonstrate resilience in its performance by registering a net return-on-equity of 12.4% and an efficient cost-to-income ratio of 31.7% during the nine months ended September 2021.”

Continued Expansion in Loans and Deposits
As at the end of September 2021, the Public Bank Group’s total loans recorded an annualised growth of 3.0% to RM353.5 billion. Domestic loans grew at an annualised rate of 2.8% to RM330.5 billion. The stringent containment measures continued to weigh on consumer sentiments, leading to the slower growth in loans.
On deposit-taking, the Group’s total customer deposits grew at an annualised rate of 4.8% to RM378.9 billion, supported mainly by its low cost current and savings deposits which grew at an annualised rate of 12.2%. Domestically, total customer deposit grew at an annualised rate of 5.1% to RM350.5 billion.
Tan Sri Teh said, “The Group was able to achieve continued loans and deposit growth, albeit at a moderate pace. As at end-September 2021, the Group’s funding position remained stable with gross loan to fund and equity ratio of 79.7%.”

Sustained Growth in Non-interest Income

Amid the highly uncertain operating environment, non-interest income posted a decline of 2.9% in the first nine months of 2021, mainly arising from the reduction in investment income. However, the Group’s unit trust business, along with fee and commission as well as foreign exchange income continued to generate positive non-interest income growth.

Tan Sri Teh highlighted, “The Public Bank Group’s unit trust business, undertaken by its wholly-owned subsidiary, Public Mutual, registered a pre-tax profit growth of 25.5%, compared to the corresponding period in 2020. As at the end of September 2021, Public Mutual managed a total of 170 unit trust funds with assets under management totalling RM102.7 billion and continued to capture a large retail market share of 32.9%.”

Efficient Cost Management

Overhead expenses increased by 3.0%, compared to the corresponding period in 2020.

Tan Sri Teh said, “With the increasing challenges arising from the COVID-19 pandemic, the Public Bank Group has remained vigilant and continued to manage cost efficiently. The Group has constantly optimised its banking channels, intensified digitalisation initiatives and streamlined its banking operations to drive cost effectiveness as well as to improve customer experience. In the first nine months of 2021, cost-to-income ratio remained stable at 31.7%, as compared to the domestic banking industry’s cost-to-income ratio of 42.8%.”

Resilient Asset Quality

Tan Sri Teh added, “The Public Bank Group’s gross impaired loans ratio remained stable at 0.3% as at the end of September 2021. Despite the resilient asset quality, the Group stayed cautious and further bolstered its loan loss provisions pre-emptively amid the challenging economic condition.”

As at the end of September 2021, the Group’s loan loss coverage ratio stood high at 320.8%, compared to the banking industry’s loan loss coverage of 120.5%. Including the RM0.4 billion regulatory reserves that has been set aside, loan loss coverage ratio was higher at 358.5%.

Repayment Assistance of About RM81.9 Billion for More Than 435,000 Customers

The Public Bank Group has been actively providing relief assistance to borrowers who face repayment constraint since the occurrence of the COVID-19 pandemic last year. These relief assistance packages include loan moratorium, as well as the Targeted Repayment Assistance (TRA) and the Expanded Targeted Repayment Assistance (ETRA). The TRA and the ETRA are offered in various flexible packages to suit the need of different customers with varying financial condition.

The Group has also been proactively promoting special financing schemes initiated by the Government and Bank Negara Malaysia, such as the Special Relief Fund, Micro Enterprises Facility and Targeted Relief and Recovery Facility, to financially assist SMEs who need additional funds for their businesses amid the pandemic challenges.

Tan Sri Teh commented, “The Public Bank Group recognises the calamity brought by the COVID-19 pandemic and has been fully supporting the various initiatives by the Government and Bank Negara Malaysia to address the impact. The Group’s strong commitment to assist borrowers affected by the pandemic, is further reflected in its recent proactive participation in the provision of the six-month moratorium under the PEMULIH, as well as the AKPK Financial Management and Resilience Programme (URUS).”

As at the end of October 2021, about RM81.9 billion or 25% of the Group’s outstanding domestic loans are under the Repayment Assistance Programmes, benefiting over 435,000 customers.

Tan Sri Teh commented, “The Public Bank Group remains mindful of the prolonged difficulties faced by its customers. The Group will continue to proactively engage with its customers and provide financial relief assistance to those in need.”

Overall, the Group’s various financing schemes and repayment assistance have benefitted about 1.9 million of its customers to date.

Healthy Capital and Liquidity Position

As at the end of September 2021, the Group’s common equity Tier 1 capital ratio, Tier 1 capital ratio and total capital ratio stood at a healthy level of 14.1%, 14.1% and 17.2% respectively, while liquidity coverage ratio remained healthy at 145.6%.

Tan Sri Teh reiterated that, “The Public Bank Group continued with its proactive and prudent practices in capital management to ensure adequate buffers are maintained at all times to support its business growth and sustain financial stability, even during challenging times.”

Group’s Prospects

The Malaysian economy remains at a gradual recovery trajectory amid the easing of movement restrictions, beginning with resumption of interstate travel and reopening of more economic and social sectors as more than 95% of the adult population has achieved fully-vaccinated status. However, concerns on the lingering effects of COVID-19 and effectiveness of vaccines against new variants remain significant, which could continue to hinder the pace of economic recovery momentum.

Tan Sri Teh stated, “Despite the continued challenging environment, the Public Bank Group will remain steadfast in its efforts to strengthen its balance sheet, uphold its strong asset quality as well as enhance cost efficiencies further. While embracing the changes stemming from the pandemic, the Group will continue its pursuit of digital transformation and product innovation to strengthen long term business growth.”

Tan Sri Teh concluded, “With its resilient fundamentals, the Group remains well placed to navigate any challenges ahead and spur business growth as the country moves toward post-pandemic recovery.”

Y.Bhg. Tan Sri Dato' Sri Dr. Teh Hong Piow
Founder, Chairman Emeritus, Director and Adviser of Public Bank

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