FOR IMMEDIATE RELEASE
23 May 2022
Public Bank’s 56th Annual General Meeting Held On 23 May 2022
In conjunction with Public Bank’s 56th Annual General Meeting held on 23 May 2022, the Founder, Chairman Emeritus, Director and Adviser 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 2021 and the Group’s strategic direction.
Performance Review
Tan Sri Teh said, “Despite various challenges faced in 2021 due to the COVID-19 pandemic, the Public Bank Group remained resilient and recorded pre-tax profit and net profit attributable to shareholders of RM7.37 billion and RM5.66 billion respectively in 2021, compared with RM6.29 billion and RM4.87 billion in 2020. The higher profit was mainly due to the low base effect in 2020 as well as positive loans and deposits growth achieved in 2021. Earnings per share increased from 25.1 sen in 2020 to 29.1 sen in 2021.”
Tan Sri Teh added, “In 2021, the Public Bank Group continued to outperform its banking peers. The Group is the most cost-efficient bank in Malaysia with the lowest cost to income ratio of 31.6%, as compared to the industry’s average cost to income ratio of 48.1%. In terms of asset quality, the Group remains the best amongst all Malaysian banks, with gross impaired loans ratio of 0.3%, compared to the industry’s average gross impaired loans ratio of 1.4%. The Group continued to sustain double digit net return on equity of 12.4%, which was well above the domestic banking peers’ average net return on equity of 8.9%.”
Tan Sri Teh further added, “Despite the challenging economic condition in 2021, the Public Bank Group was able to maintain a stable dividend payout. A second interim dividend of 7.7 sen per share was paid on 22 March 2022. Together with the first interim dividend of 7.5 sen paid in September 2021, shareholders would have received a total dividend of 15.2 sen for 2021, an increase from 13 sen for 2020.”
Total dividends paid amounted to RM2.95 billion or 52.2% payout of the Group’s net profit in 2021.
Proactive Assistance to Customers Affected by COVID-19 and Flood
The Public Bank Group remained committed to assist customers facing financial constraints amid the COVID-19 pandemic. Since the beginning of the pandemic, the Group has proactively engaged affected borrowers.
Tan Sri Teh said, “To date, the Public Bank Group has assisted about 24% of its borrowers with total loans of more than RM80.0 billion through various Repayment Assistance Programmes, benefitting 438,000 individuals and businesses.”
The Public Bank Group had also been actively promoting special financing schemes initiated by the Government and BNM to assist the SMEs in overcoming the COVID-19 challenges. Overall, the Group approved about RM3.4 billion for over 17,700 SME businesses under these special financing schemes.
Repayment assistance is not limited to only customers affected by the pandemic but also for customers who experience unfortunate events, such as floods. Recently, severe floods in several states in the country has affected many livelihoods. For customers who were affected by the floods, Public Bank has swiftly extended assistance to help them weather through their financial difficulties. To date, the Group has approved flood moratorium amounting to about RM1.8 billion.
Tan Sri Teh said, “Despite the expiry of some of the loans under the PEMULIH repayment assistance scheme, the Public Bank Group will continue to proactively provide further repayment assistance. The Group will also continue to provide financing support to SMEs.”
Healthy Loans and Customer Deposits
The Public Bank Group continued to focus on financing of residential properties and passenger vehicles as well as lending to SMEs for the purchase(s) of commercial properties and working capital financing.
Tan Sri Teh highlighted that, “The Group’s total gross loans and financing grew by 3.6% to RM358.0 billion in 2021, with domestic loans growing by 3.4%. The Group continued to sustain its leading position in the domestic retail financing with market shares of 20% and 34% in residential property and commercial property financing respectively, as well as 30% market share in hire purchase financing. The Group is also a leading SME financier with 22% market share in domestic SME financing.”
Tan Sri Teh added, “In terms of funding, the Group’s total customer deposits increased by 4.0% to RM380.4 billion in 2021, with domestic deposits growing by 4.5%. In particular, the Group’s low cost current and savings deposits recorded a strong growth of 11.7% during the year.”
Superior Asset Quality
Tan Sri Teh said, “The Public Bank Group’s gross impaired loans ratio of 0.3% as at the end of 2021, was well below the banking industry’s gross impaired loans ratio of 1.4%.”
The Group’s loan loss coverage ratio stood at 360.7%, significantly higher than the banking industry’s loan loss coverage ratio of 129.0%. With the inclusion of regulatory reserves, the Group’s loan loss coverage would be higher at 383.2%.
Continued Contribution from Non-Interest Income
Non-interest income was lower by 7.3% owing to the reduction in investment income amid unfavourable market condition in 2021. However, the unit trust business as well as fee and commission income expanded by 18.1% and 13.2% respectively in 2021, complementing the Public Bank Group’s profitability.
Tan Sri Teh said, “Public Mutual, a wholly-owned unit trust management company of the Public Bank Group, remained a major contributor to the Group’s non-interest income. In 2021, Public Mutual recorded a commendable profit growth of 22.8% and captured a market share of 34.6% in the retail private unit trust industry. As at the end of 2021, Public Mutual’s total assets under management stood at RM104.6 billion, with 177 funds under its management.”
Healthy Capital and Liquidity Position
The Public Bank Group’s Common Equity Tier 1 capital ratio and total capital ratio had further strengthened to 14.5% and 17.7% respectively as at the end of 2021, as compared with 14.0% and 17.1% a year ago. The Group’s Liquidity Coverage Ratio also stood at a healthy level of 127%, above the minimum regulatory requirement of 100%.
Tan Sri Teh said, “The Public Bank Group will continue to be proactive in its capital and liquidity management in ensuring a healthy capital and liquidity position to support its long term growth as it pursues its strategic business objectives.”
Superior Returns to Shareholders
The Public Bank Group continues to deliver consistent and superior returns to its shareholders.
Tan Sri Teh highlighted, “An investor who bought 1,000 shares of Public Bank that was listed in 1967, and assuming that all rights issued were subscribed, he would now have 744,690 Public Bank shares worth RM3.4 million. Together with total gross dividend of RM1.7 million received and appreciation in share value, this would translate into an impressive compounded annual rate of return of 18.5% for each of the 54 years since 1967.”
Environmental, Social, and Governance (“ESG”)
The Public Bank Group is proactive in its role in ESG management. To further mitigate climate related risk, the Group has conscientiously been working on embedding climate-related considerations in its business strategies and risk management.
Tan Sri Teh said, “The Group is committed to the nation’s sustainability journey towards a climate-resilient economy. To this end, the Group has set new commitments to drive its sustainability goals. The Group targets to achieve RM40 billion ESG-friendly financing by 2025, of which RM25 billion financing is for purchases of energy efficient vehicles and RM15 billion financing is for affordable homes.”
Digital Initiatives
The Public Bank Group’s digital strategies are clearly mapped out in its multi-year digital roadmap which will pave the way forward for the Group to move ahead of the curve and remain competitive in the market.
Tan Sri Teh said, “In the area of digitalisation, the Group will continue to make significant investments in technology to drive innovation and maintain a competitive edge. To stay ahead, the Group has accelerated its digital initiatives and implemented its multi-year digital roadmap in light of fast moving digital and technology trends.”
The Public Bank Group has also collaborated with various solution providers to help its SME customers expand their businesses by enhancing their digital capabilities through various digital business solutions.
Over the years, the Public Bank Group has been constantly enhancing its digital platforms to provide enhanced features and better customer experience while catering to the increasing demand for online and mobile banking services. In 2021, the Group’s active subscribers to PBe and PB engage have increased by a commendable 10.6% and 27.1% respectively whilst the number of internet and mobile banking transactions grew by an impressive 27.4% and 89.6% respectively. Total transactions of PB enterprise, Public Bank’s corporate online banking, rose by an impressive 88.8% whilst new companies registered on PB enterprise increased by 53.7%.
Outlook
Since the pandemic started over the last two years, the Public Bank Group’s resilience to challenges has further strengthened. The Group is poised to deliver long term business value, supportive of the broader economic recovery in 2022.
On the Public Bank Group’s strategic direction and outlook, Tan Sri Teh commented, “Malaysia’s transition to the COVID-19 endemic phase is set to further stimulate key economic activities. This is supportive of the banking sector growth. Whilst the Public Bank Group is cautiously optimistic of the economic outlook, the Group remains mindful of the various domestic and external uncertainties which could affect the economy. The Group will continue to be vigilant and agile, balancing growth and risks amid the changing business environment to ensure long term sustainability.”
The Group’s strong balance sheet and solid asset quality will provide adequate buffer for the Group to weather against potential risks while it seizes opportunities that lie ahead.
Tan Sri Teh added, “The Group will continue to strive for business growth in its core business segments, maintaining prudent credit policies and further improving cost efficiency. Coupled with sound fundamentals, cost discipline culture and superior asset quality, the Group stands ready to pursue all business opportunities and continue generating value for its stakeholders.”
Y.Bhg. Tan Sri Dato' Sri Dr. Teh Hong Piow
Founder, Chairman Emeritus, Director and Adviser of Public Bank
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