For Immediate Release

20 April 2017

PUBLIC BANK GROUP ACHIEVED PRE-TAX PROFIT OF RM1.63 BILLION FOR THE FIRST QUARTER OF 2017
 
Chairman’s Review

The Public Bank Group today announced a pre-tax profit of RM1.63 billion for the first quarter of 2017 on the back of a stable gross revenue of RM5.03 billion achieved during the quarter. Net profit attributable to shareholders grew by 1.5% to RM1.25 billion for the first quarter of 2017, as compared to RM1.23 billion achieved in the previous corresponding quarter.
 
The Founder and Chairman of Public Bank, Tan Sri Dato’ Sri Dr. Teh Hong Piow said that, “The Public Bank Group has placed itself for a positive start in 2017, as the Group has continued to achieve stable profitability even in times of persistent headwinds facing the banking environment. The Group’s profitability continued to be driven by its core retail banking business underpinned by healthy growth in loans and deposits during the quarter, coupled with its sustained strong asset quality.”
 
Tan Sri Teh added that, “The Public Bank Group continued to sustain a satisfactory set of financial performance indicators as reflected in its net return on equity of 14.9%, gross impaired loans ratio of 0.5% and an efficient cost-to-income ratio of 34.3%.”

Sustaining Growth in Loans and Deposits
 
In the first quarter of 2017, total gross loans of the Public Bank Group increased at an annualised rate of 3.6%, with domestic loans growing faster at an annualised rate of 4.7%. The Group’s growing loans portfolio focusing on the financing of residential properties and commercial lending to small and medium enterprises, continued to capture major market share in the domestic lending market.
 
In the deposit-taking business, the Group achieved an annualised 8.1% growth in total customer deposits for the first quarter of 2017, underpinning a stable base for the Group’s funding position. On the domestic front, the Group’s total deposits grew at an annualised rate of 7.9%.
 
Tan Sri Teh commented that, “As the Public Bank Group’s loan base expands, the Group places great emphasis on maintaining a healthy funding structure to support its loan business. The Group’s healthy deposit growth has continued to form a stable funding base for the Group in managing its liquidity needs.”
 
Contribution from Non-interest Income
 
The Public Bank Group’s unit trust income remained one of the main contributors to the Group’s non-interest revenue. Through the Group’s wholly-owned subsidiary, Public Mutual Berhad, the Group’s unit trust business has continued to contribute positively to its financial performance.
 
Tan Sri Teh said, “The Group’s unit trust business through Public Mutual recorded a double-digit growth of 11.1% in pre-tax profit for the first quarter of 2017, as compared to the previous corresponding period. Public Mutual also continued to maintain its strong market position, capturing 45.8% retail market share of the private unit trust industry. As at the end of March 2017, Public Mutual has 135 unit trust funds under its management with a total net asset value of RM74.4 billion.”
 
The Public Bank Group’s non-interest income also continued to be driven by its foreign exchange business and transactional fee income from its banking operations. Tan Sri Teh reiterated, “The Group will continue to reinforce its efforts to drive non-interest revenue as a key strategy to generate higher income in sustaining the Group’s  return on equity.”
 
Prudent Cost Management
 
The Public Bank Group’s cost-to-income ratio increased from 32.3% in 2016 to 34.3% in the first quarter of 2017, but still remained efficient as compared to the banking industry’s cost-to-income ratio of 45.8%.
 
Tan Sri Teh highlighted that, “As rising prices linger in the business environment, the banking sector is not immune from the impact of it. Further, banks are faced with increasing cost of compliance for the enhancement of banking stability. While the Public Bank Group’s cost-to-income ratio has increased, it has remained the lowest in the domestic banking industry, reflecting the Group’s prudent cost management while pursuing continued business growth."

Tan Sri Teh further added, “High productivity and cost efficiency will remain a top agenda of the Public Bank Group in sustaining the Group’s competitiveness moving forward.”
 
Upholding Strong Asset Quality
 
The Public Bank Group continued to uphold its strong asset quality, with its gross impaired loans ratio remaining low at 0.5% as at the end of March 2017, as compared to the Malaysian banking industry’s gross impaired loans ratio of 1.6%.
 
Tan Sri Teh said, “The Public Bank Group is strongly committed to strict and prudent credit risk management. Resilient asset quality has remained a quality attribute of the Group in challenging times.”
 
Further, the Public Bank Group’s strong asset quality was complemented by its healthy loan loss coverage ratio of 104.0% as at the end of March 2017, higher than the banking industry’s coverage ratio of 90.8%.
 
Overseas Operations
 
For the first quarter of 2017, the Public Bank Group’s overseas operations contributed 10% of the Group’s overall pre-tax profit. Public Financial Holdings Limited Group in Hong Kong and Cambodian Public Bank Plc are the main contributors to the Group’s overseas business profits.
 
The Public Bank Group has also recorded commendable growth in its Vietnam’s operation, through its wholly-owned subsidiary, Public Bank Vietnam Limited (PBVN). Tan Sri Teh added, “The acquisition of the remaining equity interest in PBVN in 2016 has resulted in very encouraging performance. The Group will continue to undertake expansion exercise in Vietnam, with targeted opening of six new branches in 2017.”
 
“The Public Bank Group continues to see huge growth potential in Indochina. Expansion through the opening of branches, and enhancement of products and services remain on the agenda in strengthening Public Bank’s presence in Cambodia, Vietnam and Laos.” Tan Sri Teh added.
 
Healthy Capital Position
 
The Public Bank Group’s capital position remained stable, with its common equity Tier 1 capital ratio, Tier 1 capital ratio and total capital ratio standing at 11.4%, 12.2% and 15.2% respectively as at the end of March 2017.
 
Tan Sri Teh emphasised that, “Ensuring a stable and healthy capital position has continued to be the impetus for the Public Bank Group to grow further. The Group’s proactive capital management is a key competency in support of its growth strategies while ensuring the fulfillment of regulatory requirement.”
 
Group’s Prospect
 
“The prospect of the domestic banking industry will continue to hinge largely on the operating environment condition. For 2017, the ongoing expansion of the Malaysian economy anchored by sustained domestic demand is expected to remain conducive to banking business growth.” Tan Sri Teh said.
 
“However, the various headwinds facing the economy will continue to place downside pressure to banks’ operation. While the Public Bank Group is confident that its strong market position and PB Brand will continue to drive business growth, the Group will remain agile and responsive to various challenges and opportunities. The Group will continue to take proactive efforts to ensure it remains on the trajectory towards meeting its 2017 growth targets.” concluded Tan Sri Teh.

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

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For Immediate Release

30 March 2017

Tan Sri Teh Hong Piow Accorded The Asian Corporate Director Recognition Award For The 7th Time
 
The Founder and Chairman of Public Bank, Tan Sri Dato’ Sri Dr. Teh Hong Piow has been awarded for the 7th consecutive time, the ‘Asian Corporate Director Recognition Award’ by Corporate Governance Asia on 30 March 2017 at Menara Public Bank, Kuala Lumpur.
 
The award was presented to Tan Sri Teh by Mr. Aldrin Monsod, Founder, Managing Director and Publisher of Corporate Governance Asia and witnessed by Tan Sri Dato’ Sri Tay Ah Lek, Managing Director of Public Bank and Dato’ Chang Kat Kiam, Deputy CEO of Public Bank. At the same event, Mr. Aldrin Monsod also presented the ‘Icon on Corporate Governance Award’ to Public Bank for the 12^th consecutive year from 2005 to 2016. 
 
With this award, Tan Sri Teh has received a total of 49 personal to holder awards in recognition of his exemplary commitment to excellence and lifetime dedication to the banking industry in the Asian Region while the Bank has garnered more than 400 awards over the years.
 
In his citation during the award presentation, Mr. Aldrin Monsod said, “Public Bank’s unflagging commitment to prudent management and performance excellence has enabled the Bank to gain various international recognitions, including the highest awards on corporate governance. Amid any prevalent business cycle, it conducts its business with integrity, enhancing a business model that is focused on delivering value creation over the long-term for customers, employees, shareholders, the community where it operates and the environment”.

“For all its achievements, Tan Sri Dato’ Sri Dr. Teh Hong Piow implemented the best banking practices in Public Bank and in many ways, he is Public Bank himself. After all, he sets it up and created the brand that resonates in the banking industry, as a Bank of exemplary excellence and the Bank of preferred choice”.
 
“Tan Sri Dato’ Sri Dr. Teh Hong Piow has been an inspiration to many banks in Asia. Many of the banks are emulating the way Public Bank manages its business. The culture which Tan Sri has imbued among the staff has set it apart. Many are inspired by Tan Sri Teh’s astute leadership, strong commitment to excellence and his benevolence of giving and sharing. I personally have encountered the first-class counter service at Public Bank’s branches and the unique experience was like being taken care of by a caring family member”, said Mr. Aldrin Monsod.
 
Tan Sri Teh in his acknowledgement said, “It is indeed an honour to be bestowed with these two awards for several years from the Corporate Governance Asia which is an esteemed institution renowned for its strong reputation worldwide. I would also like to dedicate these awards to our customers, employees and shareholders who have loyally supported our Bank over the years which has allowed us to maintain exceptional corporate governance standards”.

 Tan Sri Dato’ Sri Dr. Teh Hong Piow receiving the awards from Mr. Aldrin Monsod. On his right are Tan Sri Dato’ Sri Tay Ah Lek and Dato’ Chang Kat Kiam

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For Immediate Release

27 March 2017

Public Bank’s 51^st Annual General Meeting Held On 27 March 2017
 
In conjunction with Public Bank’s 51^st Annual General Meeting held on 27 March 2017, the Founder and Chairman of Public Bank, Tan Sri Dato’ Sri Dr. Teh Hong Piow is pleased to present a review of the Public Bank Group’s performance in 2016.
 
Performance Review
 
Tan Sri Teh said, “In 2016, the Public Bank Group celebrated its 50^th year of operations in Malaysia. Although the operating environment was challenging, the Group kept its earnings steady and achieved another profit milestone with pre-tax profit of RM6.55 billion in 2016 as compared to RM6.49 billion in 2015. Net profit attributable to shareholders grew by 2.9% to RM5.21 billion in 2016, whilst earnings per share increased by 2.8% to 134.8 sen in 2016.”
 
Tan Sri Teh added, “The Public Bank Group remained top amongst its banking peers in Malaysia with the highest net return on equity of 16.5% and lowest cost to income ratio and gross impaired loans ratio of 32.3% and 0.5% respectively.”
 
Tan Sri Teh highlighted that, “Despite a tougher operating environment in 2016, the Public Bank Group’s loans and deposits increased by 7.5% and 2.9% respectively, higher than the industry’s loans and deposits growth of 5.3% and 1.5% respectively. As a result, market shares of loans and deposits in the domestic market have further improved.”
 
Tan Sri Teh added, “In view of the Group’s favourable performance in 2016, a second interim dividend of 32 sen was paid on 28 February 2017. Together with the first interim dividend of 26 sen paid in August 2016, the shareholders would have received a total dividend of 58 sen per share for 2016.” The total dividends paid for 2016 was RM2.24 billion, representing a payout of 43.0% of the Group’s net profit for 2016.
 
Above-industry Growth in Loans and Customer Deposits
 
The Public Bank Group’s lending activities to the retail banking segment remained its key strategic focus, driven by the extension of credit mainly for the purchase of residential properties and passenger vehicles as well as commercial lending to small and medium enterprises. Collectively, this formed 85% of the Group’s total loans and financing as at the end of 2016.
 
Tan Sri Teh further added, “As a result of above industry loans growth, the Group’s domestic loans market share continued to improve, from 17.4% as at the end of 2015 to 17.7% as at the end of 2016. The Group retained its top position in the domestic financing for purchases of residential properties, commercial properties and passenger vehicles, with market shares of 19.4%, 34.7% and 29.6% respectively as at the end of 2016.
 
On the funding side, the Group continued to achieve above industry customer deposits growth amid challenges encountered in the deposits market. This led to a further increase in the domestic market share of customer deposits to 16.7% as at the end of 2016, from 16.6% a year ago.”
 
Superior Asset Quality
 
Tan Sri Teh said, “The Public Bank Group’s asset quality remains the best amongst Malaysian banking groups. Gross impaired loans ratio remained low at 0.5% in 2016 and was well below the banking industry’s gross impaired loans ratio of 1.6%.”
The Group's loan loss coverage ratio stood at 102.7% as at the end of 2016 which was higher and more prudent than the Malaysian banking industry’s ratio of 90.2%. The Group’s loan loss coverage was significantly higher at 248.5% with the inclusion of regulatory reserves.

International Operations
 
In 2016, the Public Bank Group further expanded its operations in Vietnam with the transformation of VID Public Bank from a joint venture bank to a 100% foreign-owned bank in Vietnam. The acquisition of the remaining 50% equity interest in VID Public Bank was completed and VID Public Bank was renamed as Public Bank Vietnam Limited on 1 April 2016.
The Group’s overseas operations recorded a 8.5% growth in pre-tax profit from RM572.2 million in 2015 to RM620.7 million in 2016, contributing 9.5% to the Group’s pre-tax profit in 2016.
 
Steady Net Income Growth
 
In 2016, the Group’s total net income increased by 4.3% to RM9.96 billion, supported by continued growth in net interest income as well as fee and commission income. Besides sustaining a healthy loans growth and resilient deposits structure which contributed to the Group’s net interest income growth, the Group has continued to emphasise on growing its fee-based revenue.
 
Tan Sri Teh said, “In 2016, the Group’s unit trust management business and transactional banking fee income remained positive, contributing two-thirds of the Group’s total non-interest income. Public Mutual, the Group’s wholly-owned unit trust management company, recorded a pre-tax profit growth of 5.9% in 2016 and remained the market leader in the private unit trust industry with a retail market share of 46.8%. Public Mutual’s total assets under management stood at RM70 billion with 133 funds under its management.”
 
Stable Capital Position

The Public Bank Group’s capital position remained stable with its common equity Tier I capital ratio, Tier I capital ratio and total capital ratio standing at 11.4%, 12.2% and 15.5% respectively as at the end of 2016, after deducting second interim dividend.
Tan Sri Teh commented that, “The Group will continue to be proactive in maintaining a healthy level of capital at all times to support the Group’s business growth strategies whilst maximising its shareholders’ return.”

Superior Returns to Shareholders
 
The Public Bank Group’s ability to deliver consistent and excellent returns to its shareholders, even during challenging times, clearly demonstrates the defensive quality of the investment made in Public Bank.
Tan Sri Teh highlighted, “If a shareholder of Public Bank had bought 1,000 shares in Public Bank when it was listed in 1967, and assuming the shareholder had subscribed for all rights issues to date and had not sold any of the Public Bank shares, he would have 148,938 Public Bank shares worth RM2.94 million as at      31 December 2016. In addition, he would have received total gross dividends of  RM1.16 million. This translates into a total value of RM4.10 million, representing a remarkable compounded annual rate of return of 19.0% for each of the 49 years since 1967.”

Recognition of Banking Excellence
 
Tan Sri Teh commented that, “The Public Bank Group continued to garner international and national awards in recognition of its banking excellence.” Some of the notable awards received include:

• Best Domestic Bank in Malaysia 2016 by FinanceAsia
• 50 Years of Asian Banking Excellence Award by FinanceAsia
• Best Bank in Malaysia 2016 by Alpha Southeast Asia
• Best Bank in Malaysia 2016 by Euromoney
• Best Retail Bank in Malaysia 2016 by The Asian Banker
• Strongest Bank by Balance Sheet in Malaysia 2016 by The Asian Banker
• Best Domestic Bank in Malaysia 2016 by Asiamoney
• Best Domestic Bank in Malaysia 2016 by The Asset
• Domestic Retail Bank of the Year - Malaysia 2016 by Asian Banking & Finance
• Bank of the Year in Malaysia 2016 by The Banker
• Malaysia Automotive Finance Company of the Year 2016 by Frost & Sullivan
• The BrandLaureate Best Choice Brand Award in Leadership in Banking 2015-2016 by Asia Pacific Brands Foundation
• The BrandLaureate Industry Champion Brand Icon Leadership Award for Banking 2016 by Asia Pacific Brands Foundation
• The Asset Platinum Award 2016 for Excellence in Governance, CSR and Investor Relations by The Asset
• Corporate Governance Asia Recognition Award 2016 for Malaysia (Icon on Corporate Governance) by Corporate Governance Asia
• The Edge Billion Ringgit Club Corporate Awards 2016: Highest Growth in Profit Before Tax Over Three Years Award for Super Big Cap Companies – Companies With More Than RM40 billion Market Capitalisation by The Edge Billion Ringgit Club  

Outlook
 
On the strategic directions and outlook for the Public Bank Group, Tan Sri Teh commented that, “Notwithstanding the tougher operating environment ahead, the Group will continue to focus on expanding its businesses organically by sustaining its presence and positions in the domestic retail segment.
 
As the Group moves beyond its 50^th year, we are confident of continued profitability to sustain the Group’s position as a premier bank of excellence.”

Shareholders at the Bank's 51st Annual General Meeting

Y. Bhg. Tan Sri Dato' Sri Dr. Teh Hong Piow giving his welcoming address

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For Immediate Release

21 March 2017

Public Bank Launches the PB Quantum Visa and PB Quantum Mastercard Credit Cards

Public Bank Berhad has on 21 March launched the PB Quantum Visa and PB Quantum Mastercard Credit Card, offering the market exclusive privileges that compliment lifestyle of today’s Malaysian discerning consumers.
 
The PB Quantum Visa and PB Quantum Mastercard Credit Cards are targeting mass market segment with a minimum annual income of RM36,000. To cater to consumers’ lifestyle, the cards offer 5% cash back on online, dining, entertainment and departmental stores transactions. On top of cash back, cardmembers will also earn up to 2x VIP Points for other retail purchases. As a value-added benefit, cardmembers are able to convert any retail purchase of more than RM1,200 in a single receipt to 12 months FlexiPay Plan at 0% interest rate. This FlexiPay Plan is introduced exclusively for PB Quantum Visa and PB Quantum Mastercard Credit Cards.
 
As part of the launch celebration, complimentary JBL GO speaker will be given away to Cardmembers with minimum accumulative retail spend of RM100. To further complement urban lifestyle of the cards’ target segment, Public Bank Berhad will be offering special 1-for-1 Deals at major dining outlets in Malaysia namely Sakae Sushi, Domino’s, Espressolab and Komugi.
 
Present at the launch of PB Quantum Visa and PB Quantum Mastercard Credit Cards in Kuala Lumpur were Tan Sri Dato’ Sri Tay Ah Lek, Managing Director of Public Bank Berhad and Dato’ Chang Kat Kiam, Deputy Chief Executive Officer of Public Bank Berhad, together with Mr. Ng Kong Boon (KB Ng), Visa Country Manager for Malaysia and Mr. Perry Ong, Country Manager, Malaysia and Brunei, Mastercard.
 
Commenting at the launch, Tan Sri Dato’ Sri Tay said, “The PB Quantum Visa and PB Quantum Mastercard Credit Cards are the latest product introduced by the Bank as part of our initiative to offer cards that cater to the lifestyle of younger generation. This product is also well-suited for customers with fast-paced lifestyle with preference for online shopping, dining and entertainment.”
 
“We congratulate Public Bank on the launch of its new PB Quantum Visa Credit Card. This card is enabled with Visa payWave contactless payment technology to provide Malaysian consumers with a faster and more convenient way to pay for everyday purchases. In Malaysia, we have seen Visa payWave transactions exceeding two million as of February 2017 and month-on-month double-digit growth. We are confident that this will help displace more cash in the market, in line with Bank Negara Malaysia’s goal of reducing cash in the market,” said KB Ng, Visa Country Manager for Malaysia.
 
“The launch of the PB Quantum Mastercard Credit Card is an extension of our continued collaboration with Public Bank to offer consumers an innovative digital payment solution, with rewards and benefits, designed to meet their lifestyle demands. We know that consumers today also prioritize safety and convenience in their commerce experience. The card’s contactless feature allows consumers to make purchases seamlessly to enjoy a frictionless payment experience. This initiative is important to support the growing acceptance and usage of contactless payments in Malaysia,” said Perry Ong, Country Manager, Malaysia and Brunei, Mastercard.
 
To find out more about this Card, customers are invited to visit customer service representatives at any of our branches, log on to Public Bank’s website at www.pbebank.com or call PB Customer Service at 03-2176 8333. Terms and conditions apply.

From left Mr. Ng Kong Boon (KB Ng), Visa Country Manager for Malaysia, Tan Sri Dato’ Sri Tay Ah Lek, Managing Director of Public Bank Berhad, Dato’ Chang Kat Kiam, Deputy Chief Executive Officer of Public Bank Berhad and Mr. Perry Ong, Country Manager, Malaysia and Brunei, Mastercard at the launch of PB Quantum Visa and PB Quantum Mastercard Credit Cards in Menara Public Bank, Kuala Lumpur.

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For Immediate Release

14 March 2017

Tan Sri Teh Hong Piow Awarded The Medal For The Development Of  Vietnam Banking Industry

The Founder and Chairman of Public Bank, Tan Sri Dato’ Sri Dr. Teh Hong Piow has been awarded the “Medal for the Development of Vietnam Banking Industry” on 11 March 2017, the first foreign Banker in Vietnam to be awarded this medal.
 
This award was another feather in Tan Sri Teh’s long list of lifetime accolades and recognition and with this award Tan Sri Teh has received a total of 47 personal to holder awards in recognition of his exemplary commitment to excellence and lifetime dedication to the banking industry in the Asian Region.
 
Tan Sri Dato’ Sri Tay Ah Lek, Managing Director of Public Bank during his congratulatory speech for Tan Sri Teh said, “This esteemed award, presented by the Governor of the State Bank of Vietnam symbolizes the deep appreciation and sound recognition for Tan Sri Dato’ Sri Dr. Teh Hong Piow’s manifold contribution to the construction and development of Vietnam’s banking industry.  Tan Sri Teh has certainly achieved a high accolade in society.  Being bestowed with such a prestigious award is truly befitting as the man whose consistent track record attests to his total commitment towards excellence.  As a leader whose leadership is practiced not so much in words as in action, Tan Sri Teh truly inspires us to follow his footsteps towards extraordinary achievements.”
 
“It is a proud moment for all of us in Public Bank as we get to share in Tan Sri Chairman’s joy of receiving this recognition.  While such awards are personal triumphs for Tan Sri Chairman, we as members of his corporate family, cannot help but feel an equal sense of achievement and pride,” added Tan Sri Tay.
 
The prestigious award comes with a medal and certificate personally signed by the Governor of the State Bank of Vietnam, H.E. Le Minh Hung was presented at the ceremony that was held at the Mines International & Convention Centre.
 
Public Bank Vietnam (PBVN), formerly known as VID Public Bank was one of the first joint-venture banks in Vietnam that was established on 30 September 1991 with equal stake joint-venture between the Bank for Investment and Development of Vietnam (BIDV) and Public Bank Berhad (PBB) of Malaysia.  The Bank commenced its operations in May 1992 in its first branch in Hanoi providing a convenient platform for the Malaysian business community to conduct business operations in Vietnam.  Today the Bank has successfully expanded its network to all the major cities in the country with a total of seven branches focusing on retail banking business to serve a wider reach and spectrum of customers in Vietnam and remains one of the most profitable, reputable and prudent banks in the country. 
 
“I am truly honoured to be bestowed with this medal.  Since its inception in 1992, Public Bank Vietnam than known as VID Public Bank and being one of the first joint-venture banks in Vietnam has indeed journeyed a long way parallel with the development of the country.  A year ago we created another significant milestone in Public Bank Vietnam’s 24 years banking journey when Public Bank was granted the 100% foreign-owned bank license.  For this I wish to record our gratitude to the State Bank of Vietnam and the people of Vietnam for their trust in us to be a partner in the nation’s development and progress especially in the banking industry.  I would also like to dedicate this award to our customers, shareholders and business associates,” said Tan Sri Teh in his acknowledgement.

(From left to right) : Mr. Chee Keng Eng, General Director of Public Bank Vietnam, Tan Sri Dato’ Sri Tay Ah Lek, Managing Director of Public Bank, Tan Sri Dato’ Sri Dr. Teh Hong Piow, Founder and Chairman of Public Bank and Mr. Phan Ying Tong, Regional Head of Indo-China Operations of Public Bank at the award presentation ceremony

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For Immediate Release

2 February 2017

Chairman’s Review

The Public Bank Group accomplished another profit milestone following the favourable set of financial results recorded in 2016. The Group registered a pre-tax profit of RM6.55 billion as compared to RM6.49 billion achieved in previous year. Net profit attributable to shareholders grew by 2.9% to RM5.21 billion during the year.
 
The Founder and Chairman of Public Bank, Tan Sri Dato’ Sri Dr. Teh Hong Piow said, “In this 50th anniversary of the Public Bank Group’s formation, the Group has demonstrated the ability to generate stable profitability amid the increasing challenging operating environment. This was attributed to the Group’s proactive organic growth strategy with prudent banking practices, which has remained an edge in the current competitive banking landscape.”
 
On the Public Bank Group’s balance sheet growth, gross loans as at the end of 2016 stood at RM294.0 billion, representing a growth of 7.5% as compared to a year ago. Customer deposits grew by 2.9% to reach RM310.0 billion as at the end of 2016.
 
Tan Sri Teh commented that, “With the favourable financial performance, not only did the Public Bank Group continue to preserve its superior track record of 50 years of unbroken profitability since its inception in 1966, it also continued to be at the forefront amongst its domestic banking peers in Malaysia by delivering high net return on equity of 16.5% as well as maintaining low gross impaired loan ratio of 0.5% and efficient cost-to-income ratio of 32.3% in 2016.”
 
In view of the Public Bank Group’s favourable performance in 2016, Tan Sri Teh announced that, “The Board of Directors has declared a second interim dividend of 32 sen, taking full year dividend for 2016 to 58 sen.” The total dividend paid and payable for 2016 amounted to RM2.24 billion and represents a total payout of 43.0% of the Group’s net profit for 2016.
 
Above-Industry Loan and Deposit Growth

Tan Sri Teh highlighted that, “Despite the intense competition amongst banks for market share, the Public Bank Group continued to achieve above industry loan performance. The Group recorded total loan growth of 7.5%, with its domestic loan growth standing at 7.2% compared to the domestic banking industry’s loan growth of 5.3%, leading to an increased market share of 17.7% in the domestic lending market.”
 
Lending to the retail banking segment remained the key strategic focus of the Public Bank Group, with consumer financing for the purchase of residential properties and passenger vehicles, and extension of credit to small and medium enterprises (“SME”). As at the end of 2016, the Group’s retail and SME loan portfolio collectively accounted for 85% of its total loans.
 
On deposit-taking, the Public Bank Group continued to achieve above industry deposit growth amid challenges encountered in the deposit market. During the year, the Group’s total customer deposits grew by 2.9% compared to the domestic banking industry’s deposit growth of 1.5%.
 
Steady Net Income Growth

The Public Bank Group has demonstrated the ability to generate steady net income growth despite challenges in the operating environment. In 2016, total net income of the Group grew by 4.3% to RM9.96 billion, supported by continued growth in the net interest income and fee and commission income.

Tan Sri Teh emphasised that, “Besides sustaining a healthy loan growth and resilient deposit structure which contributes to its net interest income growth, the Public Bank Group has continued to place great emphasis in growing its fee-based revenue, leveraging on its strong retail franchise, superior customer service and effective cross selling initiatives. In 2016 the Group’s unit trust management business and transactional banking fee income remained positive, contributing two-thirds of the Group’s total non-interest income.”
 
Public Mutual Berhad (”Public Mutual”), the Public Bank Group’s wholly-owned subsidiary, reported a profit growth of 5.9% for 2016 and remained as the market leader in the private unit trust industry with a retail market share of 46.8%. As at the end of 2016, Public Mutual has 133 funds and a total net asset value of RM70.3 billion under its management.
 
To further drive the Public Bank Group’s unit trust business, Public Mutual will continue to maintain its strong brand and leading market position in the private unit trust industry in Malaysia through the delivery of efficient customer service to its clients as well as by expanding and diversifying its product range to meet investors’ demand.
 
Sustaining Cost Efficiency

As a result of rising costs of doing business as well as the increasingly complexity of the banking business, the Public Bank Group’s cost-to-income ratio has increased from 30.5% in 2015, but still remained efficient at 32.3% in 2016. This is well below the banking industry’s average cost-to-income ratio of 48.8%, sustaining the Group’s position as the most cost-efficient bank in Malaysia.
 
Tan Sri Teh commented, “The Public Bank Group sustained the most efficient level of operating costs relative to its business and revenue growth. Consistently, the Group always strives to enhance productivity while adopting efficient cost measures in all aspects of its operations.”
 
Preserving Asset Quality

Tan Sri Teh highlighted that, “Amid the prevailing economic uncertainties and challenges, the Public Bank Group continued to demonstrate resilience in its asset quality.”
 
As at the end of 2016, the Public Bank Group’s gross impaired loan ratio stood at 0.5%, continued to remain significantly lower than the banking industry’s ratio of 1.6%. The Group’s low impaired loan ratio presents a good indication of the Group’s prudent credit risk management practices.
 
Meanwhile, the impaired loans of the Group was well covered, with loan loss coverage ratio of 102.7% as at the end of 2016, as compared to the banking industry’s coverage ratio of 90.2%. 
 
Overseas Operations

The pre-tax profit of the Public Bank Group’s overseas operations grew by 8.5% from RM572 million in 2015 to RM621 million in 2016, contributing 9.5% to the Group’s overall pre-tax profit for 2016.
 
Public Financial Holdings Limited Group in Hong Kong and Cambodian Public Bank Plc, both subsidiaries of Public Bank, continued to be the main contributors to the Group’s overseas business growth.
 
Tan Sri Teh reiterated that, “The Group remains committed to expand its presence in the region through organic growth strategy and will continue to transfer its best practices from its domestic operations to accelerate business growth in its overseas operations.” 
 
Healthy Capital Position

The Public Bank Group’s capital position remained stable, with its common equity Tier 1 capital ratio, Tier 1 capital ratio and total capital ratio standing at 11.4%, 12.2% and 15.5% respectively as at the end of 2016.
 
Tan Sri Teh commented, “The Group will continue to be proactive in maintaining a healthy level of capital at all times to support the Group’s business growth strategies whilst maximising its shareholders’ return.”
 
Group’s Prospect

The operating conditions will continue to be even more challenging in 2017, with strong economic headwinds stemming from policy uncertainties in the US, the Brexit negotiation, political uncertainties in Europe, moderation in China’s economic growth and volatility in global oil prices. The financial and foreign exchange markets will continue to face volatility. While the Malaysian economy is not expected to be insulated from these headwinds, the Country’s sustained domestic demand and continued accommodative monetary policy are expected to remain supportive of continued expansion of the economy, with GDP expected to grow at a stable 4.0 – 5.0% in 2017.
 
With continued growth in economy, albeit at a moderate pace, coupled with sound banking fundamentals, Tan Sri Teh is positive on the sustainability of earnings of the Public Bank Group in 2017 and commented, “The Group has weathered various headwinds and challenges over the past 50 years of its banking operation. The Group had learned and grown stronger along the way. It has also validated the Group’s time-tested strength, sustaining the trust and confidence of its stakeholders. The Group is confident of continued profitability in 2017 and will strategise around its key focus on the organic growth in retail banking business. Vigilance and agility remain key in the Group’s operation amid the macro uncertainties.”
 
“Stepping into the next half of the century of the Public Bank Group, the Group will continue to strive further to strengthen its position as a premier bank of excellence.”
 

For Immediate Release

11 November 2016

Private Retirement Schemes Online FPX Signing Ceremony Between Public Bank Berhad and Private Pension Administrator Malaysia
 
Public Bank Berhad (PBB) and Private Pension Administrator Malaysia (PPA) had officially signed the Private Retirement Schemes (PRS) Online FPX Service Agreement held at Menara Public Bank, Kuala Lumpur on 11 November 2016.
 
The service agreement was inked by YBhg. Tan Sri Dato’ Sri Tay Ah Lek, Managing Director of PBB, and YBhg. Datuk Zaiton Binti Mohd Hassan, Chairman of PPA.  Also present to witness the event were YBhg. Dato’ Chang Kat Kiam, Deputy Chief Executive Officer of PBB, En. Husaini Hussin, Chief Executive Officer of PPA, YBhg. Datuk Nozirah Binti Bahari and Mr. Ou Shian Waei, the Board of Directors of PPA, Puan Azryta Abdul Aziz, General Manager of Securities Commission as well as the Senior Management of PBB.
 
PPA is the central administrator for the PRS which was established in July 2012.  PPA is a body approved by the Securities Commission Malaysia to oversee and promote the growth of the industry, create general awareness and educating the public on PRS as well as protecting members’ interests.

PRS Online is a new online service offered by PPA, providing PRS Members an easy, convenient and secure way to make additional PRS contributions into their existing PRS funds directly via their smartphones, tablets or computers with a few simple steps.  The PRS Online is built to be mobile friendly and supported by robust e-banking infrastructure through the Financial Process Exchange (FPX) payment gateway, this online infrastructure is developed, operated and maintained by PPA.
 
The Private Retirement Scheme (PRS) is a voluntary long-term contribution scheme introduced in 2012 which is designed to help individuals accumulate savings for retirement.  The scheme is open to all individuals aged 18 and above, including foreigners, be it employed or self-employed as a supplement to their retirement savings.
 
The agreement between these two parties would see PBB acting as the sole facilitator to PRS Members in performing PRS contribution via PRS Online.
 
PBB is committed to support Malaysia’s transformation to e-payments and will continue to launch more new initiatives to promote e-payments.  The Bank has organised extensive nationwide e-Payments Forums to promote the Bank’s comprehensive online cash management and e-banking services to improve the overall efficiency of the payment system.
 
Public Bank offers a suite of online cash management services comprises of Public Bank Electronic Credit Payment, Direct Debit, Bill Payment, Payment Agent, JomPAY Service as well as collection service via self-service terminals.

(From left) Public Bank’s Deputy Chief Executive Officer, YBhg. Dato’ Chang Kat Kiam, Managing Director, YBhg. Tan Sri Dato' Sri Tay Ah Lek, PPA's Chairman, YBhg. Datuk Zaiton Binti Mohd Hassan and Chief Executive Officer, En. Husaini bin Hussin at the Private Retirement Scheme Online signing ceremony in Menara  Public Bank, Kuala Lumpur.

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