The Public Bank Group achieved another year of strong performance with a record pre-tax profit of RM4.09 billion for 2010, representing a 23% growth over 2009. In 2010, the Group recorded net profit of RM3.05 billion, 21% higher as compared to RM2.52 billion achieved in 2009. We are pleased to have delivered, yet again, a strong set of results on the back of sustainable revenue growth, efficient cost management, superior asset quality whilst maintaining prudent banking practices.

The Public Bank Group's improved financial performance in 2010 was mainly driven by the strong growth in net interest and finance income and higher non-interest income, coupled with lower loan impairment allowances. Supported by strong organic growth in loans and core customer deposits, the Group's net interest and finance income increased by RM638 million or 14% in 2010 as compared to 2009.

Non-interest income of the Public Bank Group which recorded a commendable growth of 19% as compared to 2009, was supported by higher fee income generated by the Group's unit trust and foreign exchange businesses.

On a quarterly basis, the Public Bank Group continued to surpass the RM1 billion quarterly profit mark by recording a pre-tax profit of RM1.13 billion in the fourth quarter of 2010. This represented a strong growth of 8% as compared to the pre-tax profit of RM1.05 billion in the third quarter of 2010. Similarly, net profit attributable to shareholders for the quarter also grew by 8% as compared to the preceding quarter, to RM846 million.

The Public Bank Group's results translated into improved earnings per share of 87.2 sen and higher net return on equity of 27.1% in 2010 as compared to 26.1% in previous year.

In view of the Public Bank Group's strong performance for the year, the Board of Directors has declared a second interim cash dividend of 25 sen less 25% tax and a single tier dividend of 8 sen. Together with the first interim dividend of 25 sen less 25% taxation, which was paid in August 2010, the total gross dividend for 2010 is 58 sen. The total net dividend paid and payable for 2010 amounts to RM1.59 billion and represents a total payout of 52% of the Group's net profit for the year. The Board of Directors does not propose any final dividend for 2010.

Highlights of the Public Bank Group's Performance in 2010

• Pre-tax profit of the Group increased by 23% to RM4.09 billion as compared to RM3.32 billion in 2009, on the back of a strong 14% growth in net interest and finance income.
• Net profit attributable to shareholders increased by 21% to RM3.05 billion as compared to RM2.52 billion in 2009.
• Net return on equity increased further to 27.1% as compared to 26.1% a year ago.
• Earnings per share of 87.2 sen was 19% higher as compared to 73.3 sen in 2009.
• Cost-to-income ratio improved to 30.7% from 32.6% in 2009, and is significantly lower than the industry's cost-to-income ratio of 48.4%.
• Total assets increased to RM226.3 billion as at the end of December 2010.
• Total loans and advances of the Group grew by 13.8% to reach RM156.5 billion as at the end of December 2010, driven by strong lending growth of 15.6% in the domestic market.
• The Group's core customer deposits grew at a rate of 12.5%, supported by the domestic core customer deposits growth rate of 15.0%.
• The gross impaired loans ratio of the Group as at the end of December 2010 remained low at 1.1% as compared to the industry's gross impaired loans ratio of 3.2% and was an improvement from the gross impaired loans ratio of 1.4% a year ago.
• The Group's loan loss coverage of 143.5% remains 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 10.0% and 13.7% respectively as at the end of December 2010, after the payment of the second interim dividend.

Strong Momentum in Domestic Lending Business

The Public Bank Group sustained its strong loan growth momentum with a 13.8% growth in total loans and advances to reach RM156.5 billion as at the end of December 2010. In particular, domestic loans grew at a stronger rate of 15.6%. This has led to a higher market share of the domestic lending business of 16.2% as at the end of November 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 which accounted for 85% of the Group's total loan portfolio, mainly comprising loans to mid-market commercial enterprises as well as loans for the financing of residential properties and the purchase of passenger vehicles. In particular, the Group's loan portfolio for residential properties financing and passenger vehicles financing each grew at impressive rates of 17.1% and 12.4% respectively in 2010. Public Bank continued to sustain its market leadership in the residential mortgage and passenger vehicles financing businesses in the domestic market, with market shares of 17.4% and 25.1% respectively as at the end of November 2010.

For 2010, the Public Bank Group continued its strong support of the Government's effort to promote small- and medium-sized enterprise ("SME") activities particularly for working capital and investment financing. Total loan approvals of RM10.8 billion to domestic SMEs accounted for a sizeable 21% of the Group's total domestic loans approved of RM51.0 billion during the year.

Sustained Strong Asset Quality

The Public Bank Group's asset quality remained strong as at the end of 2010. 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. Despite the more stringent criteria on the classification of impaired loans under FRS 139 which was adopted during the year, the Group's impaired loans ratio as at the end of the year remained low at 1.1%, which is approximately one-third that of the banking industry's gross impaired loans ratio of 3.2%. The Group's impaired loans ratio has also improved as compared to the impaired loans ratio of 1.4% as at the end of 2009.

The Public Bank Group's loan loss coverage ratio remains one of the highest at 143.5%, as compared to the banking industry's loan loss coverage ratio of 97.4% notwithstanding that more than 90% of the impaired loans outstanding are secured. The increase in the Group's loan loss coverage was primarily due to additional collective allowance set aside for the strong loan growth, based on the guidelines of Bank Negara Malaysia which require the maintenance of a minimum 1.5% collective allowance.

Growth in Domestic Core Customer Deposits Remains Strong

In line with the Public Bank Group's strategy to build a long-term core customer deposit base, intensified efforts to grow retail deposits continued to contribute positively to the expansion of the Group's core customer deposit base. In particular, domestic core customer deposits grew by 15.0% in 2010, against the backdrop of a 5.9% annualised growth in the domestic industry's core customer deposits for the first eleven months of 2010.

The strong domestic core customer deposit growth of the Public Bank Group is mainly supported by steady inflows of deposits, outperforming the growth of the domestic banking system. Domestic fixed deposits, savings deposits and demand deposits of the Group grew by 16.6%, 8.8% and 14.0% respectively, significantly above the industry's annualised growth rates of 5.5%, 0.4% and 10.4% respectively for the first eleven months of 2010.

With the strong core customer deposits growth in tandem with the high loan growth rate, the Public Bank Group's liquidity position remained healthy with net loan to deposit ratio standing at 87.1% as at the end of 2010.

Improved Earnings of the Group's Overseas Operations

In 2010, the Public Bank Group's overseas operations recorded a 30% improvement in earnings, due mainly to the decline in loan impairment allowances and overall improved business sentiments in the region. In particular, the Hong Kong operations of the Group achieved a marked improvement of 75% growth in pre-tax profit for the year, and contributed to over 5% of the overall Group's profit. Cambodian Public Bank Plc, a wholly-owned subsidiary of Public Bank, recorded a marginal profit improvement and a strong customer deposit growth rate of over 29% for the year.

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. Cambodian Public Bank Plc is one of the largest banks in Cambodia by balance sheet size and presently has a total of 21 branches.

Expansion in Non-interest Income

The Public Bank Group recorded a 19% growth in non-interest income in 2010, mainly attributed to its unit trust and its foreign exchange businesses. Driven by its fee-based revenue strategies which carry a low or zero capital cost, the Group continued to develop its fee-based income from unit trust, bancassurance and wealth management products to further enhance the Group's profitability, return on equity and capital structure.

Public Mutual Berhad ("Public Mutual"), the Public Bank Group's wholly-owned unit trust fund management subsidiary, maintained its market leadership position in the private unit trust industry with an overall market share of 43%. Public Mutual's market share in equity funds and Islamic funds grew to 59% and 60% respectively as at the end of 2010, from 57% and 56% respectively at the end of 2009. Public Mutual currently manages a total of 84 funds with 12 new unit trust funds launched during the year, with a total of nearly 100 billion units in circulation. Net assets under management of Public Mutual rose to RM40.6 billion as at 31 December 2010, 14% higher as compared to RM35.6 billion a year ago. Leveraging on the Group's large unit trust consultants force and distribution capacity through the branches of Public Bank, the Group aims to expand its unit trust customer base further, which currently exceeds 2.39 million accounts. On the strength of these strong fundamentals, Public Mutual's pre-tax profit for 2010 grew by 25% to RM274 million from RM219 million in 2009.

In the third year of its strategic alliance with the ING Group on bancassurance distribution, the Public Bank Group will continue its efforts to further build its bancassurance sales force and infrastructure to drive the expansion of the Group's bancassurance business in the long-term. In 2010, the Group achieved a significant 72% increase in the sales of bancassurance products as compared to 2009, as measured by annualised premium equivalent achieved.

As part of the bancassurance initiative, the Public Bank Group and ING Management Holdings (Malaysia) Sdn Bhd ("ING") had jointly applied to Bank Negara Malaysia for a family takaful licence, which approval was obtained on 1 September 2010. The family takaful operations will be undertaken through a new joint venture company in which ING and the Public Bank Group will hold 60% and 40% equity interest respectively. The joint venture for the family takaful business will provide the Group with a further avenue to expand its fee-based revenue when the operations of the joint venture commence by the first half of 2011.

Capital Position Remains Healthy

The Public Bank Group proactively manages its capital position to ensure a healthy level of capital whilst delivering healthy and sustainable returns to shareholders, by maintaining a disciplined capital and balance sheet management process. In 2010, the Public Bank Group's capital position remains healthy, with its Tier 1 capital ratio and risk-weighted capital ratio standing at 10.0% and 13.7% respectively as at the end of 2010, after deducting the second interim dividend for 2010.

Based on the recent announcement by the Basel Committee on Banking Supervision on bank capital reforms, the Public Bank Group's capital position under the new capital regime is expected to remain supportive of the Group's business growth strategies whilst maximising shareholders' returns. Based on the finalised Basel III requirements, which are to be gradually phased in commencing 1 January 2013, the Group is confident that it is well positioned to meet the revised minimum capital requirements. In the context of the regulatory capital regime reforms, the Group will continue to monitor further developments of the Basel III proposals and address the potential impact on the Group's capital requirements by realigning its capital management strategies from time to time.

Group Prospects

The global economic outlook remains challenging whilst advanced economies continue to experience anemic growth and structural issues of high unemployment, high budget deficits and large sovereign debt burdens. The Malaysian economy is however expected to remain healthy, supported by sustained expansion in domestic demand and recovery in exports. Along with the expectation that the Malaysian economy will grow by 5% to 6% in 2011, the Public Bank Group continues to operate in a healthy domestic operating environment due to favourable employment conditions, a stable financial system, sustained consumer and business sentiment, as well as the accommodative policy environment promoted by Bank Negara Malaysia.

The Public Bank Group's solid performance for 2010 reaffirms the proven business strategies of the Group. Leveraging on the strong PB Brand, the Group will continue to pursue strong organic growth strategies in 2011 in its lending and deposit-taking businesses, accelerate and diversify its fee-based revenue and further enhance its cost efficiency and return on equity. The Group will also continue to reinforce its prudent risk and capital management practices in sustaining its superior asset quality whilst upholding its strong corporate governance culture and practices. The Group is continuously seeking avenues to further improve its customer service delivery infrastructure and fulfill the Group's high customer experience expectations.

Barring unforeseen circumstances, the Public Bank Group is expected to maintain its earnings momentum and continue to record satisfactory performance in 2011.

Tan Sri Dato’ Sri Dr. Teh Hong Piow
Chairman

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Y.Bhg. Tan Sri Dato' Sri Dr. Teh Hong Piow
Chairman of Public Bank
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In conjunction with the forthcoming Chinese New Year Celebration, Public Bank is pleased to announce the launch of the ‘PB Investment Prosperity’ Campaign. The campaign offers 2 investment plans specially packaged to suit customers’ current financial and protection needs while rewarding them with limited edition 24K gold-plated gifts of good fortune. The campaign will run from 18 January 2011 onwards.

“At Public Bank, we offer a wide range of investment products to meet customers’ investment and protection needs and assist customers to achieve their financial goals. We believe that financial planning is absolutely vital for everyone. Whether customers are preparing funds for their children’s education or planning for their retirement needs, we have a variety of investment and insurance products to suit customers’ needs,” said Dato’ Chang Kat Kiam, Chief Operating Officer, Public Bank Berhad.

“To live up to our customers’ trust in the PB Brand, we are committed to help customers stretch their Ringgit with financial planning. To reciprocate our valued customers’ support, we are pleased to reward them with the specially designed, limited edition 24K gold-plated gifts for investing in the Bank’s products”, he added.

The ‘PB Investment Prosperity’ Campaign is open to all new and existing Public Bank customers aged 18 years old and above. Customers just have to sign up for one of the 2 investment plans to be entitled to a guaranteed 24K gold-plated gift. ‘Plan A’, unit trust bundled with bancassurance products, is specially designed for investors who wish to invest and at the same time provide the financial protection for their families. On the other hand, ‘Plan B’, unit trust bundled with foreign currency fixed deposit, is suitable for those seeking to diversify their investments.

The guaranteed gifts given away in this campaign consist of a series of 3 exquisite limited edition 24K gold-plated gifts namely the ‘Prosperity Fish’, ‘Prosperity Bowl’ and ‘Prosperity Peach’. These gifts are carefully selected where each gift represents a magnificent piece of gold craft that symbolizes good luck and prosperity. The gifts are limited and available while stocks last.

In addition, customers who purchase any One Solution Plan bancassurance products during the campaign period are also entitled to a special monthly contest. A total of 100 OSIM uSnooz Massage Wraps are up for grabs each month during the 4 months campaign period.

To find out more about the ‘PB Investment Prosperity’ Campaign, customers are invited to visit their nearest Public Bank branch, call free phone at 1-800-22-9999 during working hours or log on to Public Bank’s website at www.pbebank.com. Specific terms and conditions will apply.

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CampuBank Securities has obtained a securities company licence from the Securities and Exchange Commission of Cambodia, which will enable it to carry out securities underwriting business, securities dealing business, securities brokerage business and investment advisory business in Cambodia.

The issued and paid-up capital of CampuBank Securities is 40,000,000,000 Khmer Riels (equivalent to approximately RM31.1 million).

CampuBank Securities was established to support and participate in the Cambodian Government’s initiatives to develop a capital market, thus enhancing the PBB Group’s role in the financial services industry in Cambodia.

With its licence, CampuBank Securities will be able to provide share broking and corporate finance related services, and this will increase the suite of products available to the customers of Campu Bank.

Campu Bank, which carries out commercial banking business in Cambodia since May 1992, currently has 20 branches strategically located in the country.

When the financial services industry further developed with the opening of the general insurance sector, Campu Bank had in July 2007 established a 55% owned subsidiary, namely CampuBank Lonpac Insurance Plc, thus becoming an early player in this sector.

The establishment of CampuBank Securities will not have any effect on the earnings and net assets of the PBB Group for the financial year ending 31 December 2010. CampuBank Securities is expected to contribute positively to the earnings of PBB Group in the future.

All the requisite approvals have been received from the following regulatory authorities for the establishment of CampuBank Securities:

None of the Directors and/or major shareholders of PBB or persons connected to them has any interest, direct and indirect, in the establishment of CampuBank Securities.

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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

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

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

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

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Y.Bhg. Tan Sri Dato Sri Dr. Teh Hong Piow
Chairman of Public Bank
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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.

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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.
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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.

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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
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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.

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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.

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