A+ A A-
Search From :
Between :
Public Bank Achieves 22% Growth in Pre-Tax Profit in the First Nine Months of 2010

For Immediate Release

18 October 2010

Public Bank Achieves 22% Growth in Pre-Tax Profit in the First Nine Months of 2010

The Public Bank Group achieved a pre-tax profit of RM2.96 billion for the first nine months of 2010, representing a 22% growth from the corresponding period in 2009. Over the same period, the Group recorded a net profit of RM2.20 billion, 20% higher as compared to RM1.84 billion achieved in the corresponding period in 2009.

On a quarterly basis, the Public Bank Group surpassed the RM1 billion mark for the first time by recording a pre-tax profit of RM1.05 billion in the third quarter of 2010. This represents a strong growth of 7% as compared to the pre-tax profit of  RM982 million in the second quarter of 2010.

The Public Bank Group's results translate into earnings per share of 63.0 sen for the first nine months of 2010 and an annualised net return on equity of 26.0%.

Highlights of the Public Bank Group's Performance in the First Nine Months of 2010

  • Pre-tax profit of the Group increased by 22% to RM2.96 billion as compared to RM2.42 billion in the previous corresponding period, on the back of a strong 15% growth in net interest and finance income.
  • Net profit attributable to shareholders increased by 20% to RM2.20 billion as compared to RM1.84 billion in the previous corresponding period.
  • Annualised net return on equity stood at 26.0%.
  • Earnings per share of 63.0 sen was 17% higher as compared to 53.7 sen in the first nine months of 2009.
  • Cost-to-income ratio improved further to 33.2% from 34.6% in the previous corresponding period, and is significantly lower than the industry’s cost-to-income ratio of 48.4%.
  • Total assets increased to RM220.6 billion as at the end of September 2010.
  • Total loans and advances of the Group grew by RM14.1 billion or an annualised growth rate of 13.7% to reach RM151.7 billion as at the end of September 2010, driven by strong lending growth in the domestic market at an annualised rate of 16.1%.
  • The Group's core customer deposits grew at an annualised rate of 12.2%, supported by domestic core customer deposits annualised growth rate of 14.7%.
  • The gross impaired loans ratio of the Group as at the end of September 2010 remained low at 1.2% as compared to the industry’s gross impaired loans ratio of 3.4% and an improvement from the gross impaired loans ratio of the Group of 1.3% as at the end of 2009.
  • The Group's loan loss coverage of 140.2% continues to be one of the highest and most prudent in the Malaysian banking industry.
  • The Tier 1 capital ratio and risk-weighted capital ratio of the Group remain healthy at 9.8% and 13.6% respectively as at the end of September 2010.

Highlights of the Public Bank Group’s Performance for the Third Quarter as compared to the Second Quarter of 2010

  • Pre-tax profit grew by 7% or RM69 million to RM1.05 billion in the third quarter of 2010.
  • Net profit attributable to shareholders grew by 6.6% to RM783 million.

Profit Performance Remains Consistently Strong
The improved profit performance of the Public Bank Group for the first nine months of 2010 was mainly attributed to the strong growth in net interest and finance income and higher non-interest income.

The three increases in the Overnight Policy Rate in 2010 totalling 0.75% translated into an improvement to the Public Bank Group’s net interest margin. The improved net interest margin, coupled with the strong organic growth in loans and core customer deposits, led to the Group’s net interest and finance income improving by RM525 million or 15% in the first nine months of 2010 as compared to the corresponding period in 2009.

Non-interest income of the Public Bank Group also recorded a commendable growth of 18% as compared to the corresponding period in 2009, mainly driven by the increase in fee income generated from the Group’s unit trust management and foreign exchange businesses.

Strong Growth in Domestic Lending Business
In tandem with the improved economic conditions in the country, the Public Bank Group recorded a strong increase in total loans and advances of RM14.1 billion, a 10.3% growth for the first nine months of 2010 or a 13.7% annualised growth rate, to reach RM151.7 billion as at the end of September 2010. In particular, domestic loans grew at a stronger annualised rate of 16.1%. This has led to a higher market share of the domestic lending business of 16.2% as at the end of August 2010, as compared to 15.9% as at the beginning of the year.
 
The lending activities of the Public Bank Group remained focused on the retail sector, particularly in loans to mid-market commercial enterprises as well as loans for the financing of residential properties and the purchase of passenger vehicles, which accounted for 78% of the total loan portfolio of the Group as at the end of September 2010.

In the first nine months of 2010, the Public Bank Group’s loan growth indicators remain robust with domestic retail loan approvals increasing by 9% as compared to the corresponding period of 2009. In particular, domestic loan approvals for hire purchase grew at an impressive rate of 17%. Over the same period, the total loan applications received by the Group increased by 16% as compared to the corresponding period a year ago.

For the first nine months of 2010, the Public Bank Group continued its strong support of the Government’s effort to promote small- and medium-sized enterprise (“SME”) activities with the approval of RM7.9 billion of loans to domestic SMEs, accounting for more than 20% of the Group's total domestic loans approved of RM38.2 billion in the same period.

Sustained Strong Asset Quality
The Public Bank Group's asset quality remained strong as at the end of September 2010. Under the more stringent criteria on the classification of impaired loans under FRS 139, the Group's impaired loans ratio as at the end of September 2010 remained low at 1.2%, which is approximately one-third that of the banking industry's gross impaired loans ratio of 3.4% as at the end of August 2010. The Group’s impaired loans ratio has also shown improvement as compared to the impaired loans ratio of 1.3% as at the end of 2009.

The Public Bank Group's loan loss coverage ratio remains one of the highest at 140.2%, as compared to the banking industry's loan loss coverage ratio of 95.0% as at the end of August 2010 despite that more than 90% of the impaired loans outstanding are secured.

The strong asset quality of the Public Bank Group is due to, inter alia, its prudent lending policies and strong risk management practices, as well as the extensive recovery efforts undertaken by the Group.

Healthy Growth of Domestic Core Customer Deposits
Domestic core customer deposits grew by 11.0% in the first nine months of 2010, or an annualised growth rate of 14.7%, against the backdrop of a marginal 2.2% growth in the domestic industry’s core customer deposits for the first eight months of 2010.

The strong domestic core deposit growth of the Public Bank Group is mainly supported by steady inflows of deposits, particularly fixed deposits and savings deposits which outperformed the growth of such deposits in the domestic banking system. Domestic fixed deposits grew by 13.7% for the first nine months of 2010 against the domestic industry’s fixed deposits growth of 1.3% for the first eight months of 2010. The Group’s domestic savings deposits grew by 5.7% over the nine month-period as compared to the 1.6% decline in savings deposits in the domestic banking system for the first eight months of 2010. 

Improved Earnings of the Group’s Overseas Operations
For the first nine months of 2010, the Public Bank Group’s overseas operations recorded a 14% improvement in earnings, due mainly to the decline in loan impairment allowances.

The Public Bank Group's expansion plan in its overseas operations remains focused on its Hong Kong and Cambodian operations. The Group currently has a network of 81 branches in Hong Kong and 3 branches in Shenzhen in the People’s Republic of China, with 2 new branches to be opened in Hong Kong in the fourth quarter of 2010. Cambodian Public Bank Plc, a wholly-owned subsidiary of Public Bank, is the largest bank in Cambodia by balance sheet size and presently has 20 branches, with another branch targeted to be opened in the fourth quarter of 2010.

Expansion in Non-interest Income
The Public Bank Group recorded an 18% growth in non-interest income in the first nine months of 2010, mainly attributed to its unit trust management business and its foreign exchange business.

The Public Bank Group continued to develop its fee-based income from unit trust, bancassurance and wealth management products, in order to further enhance the Group’s profitability and return on equity.

Public Mutual Berhad (“Public Mutual”), the Public Bank Group’s wholly-owned unit trust fund management subsidiary, continues to maintain its market leadership position in the private unit trust industry with an overall market share of 43%, whilst its market share in equity funds and Islamic funds stood at 59% and 55% respectively as at the end of August 2010. With 7 new unit trust funds launched over the first nine months of the year, Public Mutual currently manages a total of 79 funds with over 100 billion units in circulation. In the first nine months of 2010, Public Mutual’s pre-tax profit grew by 30% to RM199 million from RM153 million in the corresponding period in 2009. Over the same period, net assets under management of Public Mutual rose to RM39.3 billion, 16% higher as compared to RM33.8 billion a year ago. Leveraging on the Group’s large unit trust consultants force and distribution channels through the branches of Public Bank, the Group aims to expand its unit trust customer base which currently exceeds 2.36 million accounts.

In the third year of its strategic alliance with ING Group on bancassurance distribution, the Public Bank Group will continue its efforts to further build the bancassurance sales force and infrastructure to drive the expansion of the Group's bancassurance business in the long term.

As part of the bancassurance initiative, the Public Bank Group and ING Management Holdings (Malaysia) Sdn Bhd had jointly applied to Bank Negara Malaysia for a Family Takaful licence, where upon approval was obtained on 1 September 2010. The Group envisages further growth avenue to expand its fee-based income through the family takaful insurance business when the operations of the joint venture commence as planned by the first half of 2011.

Capital Position Remains Healthy
The Public Bank Group’s capital position remains healthy, with its Tier 1 capital ratio and risk-weighted capital ratio standing at 9.8% and 13.6% respectively as at the end of September 2010.

Based on the recent announcement by the Basel Committee on Banking Supervision, the Public Bank Group’s capital position under the new capital regime is expected to remain favourable in support of the Group’s business growth whilst maximising shareholders’ returns. The Group will continue to monitor the latest developments of the Basel III proposals and address the potential impact on the Group’s capital requirements by realigning existing capital management strategies from time to time.

Group Prospects
The Malaysian economy continues to register a strong growth of 8.9% in the second quarter, supported by sustained expansion in domestic demand and continued robust growth in external demand. Higher private consumption, improved conditions for SMEs and increased public sector spending contributed to the higher domestic demand. While external developments may result in a moderation in the pace of growth, the Public Bank Group continues to operate in a healthy domestic operating environment due to favourable employment conditions, sustained consumer and business sentiments as well as the accommodative policy environment promoted by Bank Negara Malaysia.

The Public Bank Group’s solid performance for the first nine months of 2010 reaffirms the proven business strategies of the Group. Leveraging on its strong PB Brand, the Group will continue to pursue strong organic growth strategies in its lending and deposit-taking businesses, accelerate its fee-based revenue and further enhance its return on equity. The Group will also continue to reinforce its prudent risk management practices in sustaining its superior asset quality whilst upholding its strong corporate governance culture and practices.

Barring unforeseen circumstances, the Public Bank Group is expected to continue to record satisfactory performance for the rest of 2010.


Tan Sri Dato’ Sri Dr. Teh Hong Piow
Chairman

* * * * * * * *

Y.Bhg. Tan Sri Dato' Sri Dr. Teh Hong Piow
Chairman of Public Bank
* * * * * * * *
Budget 2011

For Immediate Release

15 October 2010

Budget 2011

First of all, we would like to congratulate the Honorable Prime Minister and Minister of Finance for the growth-friendly budget, in particular for the significant efforts to increase private investment in Malaysia. The budget is pragmatic in that it strikes a delicate balance between the need to boost the domestic economy and ensure economic prosperity in this challenging external environment and the need to reduce the Government's fiscal deficit. Based on the expected public sector's deficit of 5.4% of GDP for 2011 compared to 5.6% for 2010, the Government is committed to gradually consolidate and improve its financial position.

Although the global economy will remain challenging in which advanced economies will experience anemic growth with high unemployment and high sovereign debt, the Malaysian economy is expected to remain healthy. The 6% growth target for 2011 - as also envisaged in the Tenth Malaysia Plan - is achievable. Malaysia has strong economic fundamentals - such as high savings, modest inflation, healthy labour market, strong external position and strong banking sector - which can be further leveraged to support economic activity.

Coupled with strong household and corporate balance sheets, we expect low interest rates and steady credit flows will continue to support our domestic growth. At the same time, Malaysia has a strong competitive advantage which can be leveraged, particularly to increase intra-regional trade. The banking sector in Malaysia will continue to remain strong and supportive of our economic growth, given its strong capitalisation and strong asset quality.

The series of measures in Budget 2011 will continue to support the domestic economy by attracting more private investment. The proposed measures to intensify public-private partnership will further enhance private sector involvement in economic activity and help the Government hasten the process of economic transformation towards a high-income economy by 2020. Also, the proposed infrastructure projects such as new highways, power plants, and medical institutions will boost aggregate domestic demand and productive capacity of the economy in future. The high-impact strategic development projects such as the Development of Kuala Lumpur International Financial District and the implementation of the Mass Rapid Transit in Greater KL will raise the level of economic activity in Malaysia.

The proposed measures to further enhance high-value added activities in the electrical and electronics industry; propel oil, gas and energy industry; invigorate the agricultural sector; energise the tourism industry; revitalise palm oil and related industries and enhance the information and communication technology will not only benefit small- and medium-sized businesses (SMEs) in Malaysia but will also increase high-valued activities in the country. These efforts will support growth of SMEs in Malaysia, in line with the Government's objective of transforming SMEs to be more innovative and vibrant in the future. In the Tenth Malaysia Plan and also in the New Economic Model, SME segments form an important component to drive future growth of the Malaysian economy.

The budget is also caring in that it is aiming at increasing home ownership, particularly among young adults such as graduates who have just joined the workforce with income less than RM3,000. The Skim Rumah Pertamaku will allow house buyers to obtain a 100% loan without having to pay the 10% down payment to purchase houses below certain price. The stamp duty exemption of 50% on instruments of transfer on a house price not exceeding RM350,000 will help first-time house buyers.

Tan Sri Dato’ Sri Dr. Teh Hong Piow
Chairman

* * * * * * * *

Y.Bhg. Tan Sri Dato Sri Dr. Teh Hong Piow
Chairman of Public Bank
* * * * * * * *
PR-logo.gif Esso-Mobil-with-Tagliner(ENG).gif pr-img.jpg
 

Joint Press Release
For Immediate Release

1 October 2010

Public Bank, Esso and Mobil Launch PB-Esso Mobil Visa Co-Brand Cards

The strategic alliance between Public Bank Berhad and Esso Malaysia Berhad and ExxonMobil Malaysia Sdn Bhd has culminated in a long-term mutual collaboration with the launching of the PB–Esso Mobil Visa Co-Brand Gold Credit and Debit Cards.  Esso Malaysia Berhad and ExxonMobil Malaysia Sdn Bhd are subsidiaries of ExxonMobil in Malaysia and market high quality fuels under the Esso and Mobil brands respectively.

The PB-Esso Mobil Visa Gold Credit and Debit Cards were launched on 28 September 2010 at the Esso service station in Jalan Ampang, Kuala Lumpur by Ms Chong You Lin, Senior General Manager of PB Card Services, Public Bank Berhad and Puan Faridah Ali, Retail Business Director of Esso Malaysia Berhad.

Public Bank is constantly seeking to provide Malaysian consumers with greater card benefits and rewards that complement their lifestyle needs. Consumers today are savvy and sophisticated in making purchasing decisions. Society has also become highly mobile with increased dependency on private vehicles and high quality fuel.  The PB-Esso Mobil Co-Brand cards focus on the needs of drivers and support their affiliation to the Esso and Mobil brands. 

 “Public Bank is proud to be in collaboration with Esso and Mobil on this exciting card programme. With their unique benefits, we expect the PB-Esso Mobil Visa Gold Credit and Debit Card to appeal to a wide customer spectrum. They would draw interest from existing as well as potential customers of Esso and Mobil alike,” commented Ms Chong.

"We’ve been working with Public Bank for a long time, and we look forward to continued growth with this new product.  The cards offer a smart way to pay for quality Synergy fuels at our network of 560 Esso and Mobil stations nationwide.  The cash rebates are of great value and help cardholders to save even as they spend," said Faridah.

The PB-Esso Mobil Visa Gold Credit Card is designed to appeal to income earners of RM18,000 and above per annum, whilst the PB-Esso Mobil Visa Debit Card is ideal for those who do not meet the age or income eligibility requirement, or those who just want to better monitor their finances.

In light of the rising cost of living, cash rebates are the preferred option for discerning consumers to ease household expenditures, and the PB-Esso Mobil Co-brand Cards aim to do just that.  The PB-Esso Mobil Gold Visa Credit Card and PB-Esso Mobil Visa Debit Card offer cash rebates of up to 5% and 1% respectively for any purchase transaction at Esso or Mobil service stations. Moreover, cardholders can enjoy 0.5% cash rebate for other retail purchases made elsewhere.  Earning the cash rebates is simple with no carry forward balance required.  Cash rebates earned will be credited monthly into cardholders' card account.

In conjunction with the launch of the new cards, an additional 3% cash rebate will be awarded to the PB-Esso Mobil Gold Credit Cards for cardholders who use the card at Esso or Mobil service stations during the 6 months promotion period until 31 March 2011.

The PB-Esso Mobil Gold Visa Credit Card and PB-Esso Mobil Visa Debit Card are also offered with the annual fee waived for life with no conditions, making them truly consumer-friendly cards. 

For more information on the PB-Esso Mobil Visa Co-Brand Cards, kindly contact PB Card Services Call Centre at 03-2176 8000 or log on to www.pbebank.com.

About Public Bank
Public Bank Berhad is a leading financial institution in Malaysia with a significant banking and financing presence in Hong Kong and China, Cambodia, Vietnam, Laos and Sri Lanka. The Public Bank Group’s core businesses are in the provision of banking and financial services such as retail commercial banking, corporate banking, investment banking, stock broking, fund management, bancassurance, wealth management services and Islamic banking. With a domestic branch network of 250 branches and 105 banking branches overseas as well as a group staff strength of over 17,000, the Group has a strong franchise in its lending and deposit taking business. In Malaysia, Public Bank is an industry leader in home mortgage financing, passenger vehicle hire purchase financing and commercial lending to small- and medium-sized enterprises. Public Bank is also a record award-winning bank in Malaysia, and the third largest domestic bank with a market capitalization of RM42.8 billion as at 27 August 2010.  Public Bank continues to be accorded strong credit and financial strength ratings due to its prudent management, consistent financial performance, strong asset quality and strong risk management. For further information, visit www.pbebank.com.

About ExxonMobil in Malaysia
The ExxonMobil Subsidiaries in Malaysia are a group of companies, which have business activities ranging from upstream exploration and production of oil and gas to the refining and marketing of petroleum products. In the upstream, ExxonMobil Exploration and Production Malaysia Inc. produces about a fifth of the nation's crude oil and supplies about half of Peninsular Malaysia's natural gas needs.  In the downstream, three ExxonMobil subsidiaries, Esso Malaysia Berhad, ExxonMobil Malaysia Sdn Bhd and ExxonMobil Borneo Sdn Bhd operate a network of 560 service stations throughout Malaysia.  Esso Malaysia Berhad also operates an 88,000 barrel a day refinery in Port Dickson that refines crude oil and produces a variety of products, including petrol, diesel, jet fuel, cooking gas and chemical feedstocks. To learn more, visit www.exxonmobil.com.my.

* * * * * * * *

Ms Chong You Lin, Senior General Manager of PB Card Services, Public Bank Berhad (right) and Puan Faridah Ali, Retail Business Director of Esso Malaysia Berhad (left) during the launch ceremony.
* * * * * * * *
Public Bank Gives Aid Totalling RM100,000

For Immediate Release

7 September 2010

Public Bank Gives Aid Totalling RM100,000

The Kuala Lumpur Traffic Police Club Fund and the World Congress of Accountants 2010 (WCOA 2010) hosted by the Malaysian Institute of Accounting (MIA) received contributions of RM50,000 each from the Founder and Chairman of Public Bank, Tan Sri Dato’ Sri Dr. Teh Hong Piow today.

According to Tan Sri Teh, “These two contributions totalling RM100,000 are in line with Public Bank’s CSR commitment towards the well being of our society and the betterment of the accounting professionals”.

The donation of RM50,000 to the Kuala Lumpur Traffic Police Club Fund will be used for the welfare of the Kuala Lumpur Traffic Police personnel to organise religious activities such as tahlil prayers and social activities which include breaking of fast and Hari Raya Aidilfitri gatherings as a token of appreciation to the traffic police personnel who have worked very hard in carrying out their duties and responsibilities, rain or shine especially during this festive time.

At the same time, the World Congress of Accountants 2010 hosted by the MIA also received a sponsorship RM50,000 from Public Bank.  The congress, which will attract a total of 6,500 accounting professionals worldwide with the theme “Accountants: Sustaining Value Creation” is scheduled to be held from 8 to 11 November 2010 at the Kuala Lumpur Convention Centre and the Prime Minister of Malaysia, Datuk Seri Najib Tun Razak will officiate the event and also deliver the keynote address.  Besides the MIA, the other co-organisers are CIMA, ACCA and CPA Australia.

The Bank’s contribution will be used to sponsor 6,500 water bottles which is in line with the WCOA 2010 green initiative and will be given to all delegates.

* * * * * * * *


Tan Sri Teh presenting a mock cheque to ACP Rusli Bin Mohd Noor, Chief of the Kuala Lumpur Traffic Police at Menara Public Bank



Tan Sri Teh presenting a mock cheque to Ms. Christina Constance Foo, Vice President of MIA for the sponsorship of the World Congress of Accountants 2010 at Menara Public Bank
* * * * * * * *
PR-logo.gif ING-Logo.gif pr-img.jpg
 

Media Statement
For Immediate Release

1 September 2010

Bank Negara Malaysia approves ING & PBB Group's Joint Application for Family Takaful Licence

ING Management Holdings (Malaysia) Sdn Bhd (ING), Public Bank Berhad (PBB) and Public Islamic Bank Berhad (PIBB) (a wholly-owned subsidiary of PBB) are pleased to announce that the companies’ joint application for a Family Takaful licence has been approved by Bank Negara Malaysia (BNM).

ING, PBB and PIBB will set up a joint venture company to carry out the family takaful business with equity participation of 60% (ING); 20% (PBB) and 20% (PIBB). The joint venture company will focus on increasing the Takaful penetration domestically and to develop Malaysia as an international Islamic financial hub. The joint venture will leverage on ING and the PBB Group’s leadership and existing infrastructure in the financial industry. 

The joint venture company is envisaged to be a leading Family Takaful provider with a built up Takaful agency force of 15 000 agents in the long term; the Takaful products will be promoted via the multi distribution channel of Tied Agency, Bancatakaful and Employee Benefits which currently exists in ING and the PBB Group.

The joint venture company is targeted to be fully operational by the first half of 2011, and shall further contribute towards the Malaysia International Islamic Financial Centre’s aspiration to establish Malaysia as the centre for takaful and retakaful.

ING and the PBB Group officially began their 10-year strategic Bancassurance alliance in 2008 and together, ING and the PBB Group have become the fastest growing Bancassurance provider in the country. The award of the Family Takaful licence is a significant step for ING and the PBB Group as the companies enter the growing Islamic financial services market, offering consumers greater choice and responding to the market’s growing needs and potential. 

About ING Insurance Berhad

ING Insurance Berhad is part of the ING Group, a global financial institution of Dutch origin offering banking, investments, life insurance and retirement services to over 85 million private, corporate and institutional clients in more than 40 countries. With a diverse workforce of about 105,000 people, ING is dedicated to setting the standard in helping its clients manage their financial future.

In Malaysia, ING Insurance provides all classes of insurance ranging from insurance (life and general), employee benefits and bancassurance. ING Insurance has the financial strength, experience, service centre network, as well as a team of well-trained staff and agents to serve its over 1.5 million customers nationwide. As at the end of 2009, its total asset worth was RM 12.4 billion, with a paid-up capital of RM 140 million.

About Public Bank Berhad

PBB is principally engaged in banking and finance company businesses and the provision of related financial services. PBB together with its subsidiaries and associated companies (PBB Group) are involved in banking, Islamic banking, investment banking, financing, credit card business, stock broking, provision of finance to purchasers of licensed public vehicles, sale of trust units and management of unit trust funds, bancassurance and general insurance and other related financial services such as trustee and nominee services.

To-date, the PBB Group has an extensive network of 250 branches spread across Malaysia and its business has expanded to countries in the Asian region, with more than 100 branches spanning Hong Kong, China, Cambodia, Vietnam, Laos and Sri Lanka. PBB’s wholly-owned subsidiary, Public Mutual Bhd, is the market leader in private unit trust industry with an overall market share of 43.2% as at end July 2010. Public Mutual Bhd has the largest market share of the industry’s Islamic assets under management with market share of 55.6% as at end July 2010.

 About Public Islamic Bank Berhad

PIBB, a wholly-owned subsidiary of PBB, commenced operation as an Islamic subsidiary of PBB on 1 November 2008 following the vesting of the Islamic banking operations of PBB which was previously carried out under the PBB Islamic window. The setting-up of PIBB reflects PBB Group’s strong commitment to further enhance its Islamic banking business in line with the objective of Bank Negara Malaysia to position Malaysia as a major international Islamic financial hub.

PBB first launched its interest-free banking services in 1993 and has made significant strides in the Islamic banking industry in Malaysia. For the last 5 years, the Islamic financing of the PBB Group has continuously recorded double-digit growth and this is similarly reflected in growth in the customers’ deposits. Leveraging on the PBB Group’s proven management capability, strong PBB Brand and its large network of branches, PIBB is poised for further growth.

********

 
PR-logo.gif ING-Logo.gif pr-img.jpg

Joint Press Release
For Immediate Release

1 September 2010

Public Bank and ING Insurance Launch PB-ING BIC Income Plan


Unlimited upside potential returns via Brazilian, Indian and China Markets

Public Bank Berhad (Public Bank) and ING Insurance Berhad (ING Insurance) unveiled the PB-ING BIC Income Plan today, following the success of the PB-ING Asian Jewels Plan launched in July 2009.

The PB-ING BIC Income Plan is a five-year single premium investment-linked insurance plan which has been designed to provide investors with potential capital growth opportunities from the performance of equity markets in Brazil, India and China. The Plan is to invest 97% of the total premium paid into Australian Dollar (AUD) denominated Notes and customers are assured that they will receive return of 100% total premium paid in AUD Nominal Amount upon the Plan’s maturity in addition to unlimited upside potential.

The PB-ING BIC Income Plan is open for subscription for a 21-day period only. It starts from 1 September 2010 to 21 September 2010. Entry age is from 30 days old to 70 years of age. The minimum single premium is RM 30,000. Customers can purchase this plan from any Public Bank branches across nationwide from 1 September 2010 onwards.

According to Tan Sri Dato’ Sri Tay Ah Lek, Managing Director, Public Bank Berhad, “The 3 markets are ideally selected for this Plan as they respectively play important roles in the current global economy. These markets have proved to achieve faster growth rates as compared to many matured markets, thus generating good prospects of growth for the investors. This resonates with the International Monetary Fund’s estimation that China is the largest contributing country to global economic growth while Brazil and India are among the top 8 contributors.”

The PB-ING BIC Income Fund references the performance of a rule-based dynamically managed portfolio strategy. The underlying strategy implements an automatic rebalancing mechanism. During stable market conditions, the strategy’s portfolio will be invested in a basket of emerging market equities. However in volatile conditions typically associated with bear markets, the strategy will adopt a more defensive strategy and divest out of the basket of emerging market equities and invest into cash, thereby increasing the probability of a positive performance.

The Fund provides an additional return at maturity which is calculated based on the average of the 16 highest strategy values observed within the investment tenure. The performance of the underlying strategy is monitored on a quarterly basis over the 5-year investment period and out of the total 20 quarterly performances, only the top 16 performing quarters will be picked, thus helping the Fund to further maximize its returns.

The other prime benefit of the PB-ING BIC Income Plan is that it aims to provide a fixed annual coupon of up to 4.0% per annum in AUD Nominal Amount at the end of the first 4 years.

To further benefit investors, the PB-ING BIC Income Plan comes with life insurance protection against death or total and permanent disablement up to 125% of the single premium, thus making it a comprehensive investment cum protection plan.

President and CEO of ING Insurance Berhad, Dato’ Dr. Nirmala Menon said, “We are very confident with the PB-ING BIC Income Plan. The PB-ING Asian Jewels Plan with similar plan features has performed very well before and we are convinced that PB-ING BIC Income Plan will do the same. With this new Plan, consumers will have the opportunity to ride on unlimited upside potential of strong growth opportunities of 3 emerging markets on a dynamically managed portfolio strategy that has the ability to adapt to changing market conditions.”

She further added, “As the economic situation has clearly improved this year, we encourage consumers to take the advantage of the current strong stock markets to buy this Plan and benefit from the potential appreciation in value.”


About Public Bank Berhad
Public Bank Berhad is a leading financial institution in Malaysia with a significant banking and financing presence in Hong Kong and China, Cambodia, Vietnam, Laos and Sri Lanka. The Public Bank Group’s core businesses are in the provision of banking and financial services such as retail commercial banking, corporate banking, investment banking, stock broking, fund management, bancassurance, wealth management services and Islamic banking.

With a domestic branch network of 250 branches and 105 banking branches overseas as well as a group staff strength of over 17,000, the Group has a strong franchise in its lending and deposit taking business. In Malaysia, Public Bank is an industry leader in home mortgage financing, passenger vehicle hire purchase financing and commercial lending to small- and medium-sized enterprises.

Public Bank is also a record award-winning bank in Malaysia, and the third largest domestic bank with a market capitalisation of RM42.8 billion as at 27 August 2010.  Public Bank continues to be accorded strong credit and financial strength ratings due to its prudent management, consistent financial performance, strong asset quality and strong risk management.

About ING Insurance Berhad
ING Insurance Berhad is part of the ING Group, a global financial institution of Dutch origin offering banking, investments, life insurance and retirement services to over 85 million private, corporate and institutional clients in more than 40 countries. With a diverse workforce of about 105,000 people, ING is dedicated to setting the standard in helping its clients manage their financial future.

In Malaysia, ING Insurance provides all classes of insurance ranging from insurance (life and general), employee benefits and bancassurance. ING Insurance has the financial strength, experience, service centre network, as well as a team of well-trained staff and agents to serve its over 1.5 million customers nationwide. As at the end of 2009, its total asset worth was RM 12.4 billion, with a paid-up capital of RM 140 million.

********

Tan Sri Teh Accorded 1st Asian Corporate Director Recognition Award

For Immediate Release

9 August 2010

Tan Sri Teh Accorded 1st Asian Corporate Director Recognition Award

Corporate Governance Asia, the most authoritative journal on corporate governance in the region has accorded Tan Sri Dato’ Sri Dr. Teh Hong Piow, Founder and Chairman of Public Bank the inaugural Asian Corporate Director Recognition Award 2010 for Malaysia.

The award was presented to Tan Sri Teh by Mr. Aldrin Monsod, Managing Director and Publisher of Corporate Governance Asia at the Bank’s 44th Anniversary Banquet held on 7 August 2010 at the MINES International Exhibition & Convention Centre, Seri Kembangan, Selangor.  At the same event, Mr. Monsod also presented Public Bank with the Corporate Governance Asia Recognition Award 2010 for the sixth year.

The Asian Corporate Director Recognition Award recognises corporate leaders from the boards of public and private companies in Asia for their outstanding performances and contributions towards their companies’ growth, social responsibility and environmental protection as well as the efforts in raising the standards of corporate governance practice in their respective countries.

In his citation in presenting the Asian Corporate Director Recognition Award to Tan Sri Teh, Mr. Monsod said, “Tan Sri Teh is the epitome of an astute banker with unparalleled entrepreneurial leadership.  He is invariably described as Asia’s banking grandmaster and an Asian banker par excellence - a hallmark of a man who nurtured Public Bank from its humble beginnings when it first opened its doors for business on August 6 1966 with pioneer staff to what it is today.”

Mr. Aldin Monsod also commended Public Bank for continuously striving harder and committing more resources to deliver the best to its stakeholders and for enhancing shareholder value through consistent financial performance, prudent management and good corporate governance.

Mr. Monsod praised Public Bank for adopting - beginning from the second quarter of 2010 - a more stringent criteria on the classification of impaired loans under FRS 139, the accounting standard in respect of the recognition and measurement of financial instruments.

He said, “This shows your stringent policy to sustain strong asset quality, which can be attributed to prudent lending policies and strong risk management practices.  Indeed, risk management has become the buzzword in the wake of the global financial crisis.  On the part of Public Bank, we noted with admiration your continued dedication to enhance your risk management infrastructure and refine the processes to proactively manage key areas in line with the changing market environment.” 

Tan Sri Teh in his acknowledgement speech said, “I am indeed elated to receive this coveted award from such an esteemed institution known for its strong reputation worldwide.  Having a pool of talented staff and Board who shares my passion has certainly contributed towards the Bank’s success.”

Since the Bank’s inception in 1966, it has been steadfast in its adherence to the tenets of good corporate governance, which are accountability, integrity, transparency and responsible corporate conduct.

With this award, Public Bank had received a total of 26 awards of recognition and exemplary corporate excellence for 2010.

* * * * * * * *

Tan Sri Teh receiving the Inaugural Asian Corporate Director Recognition Award from Mr. Aldrin Monsod


From Left: Executive Director Dato’ Sri Lee Kong Lam, Mr. Aldrin Monsod, Tan Sri Teh Hong Piow, Tan Sri Thong Yaw Hong and Tan Sri Tay Ah Lek posing with the awards at the presentation ceremony
* * * * * * * *
First Full-Fledged Public Islamic Branch Opens in Kampung Baru, Kuala Lumpur

For Immediate Release

6 August 2010

First Full-Fledged Public Islamic Branch Opens in Kampung Baru, Kuala Lumpur

Public Islamic Bank, a wholly-owned subsidiary of Public Bank, is pleased to announce the opening of its first full-fledged Islamic branch offering Shariah - compliant products on Monday, 9 August 2010 located at Plaza RAH, Kampung Baru, Kuala Lumpur. 

The branch, headed by Encik Zulkifli Ishak provides a wide range of deposit products and investment instruments such as Wadiah Savings Account-i,  Basic Wadiah Savings Account-i, Wadiah Current Account-i,  Basic Wadiah Current Account-i, Mudharabah General Investment Account-i, Negotiable Islamic Debt Certificate-i and Shariah compliant unit trusts. In addition, financing products which include ABBA Asset Financing-i, Cash Line Facility-i and AITAB Hire Purchase-i are also offered by the branch.

Besides this full-fledged Islamic branch in Kampung Baru, Public Islamic Bank’s products and services will continue to be available throughout the Public Bank’s wide range of delivery channels which include 248 Public Bank branches nationwide, more than 1,300 ATMs and self-service machines, Internet banking and mobile channel.

As at 30 June 2010, Public Islamic Bank has total assets of RM 26.0 Billion, whilst the Bank’s Islamic financing stood at RM 15.7 Billion.  The Bank recorded a pre-tax profit of RM248.4 Million for the six-month period ended 30 June 2010.
 
Public Islamic Bank has been accorded the highest long-term and short-term financial institution ratings of AAA and P1 respectively by the Rating Agency of Malaysia for its strong balance sheet, favourable credit profile and consistent record of profitability.

********

Public Bank Achieves 22% Growth In Pre-Tax Profit in The First Half of 2010 and Declares 25% Interim Dividend

For Immediate Release

20 July 2010

Public Bank Achieves 22% Growth In Pre-Tax Profit in The First Half of 2010 and Declares 25% Interim Dividend

The Public Bank Group achieved a pre-tax profit of RM1.90 billion for the first half of 2010, representing a 22% growth from the corresponding period in 2009. Over the same period, the Group recorded a net profit of RM1.42 billion, 18% higher as compared to RM1.20 billion achieved in the corresponding period in 2009.

On a quarter-to-quarter comparison, the Public Bank Group recorded a pre-tax profit of RM982 million in the second quarter of 2010, 6% higher as compared to RM923 million in the first quarter of 2010.

The Public Bank Group's results translate into earnings per share of 40.7 sen for the first half of 2010 and an annualised net return on equity of 26.1%.

In view of the sustained strong performance of the Public Bank Group, the Board of Directors is pleased to declare a first interim dividend of 25% less 25% taxation, which will result in a total payout of RM657 million.

Highlights of the Public Bank Group's Performance in the First Half of 2010

  • Pre-tax profit of the Group increased by 22% to RM1.90 billion as compared to RM1.56 billion in the previous corresponding period, on the back of a strong 16% growth in net interest and financing income.
  • Net profit attributable to shareholders increased by 18% to RM1.42 billion as compared to RM1.20 billion in the previous corresponding period.
  • Annualised net return on equity stood at 26.1%.
  • Earnings per share of 40.7 sen was 16% higher as compared to 35.1 sen in the first half of 2009.
  • Cost-to-income ratio remains efficient at 34.6%, as compared to 48% for the industry.
  • Total assets increased to RM219 billion as at the end of June 2010.
  • Total loans and advances of the Group grew by RM10.0 billion or an annualised growth rate of 14.6% to reach RM147.6 billion as at the end of June 2010, particularly driven by strong lending growth in the domestic market at an annualised rate of 16.8%.
  • The Group's domestic core customer deposits grew at an annualised rate of 15.2%.
  • The gross impaired loans ratio of the Group as at the end of June 2010 remained low at 1.2% as compared to the industry’s gross impaired loans ratio of 3.5% and an improvement from the gross impaired loans ratio of the Group of 1.3% as at the end of 2009.
  • The Group's loan loss coverage of 133.9% continues to be one of the highest and most prudent in the Malaysian banking industry.
  • The core capital ratio and risk-weighted capital ratio of the Group remain healthy at 10.0% and 13.9% respectively as at the end of June 2010, after the payment of the first interim dividend.

Highlights of the Public Bank Group’s Performance for the Second Quarter as compared to the First Quarter of 2010

  • Pre-tax profit grew by 6% or RM59 million to RM982 million in the second quarter of 2010.
  • Net interest and financing income expanded by 6% or RM74 million to RM1.33 billion.
  • Cost to income ratio improved to 33.6% for the current quarter as compared to 35.7% in the first quarter of 2010, reflecting continued improvement in productivity and efficiency.

Continued Strong Profit Performance
The improved profit performance of the Public Bank Group for the first half of 2010 was mainly attributed to the strong growth in net interest and financing income, higher non-interest income and lower loan impairment allowances.

The two increases in the Overnight Policy Rate (“OPR”) in March 2010 and May 2010 totalling 0.5% translated into a direct improvement to the Public Bank Group’s net interest margin. With the improved net interest margin, coupled with the strong organic growth in loans and customer deposits, the Group’s net interest and financing income improved by RM350 million or 16% in the first half of 2010 as compared to the corresponding period in 2009. The recent further increase in OPR by 0.25% announced by Bank Negara Malaysia on 8 July 2010 should result in further improvement to the Group’s net interest margin in the second half of the year.

Non-interest income of the Public Bank Group also recorded a commendable growth of 19% as compared to the corresponding period in 2009, mainly driven by the increase in unit trust management fees, higher foreign exchange income as well as higher brokerage and commission from the Group’s stockbroking activities.

The Public Bank Group’s loan impairment allowances decreased by 7% despite the strong loan growth in the first half of 2010. This was directly attributed to the continued improvement in asset quality, particularly in the Group’s overseas operations in Hong Kong.

Continued Strong Loan Growth
In tandem with the improved economic conditions in the country, the Public Bank Group recorded a strong increase in total loan and advances of RM10 billion, a 7.3% growth for the first half of 2010 or a 14.6% annualised growth rate, to reach RM147.6 billion as at the end of June 2010. In particular, domestic loans grew at a stronger annualised rate of 16.8%, leading to the increase in the Group's domestic lending market share to 16.2% as at the end of May 2010, from 15.9% as at beginning of the year. Based on the strong loan growth for the first half of 2010, the Group is on track and is well positioned to achieve its targeted loan growth rate of 15% for 2010.

The lending activities of the Public Bank Group remained focused on the retail sector, particularly in loans to mid-market commercial enterprises as well as loans for the financing of residential properties and purchase of passenger vehicles, which accounted for 78% of the total loan portfolio of the Group as at the end of June 2010.

In the first half of 2010, the Public Bank Group’s domestic retail loan approvals increased by 14% as compared to the corresponding period of 2009. In particular, domestic loan approvals for hire purchase grew at an impressive rate of 23%.

For the first half of 2010, the Public Bank Group continued its strong support of the Government’s effort to promote SME activities with the approval of RM5.5 billion of loans to domestic SMEs, accounting for more than 20% of the Group's total domestic loans approved of RM26.9 billion in the same period.

Sustained Strong Asset Quality
The Public Bank Group's asset quality remained strong as at the end of June 2010. Commencing from this quarter, the Group adopted a more stringent criteria on the classification of impaired loans under FRS 139, the accounting standard in respect of the recognition and measurement of financial instruments. Under the more stringent criteria, certain loans which are less than 3 months in default are now classified as impaired. Despite the more stringent criteria, the Group's impaired loans ratio as at the end of June 2010 remained low at 1.2%, which is approximately one-third that of the banking industry's gross impaired loans ratio of 3.5% as at the end of May 2010 and represents an improvement from the gross impaired loans ratio of 1.3% as at the end of 2009.

The Public Bank Group's loan loss coverage ratio also continue to remain one of the highest at 133.9%, as compared to the banking industry's coverage ratio of 92.2% as at the end of May 2010 despite that more than 90% of the impaired loans outstanding are secured.

The strong asset quality of the Public Bank Group is due to, inter alia, its prudent lending policies and strong risk management practices, its affluent customer base, as well as the prompt and timely loan restructuring and recovery efforts undertaken by the Group.

Healthy Growth of Domestic Core Customer Deposits
Domestic core customer deposits grew by 7.6% in the first half of 2010, or an annualised growth rate of 15.2%, against the backdrop of a negligible 0.15% growth in the domestic industry’s core customer deposits for the first five months of 2010.

The strong domestic core deposit growth of the Public Bank Group is mainly supported by steady inflows of deposits, particularly fixed deposits and savings deposits which outperformed the contraction in such deposits in the domestic banking system. Domestic fixed deposits grew by 9.6% for the first six months of 2010 despite the contraction in the domestic industry’s fixed deposits of 0.3% for the first five months of 2010. Similarly, the Group’s domestic savings deposits grew by 3.7% over the 6 month-period as compared to the 2.7% decline in savings deposits in the domestic banking system for the first five months of 2010. 

Improved Performance of the Group’s Overseas Operations
For the first half of 2010, the Public Bank Group’s overseas operations recorded an improvement in earnings, particularly in its operations in Hong Kong which recorded a significant improvement in earnings by 72% due to the decline in loan impairment allowances.

The Public Bank Group's expansion plan in its overseas operations remains focused on its Hong Kong and Cambodian operations. The Group currently has a network of 80 branches in Hong Kong and 3 branches in Shenzhen in the People’s Republic of China, with a further 2 branches in Hong Kong to be opened in the second half of 2010. Cambodian Public Bank Plc, a wholly-owned subsidiary of Public Bank, the largest bank in Cambodia by balance sheet size, presently has 19 branches, with another 8 branches targeted to be opened in the second half of 2010.

Growth in Non-interest Income
The Public Bank Group recorded a 19% growth in non-interest income in the first six months of 2010, mainly attributed to its unit trust management business and its foreign exchange business.

The Public Bank Group continued to develop its fee-based income from unit trust, bancassurance and wealth management products, in order to further enhance the Group’s profitability and return on equity.

Public Mutual Berhad, the Public Bank Group’s wholly-owned unit trust fund management subsidiary, continue to maintain its market leadership position in the private unit trust industry with an overall market share of 43%, whilst its market share in equity funds and Islamic funds stood at 59% and 54% respectively as at the end of June 2010. In the first half of 2010, Public Mutual’s pre-tax profit grew by 32% to RM130 million from RM98 million in the corresponding period in 2009. This was mainly due to strong growth in its net assets under management which stood at RM36.5 billion as at 30 June 2010, 19% higher as compared to RM30.6 billion a year ago. The Group continues to build and nurture its large unit trust consultants force, a highly effective distribution channel to drive the Group’s unit trust business, besides expanding further the distribution of unit trust through the branches of Public Bank.

In the third year of its strategic alliance with ING Group on bancassurance distribution, the Public Bank Group had so far built up a total sales force of more than 260 personnel and will continue with its efforts to further build the infrastructure to drive the expansion of the Group's bancassurance business to increase its fee-based commission income in the long run.

Capital Position Remains Healthy
The Public Bank Group’s capital position remains healthy, with its core capital ratio and risk-weighted capital ratio standing at 10.0% and 13.9% respectively as at the end of June 2010, after the payment of the first interim dividend.

The Public Bank Group continues to proactively monitor the latest developments in regard to the Basel III proposals and to address its potential impact on the Group’s capital requirements by realigning existing capital management strategies from time to time. The Group will pursue continued proactive capital management in order to maintain a healthy level of capital at all times to support the Group’s business growth whilst maximising shareholders’ returns.

Group Prospects
The economic performance of Malaysia in the first quarter of 2010, with a growth rate of 10.1% in the first quarter, amidst strengthening domestic economic activities and external demand, suggest a strong turnaround in the domestic economy in 2010. The sustained expansion in private consumption, improved conditions for SMEs and increased public sector spending contributed to higher domestic demand, which in turn translates to a healthy domestic operating environment in which the Public Bank Group operates.

The Public Bank Group’s solid performance for the first half year of 2010 reaffirms the proven business strategies of the Group. Leveraging on its strong PB brand, the Group will continue to pursue strong organic growth in its lending and deposit-taking businesses, accelerate its fee-based revenue and further improve its productivity and cost efficiency. Meanwhile, the Group will also continue to reinforce its prudent risk management practices in sustaining its superior asset quality whilst upholding its strong corporate governance culture and practices.

Barring unforeseen circumstances, the Public Bank Group is expected to continue to record satisfactory performance for the rest of 2010.


Tan Sri Dato’ Sri Dr. Teh Hong Piow
Chairman

* * * * * * * *

Y.Bhg. Tan Sri Dato' Sri Dr. Teh Hong Piow
Chairman of Public Bank
* * * * * * * *
Public Bank Sponsors RM60,000 Towards NAfMA 2010

For Immediate Release

8 June 2010

Public Bank Sponsors RM60,000 Towards NAfMA 2010

Public Bank contributed RM60,000 to the National Award for Management Accounting (NAfMA) 2010, making it the main sponsor of the Award programme for the seventh consecutive year since its inception in 2004.

NAfMA which is organized by the Malaysian Institute of Management (MIA) and The Chartered Institute of Management Accountants (CIMA) is aimed at recognizing organization which adopts best practice management accounting.

Managing Director of Public Bank, Tan Sri Dato' Sri Tay Ah Lek presented the cheque to Mr. Yeo Tek Ling, Chairman of NAfMA Organising Committee at Menara Public Bank today.

In his speech at the presentation ceremony Tan Sri Tay said, "In initiating the National Award for Management Accounting or NAfMA, MIA and CIMA are playing an important function as 'corporate integrity watchdogs'; recognising organisations with high standards of corporate governance and which adopt the highest ethical and professional standards in management accounting practices."

He also said, "Our Chairman, Tan Sri Dato' Sri Dr. Teh Hong Piow has always been a strong proponent of good corporate governance, best practices and integrity. As such, NAfMA is an award very much close to his heart. That Tan Sri Chairman walks his talk is also evident in many awards that Public Bank has received through the years. For this year alone, Public Bank has todate received 17 awards."

"Corporate governance is a benchmark of quality companies and this has not changed even in the new economy. Indeed, with the financial landscape becoming more sophisticated, there is even more of a need to remain faithful to the tried and true values of transparency, governance and accountability."

Other working partners in NAfMA include CIMA-UiTM, Asian Management Accounting Research Centre and the National Productivity Centre. This Award promotes the use of management accounting by local and multinational organisations in the quest for greater corporate excellence.
 
* * * * * * * *
Tan Sri Tay Ah Lek (right) presenting the mock cheque to Mr. Yeo Tek Ling, Chairman of NAfMA Organising Committee
* * * * * * * *