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Public Bank Group Posted Pre-Tax Profit of RM2.00 Billion for The First Quarter of 2022
FOR IMMEDIATE RELEASE
 
30 May 2022
 
Public Bank Group Posted Pre-Tax Profit of RM2.00 Billion for The First Quarter of 2022
 
Public Bank Group posted a pre-tax profit of RM2.00 billion for the first quarter ended 31 March 2022, recording 0.1% growth as compared with the corresponding period in 2021.

However, net profit attributable to shareholders declined by 8.6% to RM1.40 billion compared with RM1.53 billion in the corresponding period in 2021, primarily due to the imposition of the one-off prosperity tax introduced by the Government for 2022.

The domestic banking sector continued to face significant challenges stemming from the remaining effect of the COVID-19 pandemic. The downside pressure on the economy was compounded with global geopolitical tensions and conflicts.

Tan Sri Dato’ Sri Dr. Teh Hong Piow, the Founder, Chairman Emeritus, Director and Adviser of Public Bank said, “Overall, the operating environment still remains highly challenging. However, the Public Bank Group’s sound fundamentals, coupled with its strategic vigilance and agility, continued to enable the Group to sustain financial resilience.”

Tan Sri Teh added, “In the first quarter of 2022, the Public Bank Group continued to sustain a resilient net return-on-equity of 11.8% and efficient cost-to-income ratio of 33.2%.”
 
Steady Expansion in Loans and Deposits Businesses
 
As at the end of March 2022, the Public Bank Group’s total loans recorded an annualised growth of 5.3% to RM362.7 billion. Domestic loans grew stronger at an annualised rate of 5.9% to RM339.6 billion. This was mainly contributed by its retail sector, in particular financing for residential properties and hire purchase financing. Total loans approved rose by 14.0% in the first quarter of 2022, as compared with the corresponding period in 2021. As at the end of March 2022, the Group sustained its leading position in the residential properties, commercial properties and hire purchase financing with market share of 20.5%, 34.0% and 30.4% respectively.

In terms of funding, the Group’s total customer deposits recorded an annualised growth of 4.6% to RM384.8 billion. Domestic deposits grew at a same pace with annualised rate of 4.6% to RM356.7 billion.

Tan Sri Teh said, “The Public Bank Group’s financing growth remained well supported by its healthy funding structure, as reflected in its gross loan to fund and equity ratio of 80.7% as at the end of March 2022.”

Continued Support from Non-Interest Income
 
For the first quarter of 2022, the Public Bank Group’s non-interest income was lower by 10.9%, as compared with the previous corresponding quarter. This was mainly due to the decline in the Group’s income from its unit trust and stockbroking businesses as well as lower investment income arising from the unfavourable market condition during the quarter. However, the other banking related fee income remained stable.
 
Tan Sri Teh highlighted, “The Public Bank Group’s unit trust business, undertaken by its wholly-owned subsidiary, Public Mutual remains the main contributor to the Group’s non-interest income. Public Mutual recorded a pre-tax profit of RM202.0 million in the first quarter of 2022, contributing 10.1% to the Group’s profit. As at the end of March 2022, Public Mutual continued to capture a large retail market share of 35.4%, with a total of 177 unit trust funds and total assets under management of RM99.8 billion.”

Efficient Cost Management

For the first quarter of 2022, the Group recorded an increase of 1.5% in overhead expenses.
 
Tan Sri Teh said, “In pursuit of cost optimisation strategy, the Public Bank Group continues to adopt a prudent approach in managing its operating overhead. In the first quarter of 2022, the Group’s cost-to-income ratio remained at an efficient level of 33.2%, as compared with the domestic banking industry’s average of 48.1%.”
 
Resilient Asset Quality
 
As at the end of March 2022, the Public Bank Group’s gross impaired loans ratio remained low at 0.3%, well below the industry’s gross impaired loans ratio of 1.5%.
 
Tan Sri Teh added, “Despite its resilient credit profile, the Public Bank Group remained extra vigilant and continued to take a prudent approach in setting aside loan loss reserves. With the prudent preemptive provision being set aside since the start of the pandemic, the loan loss coverage of the Group is the most prudent amongst its peers. As at the end of March 2022, the Group’s loan loss coverage ratio stood at 382.5%, significantly higher as compared with the banking industry’s loan loss coverage ratio of 115.7%. Meanwhile, the Group’s loan loss coverage ratio inclusive of regulatory reserves was higher at 402.7%.”

Assistance for Customers Affected by the Pandemic
 
Since the onset of the COVID-19 pandemic in 2020, the Public Bank Group remained committed to assist individuals and businesses who faced repayment constraint by offering various flexible relief assistance packages. In addition, the Group also continued to provide various financing support to SMEs, including the various SME financing schemes initiated by the Government and Bank Negara Malaysia.

Tan Sri Teh added, “The Group has assisted about 24% of its borrowers with total loans amounting to more than RM80.0 billion under various Repayment Assistance Programmes. With the expiry of some of the loans under the PEMULIH repayment assistance scheme, the Group is still proactively providing further assistance to customers who continue to face financial constraints. As at the end of April 2022, about RM20.1 billion domestic loans were still under the Repayment Assistance Programmes, accounting for 6% of the Group’s total domestic loans.”

Overseas Operations
 
The Public Bank Group’s overseas operations contributed 7.5% to the Group’s profit, whereby Public Financial Holdings Limited Group (“PFHL”) and Cambodian Public Bank (“Campu Bank”) continued to be the main contributors.

Tan Sri Teh added, “In addition to the PFHL and Campu Bank, Public Bank Vietnam (“PBVN”) remained another key focus of the Group in growing its overseas operations.  In the first quarter of 2022, PBVN achieved a profit growth of 23.9%, as compared with the corresponding period last year.  In view of the good growth potential in Vietnam, the Group will continue to expand its branch network in Vietnam to a total of 32 branches by the end of 2022, subject to regulatory approval.”
 
Healthy Capital and Liquidity Position
 
As at the end of March 2022, the Group’s common equity Tier 1 capital ratio, Tier 1 capital ratio and total capital ratio stood at a healthy level of 14.3%, 14.4% and 17.4% respectively, while liquidity coverage ratio remained healthy at 126.2%.
 
Group’s Prospects
 
Malaysia’s proactive actions to contain COVID-19 is set to further stimulate the economy with the reopening of more social and economic sectors as well as international borders. Nevertheless, challenges surrounding the outlook remain due to external and domestic factors, such as the resurgence of COVID-19 variants and geopolitical tensions.

Tan Sri Teh commented, “With the economic recovery expected to gain further traction going forward, it will further stimulate sentiments on the ground, providing a more supportive environment for businesses.”

Tan Sri Teh concluded, “After two years into the COVID-19 pandemic, the Public Bank Group’s resilience to challenges has been further strengthened.  Coupled with its sound fundamentals built over the years, the Public Bank Group will remain in good stead to capitalise growth opportunities in the post-pandemic economy going forward. The Group will remain steadfast in pursuing its organic business strategy, improving cost efficiency and maintaining superior asset quality to support sustainable growth.”
 
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Y.Bhg. Tan Sri Dato' Sri Dr. Teh Hong Piow
Founder, Chairman Emeritus, Director and Adviser of Public Bank
 
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