Net Profit Of RM5.66 Billion And Second Interim Dividend Of 7.7 Sen For 2021
The improved profit growth in 2021 was also attributed to the low base effect in 2020; however, the operating environment remained extremely challenging due to the prolonged COVID-19 pandemic and the emergence of new variants.
Tan Sri Dato’ Sri Dr. Teh Hong Piow, the Founder, Chairman Emeritus, Director and Adviser of Public Bank said “Despite the challenges in 2021, the Public Bank Group was able to steer through the difficult year with sustained balance sheet strength. The Group continued to demonstrate its resilience with net return-on-equity of 12.4% and efficient cost-to-income ratio of 31.6%,”.
The Group has declared a second interim dividend of 7.7 sen per share. The second interim dividend will be paid on 22 March 2022 based on the dividend entitlement date of 14 March 2022. Together with the first interim dividend of 7.5 sen per share, the full year dividend for 2021 amounts to 15.2 sen. This represents a total dividend payout of RM2.95 billion or 52.2% of the Group’s net profit for 2021.
The Group recorded a marginal increase of 1.4% in overhead expenses in 2021. Tan Sri Teh said, “The Public Bank Group continues to pursue its cost optimisation strategy by focusing on optimising discretionary spending, concentrating on developing its talent pool as well as building digital solutions that improve customer experience and operational efficiency.
After navigating a bumpy and uneven recovery in 2021, Malaysia’s economic growth is anticipated to accelerate in 2022. High vaccination coverage and active vaccine booster shot were on rollout will be expected to support consumer and business sentiment amid sizeable fiscal support and accommodative monetary policy.
However, the ability of the vaccines to guard against any new COVID-19 variants remains a concern to the strength of the recovery.
Tan Sri Teh said, “As the economy gradually recovers, the Public Bank Group will continue to focus on further strengthening its business resilience, including preserving asset quality, maintaining cost discipline and upholding high standards of corporate governance.”
Tan Sri Teh concluded, “The Public Bank Group will continue to remain agile and responsive to the changing environment to ensure long term sustainability of its business and to better serve the interest of all its stakeholders.”
Founder, Chairman Emeritus, Director and Adviser of Public Bank
Public Bank Awarded for Supporting SMEs Affected by the Pandemic and Floods
The award was presented to Public Bank by the Prime Minister, Datuk Seri Ismail Sabri Yaakob and witnessed by the Finance Minister, Tengku Datuk Seri Zafrul Tengku Abdul Aziz during the Official Launching of Semarak Niaga 2022 event which was held on 21 February 2022 at the Hilton Sentral.
2021 has been a challenging year for many businesses due to restrictions on movement to contain the COVID-19 pandemic causing disruptions to economic and business activities, coupled with subdued consumer sentiment.
Tan Sri Dato' Sri Dr. Teh Hong Piow, Founder, Chairman Emeritus, Director and Adviser of Public Bank said, “Public Bank and Public Islamic Bank, being a strong supporter of the Government’s National Recovery Plan (NRP) and various stimulus measures to assist businesses has continued to provide Small and Medium Enterprises (SMEs) with working capital for their businesses as well as to assist SMEs who need financial assistance amid the pandemic challenges.”
“Since the COVID-19 pandemic, the Bank has been participating in various SME financing schemes initiated by the Government and Bank Negara Malaysia (BNM) - offering competitive financing rates, flexible financing tenure and various repayment options under these schemes. The Bank had approved more than RM3.4 billion in funding assistance under such special financing schemes as at December 2021, benefitting over 17,700 businesses,” added Tan Sri Teh.
According to Tan Sri Teh, “The Bank has also been actively working together with CGC to provide a wider range of products to SMEs for working capital and / or capital expenditure financing.
Some of the CGC guaranteed financing schemes include BizJamin Scheme and BizJamin Bumi Scheme. CGC also offers guarantee to SMEs affected by the flood under Disaster Relief Facility which was established by BNM. There are also other guarantees offered such as All Economic Sectors Facility, Targeted Relief and Recovery Facility and High Tech Facility – National Investment Aspirations to SMEs affected by the COVID-19 pandemic.”
On 10 November 2021, Public Bank was also awarded with the ‘Top FI Partner Award – imSME Category’ and ‘Top FI Partner Award – Commercial Bank Category’ by CGC at the 26th FI / DFI & SME Awards 2020 for its strong support of CGC.
Public Bank Awarded for Contribution Towards MSMEs Financing
Held on 29 July 2022 at Shangri-La Hotel, Kuala Lumpur the award ceremony was officiated and presented by the Minister of Finance, YB Senator Tengku Datuk Seri Utama Zafrul Bin Tengku Abdul Aziz and was attended by the participating financial institutions, developmental financial institutions and MSMEs.
The FI/DFI & SME Awards acknowledges CGC’s strategic FIs and DFIs partners for their significant role in providing a valuable contribution towards MSME financing and development as well as its MSME customers with excellent credit track records and business successes.
Public Bank to Provide Gamuda Land Special Sustainable Financing Package
With this MoU, Public Bank has created a Special Sustainable Financing Package to promote end-financing for green and sustainable development projects by Gamuda Land.
These residential and commercial projects cover those that have received or projects that will seek sustainability recognition from Green Building Index (GBI), GreenRE and other accreditation bodies.
Public Bank’s Managing Director and Chief Executive Officer, Tan Sri Dato’ Sri Dr. Tay Ah Lek said this MoU symbolises an advancement in Public Bank’s green growth journey.
“Public Bank Group has committed to achieve carbon neutrality by the year 2030 and net-zero by 2050. The Group is also committed to mobilise RM40 billion in ESG-friendly financing by 2025, including the financing of green-certified buildings,” Tan Sri Tay said during the signing ceremony.
The MoU was signed by Tan Sri Dato’ Sri Dr. Tay Ah Lek with Gamuda Land’s Chief Executive Officer, Mr. Ngan Chee Meng, witnessed by Dato’ Chang Kat Kiam, Public Bank’s Deputy Chief Executive Officer and Mr. Chu Wai Lune, Chief Operating Officer of Gamuda Land, in the company of other senior officers of both parties.
The Public Bank Special Sustainable Financing Package to end-finance projects from Gamuda Land will feature favourable pricing, fast lane approval and a financing option for customers to purchase eco-friendly and energy efficient appliances, fixtures and fittings to further enhance the sustainability of their green properties.
"With a strong market share of 20.5% and 34.0% respectively in residential and non-residential properties financing in Malaysia as of March 2022, Public Bank is thus well positioned to play its role in collaboration with Gamuda Land to drive the sustainability agenda of the property sector,” added Tan Sri Tay.
Tan Sri Tay also complimented Gamuda Land for achieving the ‘5 Diamonds’ recognition for its Gamuda Cove township in the ‘Low Carbon City 2030 challenge’ awarded by the Ministry of Environment and Water.
In highlighting the sustainability commitment of Gamuda Land, Mr. Ngan Chee Meng in his speech said that the Gamuda Green Plan (GGP) is a comprehensive framework charting tangible targets driven on environment, social and governance (ESG) dimensions for the next five years and beyond. The plan commits the group with specific steps to reduce direct and indirect greenhouse gas emission intensity by 30% in 2025 and 45% by 2030.
“Moving forward, all of Gamuda Land’s development locally and internationally will be green building certified. As such, it is indeed timely for us to work together with like-minded partners like Public Bank, who believes in pushing the envelope with the green agenda,” said Mr. Ngan.
Mr. Ngan added that Gamuda Land's sustainable developments and Public Bank’s commitment to make green financing more accessible, can together create a greener and brighter tomorrow for future generations.
RM4.02 Billion Pre-Tax Profit For The First Half of 2022 and 8.0 Sen First Interim Dividend Declaration
Net profit attributable to shareholders was lower at RM2.82 billion for the first half year ended June 2022, compared with RM2.91 billion in the corresponding period in 2021 due to the impact of the one-off prosperity tax.
Tan Sri Teh announced that the Board of Directors has declared the first interim dividend of 8.0 sen per share, which resulted in a total dividend payout of RM1.55 billion, representing 55.2% of the Group’s net profit for the half year ended 30 June 2022. The first interim dividend was paid on 23 September 2022 based on the dividend entitlement date of 14 September 2022.
Loans and Deposits Businesses
“Despite the significant economic headwinds and intense competition in the market, the Group continued to sustain its domestic leading position in the residential properties, hire purchase financing and SME financing with market share of 20.5%, 30.5% and 20.5% respectively,” Tan Sri Teh commented.
The Public Bank Group’s liquidity and funding structure remained healthy with gross loan to fund and equity ratio of 81.0% as at 30 June 2022.
Non-Interest Income
The Group’s unit trust business, undertaken by its wholly-owned subsidiary, Public Mutual remains the main contributor to the Group’s non-interest income. Tan Sri Teh highlighted, “In the first half of 2022, Public Mutual recorded a pre-tax profit of RM392.2 million, contributing 9.7% to the Group’s profit. Despite the subdued market sentiment, Public Mutual continued to capture a large retail market share of 35.2%, with a total of 177 unit trust funds and total assets under management of RM92.1 billion.”
Cost Management
On the back of the resumption of more business activities, overhead expenses increased by 4.4% in the first half of 2022. The Group’s prudent cost management continued to sustain its cost-to-income ratio at an efficient level of 33.5%, significantly lower than the domestic banking industry’s cost-to-income ratio of 44.3%.
Tan Sri Teh highlighted, “Whilst the Public Bank Group continues to emphasise on effective cost management, the Group will continue to invest in digital transformation and staff development for long term productivity and cost efficiency.”
Asset Quality
As at the end of June 2022, the Public Bank Group’s gross impaired loans ratio remained low at 0.3%, well below the domestic banking industry’s average impaired loan ratio of 1.7%.
Repayment Assistance Programme
Upon the expiry of PEMULIH repayment assistance programmes, about RM20.8 billion of the Public Bank Group’s domestic loans were still under the Group’s in-house repayment assistance as at the end of July 2022, accounting for 6% of the Group’s total domestic loans. Nevertheless, the Group is mindful of the ongoing challenges in the economy and will continue to provide assistance to customers who continue to face repayment difficulty.
Overseas Operations
The Public Bank Group’s overseas operations contributed 6.5% to the Group’s profit. Public Financial Holdings Limited Group and Cambodian Public Bank continued to be the main contributors.
The Group’s Indochina operations grew at a faster pace, with Campu Bank and Public Bank Vietnam’s profit growing by 7.1% and 14.3% respectively as compared with the corresponding period last year.
Capital and Liquidity Position
As at the end of June 2022, the Group’s common equity Tier 1 capital ratio, Tier 1 capital ratio and total capital ratio stood at a healthy level of 14.1%, 14.2% and 17.2% respectively, while liquidity coverage ratio remained healthy at 113.7%.
Tan Sri Teh reiterated, “Challenges facing the banking industry are intensifying. The Public Bank Group will remain focused on sustaining a healthy capital and liquidity position for its business to continue thriving even in times of challenges.”
Group’s Prospects
The Malaysian economy remains on a recovery path, supported by improving domestic demand and sustained export growth. The transition to endemic phase with almost fully relaxed COVID-19 restrictions have further strengthened the recovery.
However, significant headwinds remain, stemming from global geopolitical conflicts, resurgence of COVID-19 cases, rising inflationary pressure and global supply chain disruptions.
Tan Sri Teh commented, “As the headwinds remain visible, the Public Bank Group will continue to embrace the challenges with focus on prudent cost and risk management. The Group’s strong balance sheet, resilient asset quality and good corporate governance practices would continue to provide support in strengthening the Group’s business with greater cost efficiency and operational productivity.”
“Against this backdrop, the Public Bank Group will continue to remain cautiously optimistic in striving its business growth and ensure its stakeholders’ interests are safeguarded at all times,” Tan Sri Teh concluded.
Founder, Chairman Emeritus, Director and Adviser of Public Bank
Public Bank’s Awards And Recognition
Public Bank’s aspiration to stay ahead of the pack is further boosted when the Bank continues to be honoured with two new awards as at 22 March 2022. The following are the latest awards and recognitions received by the Bank.
- Best Corporate Governance Bank in Malaysia 2022
By Global Banking & Finance
- Best Bank in Malaysia 2021
By The Asset
- Best Bank in Malaysia 2022
By Global Finance
- Trusted Brands Gold Award 2022 under the Bank category
By Reader’s Digest
Public Bank and Carsome Sign MoU for Car Financing Collaboration
The agreement was inked by Public Bank’s Managing Director/Chief Executive Officer, Tan Sri Dato’ Sri Dr. Tay Ah Lek and Carsome’s Co-Founder and Chief Executive Officer, Mr. Eric Cheng.
With this MoU, the Bank will be able to provide stock-finance and end-finance arrangement for the vehicles bidden by its Used Car Dealers (UCD) through Carsome online platform, as well as to extend wholesome financial products/services to Carsome and its members.
Tan Sri Tay Ah Lek said “Public Bank through this collaboration aims to offer comprehensive financial services solution namely PB Current Account, PB Enterprise, Cash Management and Credit Card Merchant Service with preferential terms to Carsome and its member UCDs and to interface and facilitate digitalisation through e-commerce facility for Credit Card Merchant services for the acceptance of Visa/Mastercard”.
“This synergistic tie-up is in line with Bank Negara Malaysia’s initiatives to accelerate the digitalisation of financial services include supporting the overall development of a dynamic fintech ecosystem in Malaysia. Public Bank, through its Hire Purchase and Floor Stocking financing will be able to facilitate online application and tracking of application status through Carsome online platform for its stock-finance and end-finance arrangement”, added Tan Sri Tay.
Public Bank is committed to support Malaysia’s transformation to digitalisation and will continue to initiate new or improve existing efforts in the future.
Carsome is an online vehicle bidding platform and currently one of the largest car live bidding or auctioning platforms in Malaysia. Incorporated in 2015, the group’s integrated car e-commerce platform is also one of Southeast Asia’s largest. Carsome has a total of 21 inspection outlets and 15 retail outlets nationwide. The retail outlets serve as one-stop centre where customers can trade-in their used car, purchase a newer or different used car and have it delivered and transacted in one centralised location.
Public Bank Recognised for its Contribution in e-Payments
MEEA is organised annually by Payments Network Malaysia Sdn Bhd (PayNet) to recognise outstanding achievements of banks, businesses and government agencies that have contributed significantly towards excellence, innovation and growth of e-payments in Malaysia.
Having won The Best MyDebit Bank in Malaysia for the sixth consecutive years in addition to consistently winning other e-payment award throughout the years is indeed a recognition towards Public Bank’s efforts in boosting the e-payment system.
In congratulating Public Bank, PayNet, the nation’s network and shared central infrastructure provider for Malaysia’s financial markets said, “Public Bank’s commitment and holistic efforts to drive usage, acceptance, reliability, customer engagement and experience have made a significant impact in propelling e-Payments in Malaysia to greater heights.”
Ensuring customers’ banking needs are met through the use of e-payment systems is part of Public Bank’s digitalisation initiatives focusing on customers’ convenience while ensuring security of its products and services.
Public Bank’s commitment to service excellence is seen with the uninterrupted service throughout the various movement restrictions due to the COVID-19 pandemic and this commitment continues with the gradual economic recovery, elevating customer experience further in the new normal.
As the first bank in Malaysia to accept cross border QR payments from Thailand and Indonesia, Public Bank remained at the forefront of e-payments services with this timely offering as it also helped to curb the spread of COVID-19 by reducing physical contact between buyers and traders.
This service continues to remain relevant with the opening of international borders where travellers from Thailand and Indonesia can opt to make payments to participating PBe QR merchants using their respective home country’s bank accounts.
This is further supported with Public Bank’s latest secured online payment solution – DuitNow Online Banking/Wallets launched early this year to further support the growing needs of a cashless economy.
DuitNow Online Banking/Wallets supports merchants in facilitating real-time payment acceptance via both online banking and eWallets and is a step forward by creating a more seamless payment experience involving various gateways, something that customers will appreciate.
Public Bank will continue to provide full support to boost the country’s migration to electronic payments by launching more e-Payment initiatives while continuously enhancing its digital banking platform.
In addition, Public Bank recognises the need for businesses to transform and digitalise their business operations in order to thrive in the new normal and supporting businesses in their digitalisation journey, Public Bank offers its corporate customers with the PB enterprise Digital SME Assist Program.
Through this exclusive collaboration with various digital partners with expertise in the fields of accounting, human resource management, telecommunications and others, Public Bank’s corporate customers can enjoy exclusive privileges ranging from discounts and rewards on various digital business solutions. Corporate customers will also be able to stay up to date with the latest development of the industry with a series of webinars.
Hence with a holistic approach to support its customers, Public Bank continues to offer services that would assist its corporate customers to accelerate their growth by enhancing their digital capabilities in tandem with their business expansion.
Public Bank Remains Proactive in Supporting the Nation’s Post Pandemic Recovery
“Public Bank has been proactive in providing support to its customers since the beginning of the pandemic and will continue to provide repayment assistance to those affected by the pandemic while supporting the nation’s economic recovery,” said Public Bank Managing Director and Chief Executive Officer, Tan Sri Dato’ Sri Dr. Tay Ah Lek.
In this highly challenging operating environment, Public Bank’s financial resilience and solid foundation built over the years have enabled the Bank to continue serving the nation.
Ongoing Assistance for Customers Affected by the Pandemic and Floods
As at the end of 2021, about 438,000 customers with total loans of about RM83 billion have received COVID-19 repayment assistance to manage their debt burden. Public Bank has consistently reached out to its customers to ensure that those in need of financial assistance receive the necessary help. The Bank has also set up various engagement channels, such as digital platforms and special repayment assistance helpdesk lines to provide more efficient assistance to affected customers and to keep them promptly updated with the various repayment assistance available.
Repayment assistance is not limited to only customers affected by the pandemic but also for customers who experience unfortunate events, such as floods.
Severe floods in several states in the country has affected many livelihoods as at end of December 2021. Public Bank has remained committed to provide relief to help the affected customers to weather their financial difficulties.
Since 2016, the Bank has approved flood moratorium of about RM2.5 billion for close to 13,000 customers. The Bank is fully committed to continue providing relief to its customers whenever the need arises.
Providing Support to the Backbone of the Economy
Small and medium sized enterprises (SMEs), which is known to be the backbone of the economy, continue to receive undivided attention from Public Bank.
Public Bank is one of the major financiers supporting SME growth. As at the end of 2021, the Bank’s domestic SME financing portfolio stood at RM67.9 billion with a market share of about 21%.
Public Bank’s support for the SMEs remains unwavering during the COVID-19 pandemic where about RM3.4 billion of financing has been approved under special schemes initiated by the Government and Bank Negara Malaysia (BNM), benefiting more than 17,000 SMEs during this unprecedented period.
“Every single ringgit of financing that goes to SMEs will have a high multiplier effect, from the purchase of raw materials to paying employees’ salaries and eventually contributing taxes to the Government. Public Bank, as one of the main SME financiers in the country, will continue to provide financing access to SMEs in support of the nation’s economic recovery,” Tan Sri Tay said.
Promoting Greater Financial Inclusion For Households
As the largest financier of residential property in the country, Public Bank has over the years been consistently supporting home ownership, particularly affordable housing for the mass market.
Since 2016, Public Bank has approved more than RM35 billion for the financing of residential property costing below RM450,000.
The Bank’s effort in supporting affordable housing remained unfaltering during the pandemic, with more than RM7.7 billion loans approved for 27,000 customers in 2021 to support them to own a home. During the year, about 57% of the Bank’s newly approved housing loans was for the purchase of property costing RM100,000 to RM500,000.
Holistic Approach in Contributing to the Nation’s Economic Recovery
As a responsible corporate citizen, Public Bank has been consistently contributing taxes as well as providing consistent dividend payout to its retail investors and institutional investors such as the Employees Provident Fund.
Throughout the years, these have created value for its stakeholders through income generation with various spillover and multiplier effects, stimulating the economy and supporting employment in the process.
Going forward, Public Bank is fully committed to further strengthen its role as a financial intermediary contributing to the nation’s development.
“Public Bank is fully supportive of BNM’s Financial Sector Blueprint 2022-2026. Guided by the three broad themes under the Blueprint, ‘Finance For All’, ‘Finance For Transformation’ and ‘Finance For Sustainability’, Public Bank aims to further propel its strength in banking to support the nation’s economic transformation and strengthen financial well-being for households and businesses, while accelerating the transition to a greener economy,” Tan Sri Tay said.
RM2.00 Billion Net Profit In Q1 2022
Tan Sri Dato’ Sri Dr. Teh Hong Piow, the Founder, Chairman Emeritus, Director and Adviser of Public Bank said, “Overall, the operating environment still remains highly challenging. However, the Public Bank Group’s sound fundamentals, coupled with its strategic vigilance and agility, continued to enable the Group to sustain financial resilience.”
Tan Sri Teh added, “In the first quarter of 2022, the Public Bank Group continued to sustain a resilient net return-on-equity of 11.8% and efficient cost-to-income ratio of 33.2%.”
As at the end of March 2022, the Public Bank Group’s total loans recorded an annualised growth of 5.3% to RM362.7 billion. Domestic loans grew stronger at an annualised rate of 5.9% to RM339.6 billion. This was mainly contributed by its retail sector, in particular financing for residential properties and hire purchase financing. Total loans approved rose by 14.0% in the first quarter of 2022, as compared with the corresponding period in 2021. The Group sustained its leading position in the residential properties, commercial properties and hire purchase financing with market share of 20.5%, 34.0% and 30.4% respectively.
In terms of funding, the Group’s total customer deposits recorded an annualised growth of 4.6% to RM384.8 billion. Domestic deposits grew at a same pace with annualised rate of 4.6% to RM356.7 billion.
For the first quarter of 2022, the Public Bank Group’s non-interest income was lower by 10.9%, as compared with the previous corresponding quarter. This was mainly due to the decline in the Group’s income from its unit trust and stockbroking businesses as well as lower investment income arising from the unfavourable market condition during the quarter. However, the other banking related fee income remained stable.
The Group recorded an increase of 1.5% in overhead expenses. Tan Sri Teh said, “In pursuit of cost optimisation strategy, the Public Bank Group continues to adopt a prudent approach in managing its operating overhead. In the first quarter of 2022, the Group’s cost-to-income ratio remained at an efficient level of 33.2%, as compared with the domestic banking industry’s average of 48.1%.”
As at the end of March 2022, the Public Bank Group’s gross impaired loans ratio remained low at 0.3%, well below the industry’s gross impaired loans ratio of 1.5%.
Since the onset of the COVID-19 pandemic in 2020, the Public Bank Group remained committed to assist individuals and businesses who faced repayment constraint by offering various flexible relief assistance packages. In addition, the Group also continued to provide various financing support to SMEs, including the various SME financing schemes initiated by the Government and Bank Negara Malaysia.
The Public Bank Group’s overseas operations contributed 7.5% to the Group’s profit, whereby Public Financial Holdings Limited Group (PFHL) and Cambodian Public Bank (Campu Bank) continued to be the main contributors.
Malaysia’s proactive actions to contain COVID-19 is set to further stimulate the economy with the reopening of more social and economic sectors as well as international borders. Nevertheless, challenges surrounding the outlook remain due to external and domestic factors, such as the resurgence of COVID-19 variants and geopolitical tensions.
Tan Sri Teh commented, “With the economic recovery expected to gain further traction going forward, it will further stimulate sentiments on the ground, providing a more supportive environment for businesses.”
Tan Sri Teh concluded, “After two years into the COVID-19 pandemic, the Public Bank Group’s resilience to challenges has been further strengthened. Coupled with its sound fundamentals built over the years, the Public Bank Group will remain in good stead to capitalise growth opportunities in the post-pandemic economy going forward. The Group will remain steadfast in pursuing its organic business strategy, improving cost efficiency and maintaining superior asset quality to support sustainable growth.”
Tan Sri Dato’ Sri Dr. Teh Hong Piow, the Founder, Chairman Emeritus, Director and Adviser of Public Bank said, “Overall, the operating environment still remains highly challenging. However, the Public Bank Group’s sound fundamentals, coupled with its strategic vigilance and agility, continued to enable the Group to sustain financial resilience.”
Tan Sri Teh added, “In the first quarter of 2022, the Public Bank Group continued to sustain a resilient net return-on-equity of 11.8% and efficient cost-to-income ratio of 33.2%.”
As at the end of March 2022, the Public Bank Group’s total loans recorded an annualised growth of 5.3% to RM362.7 billion. Domestic loans grew stronger at an annualised rate of 5.9% to RM339.6 billion. This was mainly contributed by its retail sector, in particular financing for residential properties and hire purchase financing. Total loans approved rose by 14.0% in the first quarter of 2022, as compared with the corresponding period in 2021. The Group sustained its leading position in the residential properties, commercial properties and hire purchase financing with market share of 20.5%, 34.0% and 30.4% respectively.
In terms of funding, the Group’s total customer deposits recorded an annualised growth of 4.6% to RM384.8 billion. Domestic deposits grew at a same pace with annualised rate of 4.6% to RM356.7 billion.
For the first quarter of 2022, the Public Bank Group’s non-interest income was lower by 10.9%, as compared with the previous corresponding quarter. This was mainly due to the decline in the Group’s income from its unit trust and stockbroking businesses as well as lower investment income arising from the unfavourable market condition during the quarter. However, the other banking related fee income remained stable.
The Group recorded an increase of 1.5% in overhead expenses. Tan Sri Teh said, “In pursuit of cost optimisation strategy, the Public Bank Group continues to adopt a prudent approach in managing its operating overhead. In the first quarter of 2022, the Group’s cost-to-income ratio remained at an efficient level of 33.2%, as compared with the domestic banking industry’s average of 48.1%.”
As at the end of March 2022, the Public Bank Group’s gross impaired loans ratio remained low at 0.3%, well below the industry’s gross impaired loans ratio of 1.5%.
Since the onset of the COVID-19 pandemic in 2020, the Public Bank Group remained committed to assist individuals and businesses who faced repayment constraint by offering various flexible relief assistance packages. In addition, the Group also continued to provide various financing support to SMEs, including the various SME financing schemes initiated by the Government and Bank Negara Malaysia.
The Public Bank Group’s overseas operations contributed 7.5% to the Group’s profit, whereby Public Financial Holdings Limited Group (PFHL) and Cambodian Public Bank (Campu Bank) continued to be the main contributors.
Malaysia’s proactive actions to contain COVID-19 is set to further stimulate the economy with the reopening of more social and economic sectors as well as international borders. Nevertheless, challenges surrounding the outlook remain due to external and domestic factors, such as the resurgence of COVID-19 variants and geopolitical tensions.
Tan Sri Teh commented, “With the economic recovery expected to gain further traction going forward, it will further stimulate sentiments on the ground, providing a more supportive environment for businesses.”
Tan Sri Teh concluded, “After two years into the COVID-19 pandemic, the Public Bank Group’s resilience to challenges has been further strengthened. Coupled with its sound fundamentals built over the years, the Public Bank Group will remain in good stead to capitalise growth opportunities in the post-pandemic economy going forward. The Group will remain steadfast in pursuing its organic business strategy, improving cost efficiency and maintaining superior asset quality to support sustainable growth.”
Founder, Chairman Emeritus, Director and Adviser of Public Bank
The Q&A by MSWG during Public Bank’s 56th AGM
Q: For the past two financial years, Public Bank had collectively provided RM1.77 billion of management overlays (macroeconomic variables + COVID-19 related management overlay) as a pre-emptive provision for potential credit risk deterioration due to the COVID-19 pandemic.
What is the visibility on writing back the management provision made in FY2020-FY2021?
R: Public Bank undertakes periodic assessments to review and monitor the relevance and adequacy of management overlay. The review takes into consideration the pace of economic recovery, macroeconomic indicators, loan repayment patterns and credit risk profile changes of customers as well as the overall business condition prior to proposing any write-back of the management overlay.
For 2022, in view that downside risks remain in the economic environment, Public Bank will continue to adopt a prudent approach in setting aside provisions or writing back any such provisions. Major write back of provision is not likely in 2022.
Q: As at end of FY2021, Public Bank’s loan loss coverage (LLC) ratio increased significantly to 360.7% compared to 227.7% the year before. Public Bank’s LLC ratio was also significantly higher than the industry’s average of 129%.
Will there be a normalised loan loss coverage ratio going forward?
(360.7% as at end of 2021, compared to 227.7% as at end of 2020)
R: The high loan loss coverage was mainly due to pre-emptive management overlay made in 2020 and 2021. With the continuing prudent provisioning approach, loan loss coverage will only normalise in the near term at a gradual pace in line with the economic recovery.
Q: What is the Bank’s credit cost guidance for FY2022?
R: For 2022, Public Bank is guiding a credit cost of below 20 basis points as compared to 34 basis points in 2021.
Q: Bank Negara Malaysia’s recent decision to increase Overnight Policy Rate (OPR) by 25 basis point should bode well for banks, especially banks with high ratio of variable rate loans.
As of FY2021, variable rate loans made up about 77.72% of Public Bank’s gross financing and advances (page 84, Note 9 – Loans, Advances and Financing, Financial Statements, AR2021).
Based on the Bank’s sensitivity analysis, what is the impact on the net interest margin and funding cost for every 25 basis points increase in OPR?
R: With the recent OPR hike, overall net interest income and funding cost are expected to increase accordingly. For Public Bank, a 25 basis point hike in OPR is expected to lead to a full year impact of about 4 basis points increase in net interest margin.
Q: Public Bank continued to be the most cost efficient bank in the domestic banking industry with cost-income ratio (CIR) of 31.6% in FY2021 (FY2020: 34.6%). The improved CIR was driven by robust growth in income and prudent cost discipline.
As the prospect of Malaysian economy improves, does the Bank expect a pick-up in spending which is in line with inflationary pressure and the increased need for investment in IT and digitalisation? What is the management guidance for CIR?
R: With the resumption of many business activities, it is expected that expenses will normalise to pre-pandemic level, with cost-to-income ratio expected at 34%-35% for 2022.
Investment in digitalisation will remain a strategic focus area for Public Bank. With digital banking fast expanding, it is imperative to continue investing in digitalisation initiatives to enhance customer experience and operational efficiency.
Overall, Public Bank will continue to remain prudent in cost management.
Public Bank and EcoWorld Signed MoU to Offer Special End-Financing Package for Projects with Green Certifications
26 Aug 2022
Public Bank and EcoWorld signed a Memorandum of Understanding (MoU) on 26 August 2022 for a collaboration on green and sustainable development financing.
Under this MoU, Public Bank will offer its Special Sustainable Financing Package for customers to purchase properties developed by EcoWorld which have attained green certifications from Green Building Index, GreenRE and other accreditation bodies.
The signing of the MoU was held at Eco Grandeur, EcoWorld’s largest township which is situated in the emerging Puncak Alam growth corridor in the Klang Valley. Along with Eco Business Park V (EBP V), which is part of EcoWorld’s series of green industrial parks being developed in the same corridor, the combined acreage of the two projects span close to 2,300 acres. Both Eco Grandeur EBP V projects are funded by Public Bank, EcoWorld’s financing partner right from the beginning in 2016. EcoWorld also took this opportunity to host a township tour for Public Bank’s representatives.
Tan Sri Dato’ Sri Dr. Tay Ah Lek, Managing Director and Chief Executive Officer of Public Bank signed the MoU with Dato’ Chang Khim Wah, Executive Director, President and Chief Executive Officer of EcoWorld. The signing was witnessed by Dato’ Chang Kat Kiam, Deputy Chief Executive Officer of Public Bank and Mr. Liew Tian Xiong, Executive Director, Deputy President and Deputy Chief Executive Officer of EcoWorld, in the company of other senior officers of both parties.
The collaboration presents a good opportunity for Public Bank and EcoWorld to jointly promote green building agenda and be part of the global climate solution for a sustainable planet.
The Special Sustainable Financing Package forms part of the Bank’s green initiatives to encourage individuals and businesses to reduce their carbon footprint and pursue sustainability.
The package covers the financing of residential and non-residential properties under Public Bank’s Green 5HOME Plan and Green SWIFT Plan respectively. Attractive features offered include preferential pricing, fast lane approval and a financing option for customers who wish to purchase eco-friendly and energy efficient appliances, fixtures and fittings to enhance the sustainability elements of their properties.
Tan Sri Tay in his speech stated the Bank’s commitment to achieve carbon neutrality by 2030 and net zero by 2050 besides mobilising RM40 Billion in ESG friendly financing by 2025 including making green building financing more accessible to customers.
Meanwhile Dato’ Chang Khim Wah said that Public Bank is certainly making good its pledge to be a catalyst for meaningful change as part of its efforts to reach net-zero by 2050.
To reflect EcoWorld’s long-term sustainability aspirations, a detailed Sustainability Framework was established for both Eco Grandeur and EBP V from the outset. This Framework serves as a guide on the steps to be taken to fulfil EcoWorld’s vision for sustainable development and the establishment of a sustainable society.
At the earliest stage, the gaps and needs of the site were analysed. These include issues faced by the local and surrounding communities and how they can be improved and mitigated. Value creation was accelerated and enhanced via judicious infrastructure investment and sustainable master planning, with potential for much further growth as these two complementary projects continue to progress and mature.
From an environmental standpoint, biodiversity processes and patterns were also studied and taken as bio-indicators to drive the master planning effort which seeks to harmonise the built environment with nature. Town parks, pocket and linear parks, waterways and waterbodies were created and reconfigured to enable the natural flora and fauna of the site to thrive.
Social justice issues were also addressed when Eco Grandeur successfully completed and handed over 987 landed units to the original settlers of the land who had waited for more than 20 years for their dream homes, following the abandonment of the project by the previous developers.
Tan Sri Tay highlighted that while the property sector is an important contributor to the nation’s gross domestic product, studies showed that the sector drives almost 40% of global carbon emissions, making it central to global climate change mitigation efforts.
“This MoU signing is a step in the right direction as EcoWorld is addressing the sector’s climate impact through the conceptualisation, design and construction of many sustainable projects in the country, including in Klang Valley, Johor and Penang. EcoWorld’s vision of ‘Creating Tomorrow & Beyond’ encapsulates its core value of pursuing sustainability in its business strategies and development projects. In particular, the Group’s flagship projects of Eco Grandeur and EBP V will transform the Puncak Alam landscape into a sustainable and thriving community,” said Tan Sri Tay.
Chang recorded his appreciation to Public Bank for their faith in EcoWorld when they worked on the site which had been abandoned for close to two decades.
“Today, less than six years since we first acquired the lands in 2016, the entire corridor where Eco Grandeur and EBP V are situated has become a thriving residential, commercial and industrial hub,” he concluded.
From left: Dato’ Chang Kat Kiam, Tan Sri Tay Ah Lek, Dato’ Chang Khim Wah, and Mr. Liew Tian Xiong
Public Bank and Sunway Property Collaborated to Promote End-Financing for Green Development Projects
5 Sep 2022
Public Bank and Sunway Integrated Properties Sdn Bhd (Sunway Property) signed a Memorandum of Understanding (MoU) to collaborate on property financing for green and sustainable development projects.
Public Bank’s Managing Director and Chief Executive Officer, Tan Sri Dato’ Sri Dr. Tay Ah Lek said with this MoU, customers who purchase green-certified properties for both residential and non-residential properties developed by Sunway Property will get to enjoy Public Bank’s Special Sustainable Financing Package.
“Through this special package, customers will get to enjoy preferential pricing, fast lane approval and a financing option for customers who wish to purchase eco-friendly and energy efficient appliances, fixtures and fittings to further enhance the sustainability elements of their properties,” said Tan Sri Tay during the signing ceremony.
The MoU was signed with Sunway Property’s Managing Director, Ms. Sarena Cheah, in the presence of senior officers of both parties on 5 September 2022 at Menara Public Bank, Kuala Lumpur.
Tan Sri Tay said that this MoU is a momentous occasion aligned with Public Bank's sustainability mission to pursue Climate Action and contribute towards global climate solutions. "In line with Public Bank's commitment to be carbon neutral by the year 2030 and net-zero by 2050, the Bank will be mobilising RM40 billion in ESG-friendly financing by 2025, including making green building financing more accessible to customers", Tan Sri Tay added.
As the leading property financier in the country with a strong market share of 20.5% and 33.8% respectively in residential and non-residential properties financing as of June 2022, Tan Sri Tay said, “Public Bank is certainly well positioned to encourage green property ownership in the country.”
Expressing her support and enthusiasm of the MoU, Ms. Sarena Cheah in her speech said that the signing marks a milestone in both companies’ journey together towards a carbon-neutral Malaysia.
“We are confident that with this collaboration, we can synergise our strengths and deliver value to the larger community as well as drive the 2030 Agenda forward. We look forward to working with Public Bank to do well by doing good,” she concluded.
Sunway Property, in alignment with the Sunway Group, has set five ESG goals with 19 targets to fully support Malaysia’s transition to a low-carbon, climate-resilient economy by 2030, with sights set on net zero by 2050.
The first of these goals is to drive the transformation of Sunway Property’s developments into low-carbon, sustainable cities and aims to reduce emissions, achieve a set of resource efficiency targets, divert waste into landfills and certify industrial and construction sites amongst others, by 2030.
From left, Dato’ Chang Kat Kiam, Deputy Chief Executive Officer, Public Bank, Tan Sri Dato’ Sri Dr. Tay Ah Lek, Managing Director and Chief Executive Officer, Public Bank, Ms. Sarena Cheah, Managing Director, Sunway Property and Mr. Chong Sau Min, Senior Executive Director, Sunway Property during the MoU signing ceremony
MM2HCA National Workshop 2022
6 Oct 2022
Malaysia My Second Home Consultants Association (MM2HCA) organised the MM2HCA National Workshop on 6 October 2022 at Avante Hotel, Petaling Jaya.
Public Bank participated in the workshop by setting up a booth at the event. Staff from International Business Unit, Financial Institutions Department as well as Damansara Utama Branch manned the booth and were on hand to promote and attend to queries related to Public Bank’s MM2H Pre-Opening of Deposit Account Services, Red Carpet Banking Membership, RCB Exclusive Invitation and Referral.
Honourable guests include representatives from Ministry of Home Affairs, Immigration Department of Malaysia, Royal Malaysia Police, Ministry of Tourism, Arts & Travel Council and Tourism Malaysia were present during the workshop.
There were about 200 MM2H Agents including committee members nationwide attended the workshop in aim to upgrade and enhance their skills, knowledge and professionalism after two years of hiatus due to COVID-19 pandemic.
The session was fruitful and engaging to all the participants. As a token of appreciation, MM2HCA presented a memento to Public Bank for sponsoring the Technical Handbook Advertisement Programme and its continuous support for the workshops that they have been organised.
Mr. Anthony Liew, MM2HCA President presenting the memento to Mr. Tan Sen Fong, Public Bank International Business Unit at the workshop
Customers Affected by Frauds and Scams Will Be Assisted
26 Sep 2022
The five key measures to combat scams announced by the Governor of Bank Negara Malaysia, Tan Sri Nor Shamsiah binti Mohd Yunos at the Financial Crime Exhibition 2022 held on 26 September 2022 will effectively raise the level of online banking security.
Tan Sri Dato’ Sri Dr. Tay Ah Lek, Managing Director and Chief Executive Officer of Public Bank said that the Bank will continue to emphasise on banking security for customers to ensure that all customers can conduct their online banking transactions in a secure and safe environment.
Public Bank has taken further steps to address the rising trend of frauds and scams including providing 24 hours assistance to customers via its Case Management Unit. “The unit is staffed with specially trained and experienced staff to provide the necessary and timely assistance to affected customers. As time is of the essence, Public Bank’s staff will be available to assist you 24/7,” Tan Sri Tay said.
Upon receiving a fraud or scam report, access to the customer’s PBe Internet Banking and PB engage Mobile Banking will be terminated immediately. This will prevent further unauthorised transfers while the Bank expedite recovery of stolen funds.
To further empower customers, since March this year, customers can also self-deactivate their access to PBe Internet Banking and PB engage Mobile Banking under such circumstances via the PBe login page. Reactivation can only be done at the branch or by the staff at the Case Management Unit with the necessary verifications.
Staying vigilant is vital and Public Bank has also stepped up its efforts to protect customers’ accounts by introducing a series of counter measures in its fraud detection and prevention system based on the evolving modus operandi of frauds and scams. The system will flag out suspicious and abnormal transactions performed on customers’ account and they are constantly reviewed to determine the effectiveness. Customers transferring to any new beneficiary via PBe and PB engage will also be prompted with a warning message to alert customers to be extra cautious before proceeding with the transfer.
In addition, Public Bank has deployed a more secure authentication method via mobile app security token known as PB SecureSign (PBSS) on the PB engage Mobile Banking since August 2020 that can counter one of the fraud tactics by scammers using the Android Package Kit (APK).
The PBSS can only bind to one mobile device with a stringent activation process where customers who have registered PBSS on their PB engage are required to activate it via Branch, ATM or by contacting PBe Customer Support.
Public Bank will also enable transaction approval via PB SecureSign app (PBSS) for PBe Internet Banking by October 2022. Similar to PB engage, customers with PBSS activated can approve transactions in a more secure authentication method. This will replace the PBe Authentication Code (PAC) via SMS which will eventually be phased out.
Since 2017, Public Bank has maintained a record of about 100,000 reported mule accounts of the industry. Based on this mule database, for the first half of 2022, approximately 500,000 of our customers’ accounts were prevented and saved from the attempted fraudulent transfers of close to RM900 million to these mule accounts.
Public Bank is fully committed to work steadfastly with all parties to combat this security threat and has also embarked on intensive education efforts to keep customers updated of the latest trend and evolving modus operandi of frauds and scams happening.
These education efforts also include raising customer awareness on the importance of being vigilant at all times by NOT clicking on UNKNOWN links, safeguarding their privacy and banking information, being careful with suspicious apps before installing them to ensure that their devices remain secure at all times and other precautions needed to safeguard customers from frauds and scams.
Tan Sri Dato’ Sri Dr. Tay Ah Lek
Managing Director and Chief Executive Officer of Public Bank
Underwriting Agreement Signed Between Public Investment Bank Berhad and DS Sigma Holdings Berhad for Its IPO Exercise
3 Nov 2022
Public Investment Bank Berhad (PIVB) had signed an Underwriting Agreement with DS Sigma Holdings Berhad (DS Sigma) for its Initial Public Offering (IPO) in conjunction with its intended listing on ACE Market of Bursa Malaysia Securities Berhad in early 2023.
The Agreement was signed on 3 November 2022 at Menara Public Bank by Mr. Lee Yo-Hunn, Chief Executive Officer of PIVB and Ms. Lucille Teoh, Managing Director of DS Sigma.
DS Sigma is an established packaging solutions provider with over 20 years of track record while PIVB is the Principal Adviser, Sponsor, Sole Underwriter and Sole Placement Agent for the IPO exercise.
Mr. Lee Yo-Hunn, CEO of PIVB (right) and Ms. Lucille Teoh, MD of DS Sigma during the Signing of Underwriting Agreement ceremony
Appointment of Public Mutual’s New CEO, Mr. Chiang Kang Pey
14 Nov 2022
Public Bank’s wholly-owned subsidiary, Public Mutual, announced the appointment of its new Chief Executive Officer (CEO), Mr. Chiang Kang Pey. His appointment as CEO following the retirement of Ms. Yeoh Kim Hong, who had held the position for the last 15 years.
Mr. Chiang assumed the role of Deputy Chief Executive Officer (DCEO) in October 2021. Prior to being appointed as the DCEO, Mr. Chiang was the General Manager of Equity Portfolio Management. He has also served as the designated fund manager of selected equity funds with Public Mutual since 2006.
Mr. Chiang is also a Chartered Financial Analyst charterholder. He holds a Master of Financial Management (Dean’s Honour List) degree from the Rotterdam School of Management, Erasmus University in the Netherlands, and a Bachelor of Economics in Accounting from Monash University in Australia.
Mr. Chiang Kang Pey, the new CEO of Public Mutual
RM6.31 Billion Pre-Tax Profit for the First Nine Months Ended September 2022 and 4.0 Sen Second Interim Dividend Declaration
30 Nov 2022
Public Bank announced that the Public Bank Group posted a pre-tax profit of RM6.31 billion and net profit attributable to shareholders of RM4.41 billion for the first nine months of 2022.
Tapping on the growing economy, the Public Bank Group’s pre-tax profit improved by 13.5% for the first nine months of 2022, compared with the corresponding period in 2021. Net profit attributable to shareholders grew by 3.0% after taking into account the one-off impact of prosperity tax.
The Board of Directors declared a second interim dividend of 4.0 sen per share, which resulted in a total dividend payout of RM776.4 million. The second interim dividend was paid on 23 December 2022 based on the dividend entitlement date of 15 December 2022.
Loans and Deposits Businesses
As at the end of September 2022, the Public Bank Group’s total loans expanded at an annualised rate of 5.8% to RM373.6 billion. Domestic loans grew at an annualised rate of 5.2% to RM347.8 billion, mainly supported by residential properties and hire purchase financing which expanded at an annualised rate of 7.4% and 9.9% respectively.
The Public Bank Group’s liquidity and funding structure remained healthy and supportive of its lending activities, with gross loan to fund and equity ratio of 81.3% as at 30 September 2022.
Non-Interest Income
The Group’s unit trust business through its wholly-owned subsidiary, Public Mutual registered a pre-tax profit of RM580.4 million in the first nine months of 2022, contributing 45% to the Group’s non-interest income. As at end-September 2022, Public Mutual continued to capture a large retail market share of 34.4%, with a total of 179 unit trust funds and total assets under management of RM88.7 billion.
Cost Management
Overhead expenses increased by 6.3% in tandem with the resumption of economic activities. Notwithstanding this, the Public Bank Group continued to be the most cost efficient bank in the domestic banking industry, with the lowest cost-to-income ratio of 32.6% in the first nine months of 2022.
Amid the high inflationary pressure, sustaining a high level of cost efficiency remains a competitive edge enabling the Group to continue implementing strategic plans to achieve business growth. The Group will continue its strategic investment in digital transformation and staff development to further strengthen long term productivity and business sustainability.
Asset Quality
As at end-September 2022, the Public Bank Group sustained a low gross impaired loans ratio of 0.3%, significantly lower than the domestic banking industry’s average gross impaired loan ratio of 1.8%.
Overseas Operations
The Public Bank Group’s overseas operations contributed 7.6% to the Group’s profit, mainly attributed to its Hong Kong and Indochina operations.
The Group continues to see good business opportunities in Indochina, particularly in Vietnam. In the first nine months of 2022, Public Bank Vietnam’s profit grew favourably by 13.4% as compared with the corresponding period last year.
Capital and Liquidity Position
As at the end of September 2022, the Group’s common equity Tier 1 capital ratio, Tier 1 capital ratio and total capital ratio stood at a healthy level of 14.0%, 14.0% and 17.1% respectively, after deducting the second interim dividend. The Group’s liquidity coverage ratio also remained stable at 123.2%.
Underpinned by its prudent approach in managing its financial resources, the Group continues to maintain a healthy balance sheet. This enables the Group to continue driving business growth despite the uncertainties in the operating environment.
Group’s Prospects
The Malaysian economic growth gains further momentum as the nation continues its post-pandemic recovery. While external trade is expected to moderate amidst a slower global economic growth, domestic demand continues to support economic expansion, with the job market and income prospects improving.
However, downside risks remain stemming from inflationary pressure, lingering supply chain disruptions, global monetary policy tightening and geopolitical tensions which could further weigh on the global economy.
The Public Bank Group will remain vigilant to the uncertainties and challenges. The Group will continue to build business resilience by maintaining healthy capital position, preserving asset quality, further strengthening its risk management capabilities and upholding sound corporate governance practices.
As the Group continues to leverage on its core banking business to grow its business, the Group will remain agile in strategy implementation to capture any business opportunities arising from the economic recovery and evolving business landscape.
