For Immediate Release
27 March 2017
Public Bank’s 51st Annual General Meeting Held On 27 March 2017
In conjunction with Public Bank’s 51st Annual General Meeting held on 27 March 2017, 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 2016.
Performance Review
Tan Sri Teh said, “In 2016, the Public Bank Group celebrated its 50th year of operations in Malaysia. Although the operating environment was challenging, the Group kept its earnings steady and achieved another profit milestone with pre-tax profit of RM6.55 billion in 2016 as compared to RM6.49 billion in 2015. Net profit attributable to shareholders grew by 2.9% to RM5.21 billion in 2016, whilst earnings per share increased by 2.8% to 134.8 sen in 2016.”
Tan Sri Teh added, “The Public Bank Group remained top amongst its banking peers in Malaysia with the highest net return on equity of 16.5% and lowest cost to income ratio and gross impaired loans ratio of 32.3% and 0.5% respectively.”
Tan Sri Teh highlighted that, “Despite a tougher operating environment in 2016, the Public Bank Group’s loans and deposits increased by 7.5% and 2.9% respectively, higher than the industry’s loans and deposits growth of 5.3% and 1.5% respectively. As a result, market shares of loans and deposits in the domestic market have further improved.”
Tan Sri Teh added, “In view of the Group’s favourable performance in 2016, a second interim dividend of 32 sen was paid on 28 February 2017. Together with the first interim dividend of 26 sen paid in August 2016, the shareholders would have received a total dividend of 58 sen per share for 2016.” The total dividends paid for 2016 was RM2.24 billion, representing a payout of 43.0% of the Group’s net profit for 2016.
Above-industry Growth in Loans and Customer Deposits
The Public Bank Group’s lending activities to the retail banking segment remained its key strategic focus, driven by the extension of credit mainly for the purchase of residential properties and passenger vehicles as well as commercial lending to small and medium enterprises. Collectively, this formed 85% of the Group’s total loans and financing as at the end of 2016.
Tan Sri Teh further added, “As a result of above industry loans growth, the Group’s domestic loans market share continued to improve, from 17.4% as at the end of 2015 to 17.7% as at the end of 2016. The Group retained its top position in the domestic financing for purchases of residential properties, commercial properties and passenger vehicles, with market shares of 19.4%, 34.7% and 29.6% respectively as at the end of 2016.
On the funding side, the Group continued to achieve above industry customer deposits growth amid challenges encountered in the deposits market. This led to a further increase in the domestic market share of customer deposits to 16.7% as at the end of 2016, from 16.6% a year ago.”
Superior Asset Quality
Tan Sri Teh said, “The Public Bank Group’s asset quality remains the best amongst Malaysian banking groups. Gross impaired loans ratio remained low at 0.5% in 2016 and was well below the banking industry’s gross impaired loans ratio of 1.6%.”
The Group's loan loss coverage ratio stood at 102.7% as at the end of 2016 which was higher and more prudent than the Malaysian banking industry’s ratio of 90.2%. The Group’s loan loss coverage was significantly higher at 248.5% with the inclusion of regulatory reserves.
International Operations
In 2016, the Public Bank Group further expanded its operations in Vietnam with the transformation of VID Public Bank from a joint venture bank to a 100% foreign-owned bank in Vietnam. The acquisition of the remaining 50% equity interest in VID Public Bank was completed and VID Public Bank was renamed as Public Bank Vietnam Limited on 1 April 2016.
The Group’s overseas operations recorded a 8.5% growth in pre-tax profit from RM572.2 million in 2015 to RM620.7 million in 2016, contributing 9.5% to the Group’s pre-tax profit in 2016.
Steady Net Income Growth
In 2016, the Group’s total net income increased by 4.3% to RM9.96 billion, supported by continued growth in net interest income as well as fee and commission income. Besides sustaining a healthy loans growth and resilient deposits structure which contributed to the Group’s net interest income growth, the Group has continued to emphasise on growing its fee-based revenue.
Tan Sri Teh said, “In 2016, the Group’s unit trust management business and transactional banking fee income remained positive, contributing two-thirds of the Group’s total non-interest income. Public Mutual, the Group’s wholly-owned unit trust management company, recorded a pre-tax profit growth of 5.9% in 2016 and remained the market leader in the private unit trust industry with a retail market share of 46.8%. Public Mutual’s total assets under management stood at RM70 billion with 133 funds under its management.”
Stable Capital Position
The Public Bank Group’s capital position remained stable with its common equity Tier I capital ratio, Tier I capital ratio and total capital ratio standing at 11.4%, 12.2% and 15.5% respectively as at the end of 2016, after deducting second interim dividend.
Tan Sri Teh commented that, “The Group will continue to be proactive in maintaining a healthy level of capital at all times to support the Group’s business growth strategies whilst maximising its shareholders’ return.”
Superior Returns to Shareholders
The Public Bank Group’s ability to deliver consistent and excellent returns to its shareholders, even during challenging times, clearly demonstrates 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 RM2.94 million as at 31 December 2016. In addition, he would have received total gross dividends of RM1.16 million. This translates into a total value of RM4.10 million, representing a remarkable compounded annual rate of return of 19.0% for each of the 49 years since 1967.”
Recognition of Banking Excellence
Tan Sri Teh commented that, “The Public Bank Group continued to garner international and national awards in recognition of its banking excellence.” Some of the notable awards received include:
- Best Domestic Bank in Malaysia 2016 by FinanceAsia
- 50 Years of Asian Banking Excellence Award by FinanceAsia
- Best Bank in Malaysia 2016 by Alpha Southeast Asia
- Best Bank in Malaysia 2016 by Euromoney
- Best Retail Bank in Malaysia 2016 by The Asian Banker
- Strongest Bank by Balance Sheet in Malaysia 2016 by The Asian Banker
- Best Domestic Bank in Malaysia 2016 by Asiamoney
- Best Domestic Bank in Malaysia 2016 by The Asset
- Domestic Retail Bank of the Year - Malaysia 2016 by Asian Banking & Finance
- Bank of the Year in Malaysia 2016 by The Banker
- Malaysia Automotive Finance Company of the Year 2016 by Frost & Sullivan
- The BrandLaureate Best Choice Brand Award in Leadership in Banking 2015-2016 by Asia Pacific Brands Foundation
- The BrandLaureate Industry Champion Brand Icon Leadership Award for Banking 2016 by Asia Pacific Brands Foundation
- The Asset Platinum Award 2016 for Excellence in Governance, CSR and Investor Relations by The Asset
- Corporate Governance Asia Recognition Award 2016 for Malaysia (Icon on Corporate Governance) by Corporate Governance Asia
- The Edge Billion Ringgit Club Corporate Awards 2016: Highest Growth in Profit Before Tax Over Three Years Award for Super Big Cap Companies – Companies With More Than RM40 billion Market Capitalisation by The Edge Billion Ringgit Club
Outlook
On the strategic directions and outlook for the Public Bank Group, Tan Sri Teh commented that, “Notwithstanding the tougher operating environment ahead, the Group will continue to focus on expanding its businesses organically by sustaining its presence and positions in the domestic retail segment.
As the Group moves beyond its 50th year, we are confident of continued profitability to sustain the Group’s position as a premier bank of excellence.”
Shareholders at the Bank's 51st Annual General Meeting
Y. Bhg. Tan Sri Dato' Sri Dr. Teh Hong Piow giving his welcoming address
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