Media Release

Chairman’s Review

The Founder and Chairman of Public Bank, Tan Sri Dato’ Sri Dr. Teh Hong Piow is pleased to announce that, “The Public Bank Group registered a favourable performance in the third quarter of 2014, achieving a pre-tax profit of RM1.55 billion that translated to a 14.3% growth as compared to the corresponding quarter in 2013. Net profit attributable to shareholders also recorded an increase of 13.8% to RM1.19 billion over the same period.

On year-on-year basis, the Public Bank Group’s pre-tax profit grew by 7.0% to RM4.25 billion for the nine-month period ended September 2014. The Group’s net profit attributable to shareholders increased by 7.4% to RM3.26 billion over the same period.

The favourable achievements in the third quarter 2014 performance of the Public Bank Group were mainly due to the increase in operating revenue as a result of net interest income growth and steady non-interest income growth, coupled with stable credit costs. The increase in net interest income in the current quarter was attributable to the commendable loan and deposit growth as well as the positive impact arising from the hike in the overnight policy rate and the recently completed rights issue."

Tan Sri Teh commented that, “While the Malaysian economy was relatively stable and resilient for the first nine months of 2014, the growth sentiment has been moderating especially towards the third quarter of 2014. Despite facing the challenging operating environment, the Public Bank Group continued to perform well, particularly in its domestic commercial banking operations with a commendable double-digit annualised loan growth of 10.2%, outpacing the banking system’s annualised loan growth of 6.9%. The Group’s annualised customer deposits growth in respect of its domestic commercial banking operations was also strong at 11.0%, significantly surpassing the banking system’s annualised deposit growth of 4.0%. The positive results reinforce the Group’s steadfast commitment in its pursuit of organic growth strategy in the core retail banking business."

Tan Sri Teh further added that, “The Public Bank Group continues to deliver the best in return on equity, cost efficiency and asset quality when compared to its Malaysian banking peers. For the nine-month period ended September 2014, the Group recorded an efficient cost-to-income ratio of 30.7% and maintained its low gross impaired loans ratio of 0.7%. The Group also continued to record the highest net return on equity of 20.0%.”

Commendable Growth in Loans and Deposits
 
The Public Bank Group maintained commendable loan growth with an annualised growth rate of 9.8% in the first nine months of 2014 despite a subdued operating environment, supported by its commendable annualised domestic commercial banking loan growth of 10.2%.

The Public Bank Group’s loan growth was mainly attributed to the lending growth in its retail banking segment, comprising extension of financing for the purchase of residential properties, commercial properties and passenger vehicles. As at 30 September 2014, the Group’s retail loan portfolio collectively accounted for 87% of its total loans.

“Despite operating in a moderating business environment thus far this year, where competition for market share remained intense, the Public Bank Group has continued to sustain its market leadership position in the retail banking segment. Lending to small and medium enterprises had been particularly strong, recording an annualised growth of 21% in the first nine months of 2014,” remarked Tan Sri Teh.

Tan Sri Teh added that, “On the funding side, the Public Bank Group’s total customer deposits grew at an annualised rate of 9.3%, supported mainly from the Group’s strong growth in the domestic commercial banking customer deposits of 11.0%, which was more than 2.7 times of the domestic banking industry’s annualised growth of 4.0%.”

Steady Growth in Non-Interest Income

The Public Bank Group’s non-interest income increased steadily by 7.8% for the period ended September 2014 as compared to the corresponding period in 2013. This was mainly attributed to higher income from its unit trust business, investment income and fee income from banking operations.

The Public Bank Group will continue to focus on implementing various initiatives aimed at further improving the non-interest income contribution to the Group in order to sustain its high return on equity.

Tan Sri Teh commented that, “The Public Bank Group’s unit trust management business through its wholly-owned subsidiary, Public Mutual Berhad (“Public Mutual”), continued to contribute favourably to the Group’s overall profit by registering a consistent double-digit pre-tax profit growth of 16.3% as compared to the corresponding period in 2013. As at the end of September 2014, Public Mutual manages 107 funds with a total net asset value of RM62.3 billion and remains as the market leader with an overall market share of 40% in the private unit trusts business. Public Mutual also commands market leader position in the equity and Islamic unit trust fund sectors with 58% and 52% market share respectively as at the end of August 2014.”

Sustainable Cost

The Public Bank Group’s operating expenses for the period ended September 2014 increased by 5.2%, mainly attributable to the increase in personnel costs which were in tandem with the increased headcount to support business expansion.

Tan Sri Teh highlighted that, “The Public Bank Group continues to be the most efficiently managed bank in Malaysia with a low cost-to-income ratio of 30.7% as compared to the banking industry’s average cost-to-income ratio of 45.6%.

The Group will continue to emphasise on high productivity and efficiency in ensuring cost sustainability without compromising on compliance and service quality.”

Strong Asset Quality

“Relative to the banking industry’s gross impaired loans ratio of 1.7%, the Public Bank Group recorded a significantly lower impaired loans ratio of 0.7% as at the end of September 2014. The Group also maintained a higher and more prudent loan loss coverage ratio of 117.1% as compared to the banking industry's coverage ratio of 104.8%.

To ensure its competitive edge is well preserved, the Public Bank Group will continue to adopt a prudent approach in its credit risk management. This will be achieved through consistent and effective implementation of both preventive and proactive measures in its lending activities, such as establishing strict and prudent credit policies as well as putting in place efficient and effective approval and recovery processes,” said Tan Sri Teh.

Overseas Operations

The Public Bank Group’s overseas operations contributed 7.5% of the Group’s overall pre-tax profit for the nine-month period ended September 2014.

Tan Sri Teh commented that “Cambodian Public Bank Plc (“Campu Bank”), a wholly-owned subsidiary of Public Bank, registered a strong double-digit pre-tax profit growth of 48.7% to USD40.0 million as compared to the corresponding period in 2013 and is amongst the top three largest banks in Cambodia.”

In July 2014, Public Bank has entered into a conditional agreement with its joint venture partner to acquire the remaining 50% equity interest in VID Public Bank (VPB) not held by the Group. Upon completion of the exercise, VPB will become a wholly-owned subsidiary of the Group.

Healthy Capital Position

The Bank has successfully completed the renounceable rights issue exercise in August 2014 which raised RM4.8 billion equity capital. The rights issue exercise is part of the Group’s capital management strategy aimed to further strengthen the Group’s capital position to support its continuous business growth as well as to prepare for the forthcoming regulatory requirements under the Basel III framework.

With the completion of the rights issue exercise, the Public Bank Group’s capital position has been further enhanced with its common equity Tier 1 capital ratio, Tier 1 capital ratio and total capital ratio standing at 10.4%, 11.9% and 15.8% respectively as at the end of September 2014, and became the second highest capitalised banking group in Malaysia in terms of Tier 1 capital ratio.

Group’s Prospect

“Our strategies for the Public Bank Group remain unchanged. The Group will continue to focus on its core retail banking and financing business, whilst maintaining its prudent credit policies, as well as upholding strong corporate governance. The Group will leverage on its strong PB brand and its efficiently-run and wide-reach branch network as well as its delivery of excellent customer service to provide sustainable long term growth.

The Malaysian economy is expected to remain on a steady growth path, supported by moderating domestic demand but improving exports. On the banking industry front, we expect the net interest margin compression to persist as the competition for both loans and deposits market share remains intense. Despite facing these challenges,  the Public Bank Group is expected to maintain its earnings momentum for the rest of 2014,” concluded Tan Sri Teh.

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

Comments On The Budget 2015

Public Bank Berhad (PBB) is pleased to announce the launch of ‘PB Bonus Fortune’ Campaign which offers EXTRA 1.00% p.a. interest on the incremental savings. This Campaign is open to all new and existing individual customers of PBB and will run for 3 months from 1 September to 30 November 2014.

This Bonus Interest or additional interest of 1.00% p.a. is on top of the prevailing interest rates of the respective Eligible Account. The Eligible Accounts for the Campaign are Basic Savings Account, PLUS Savings Account, 50 PLUS Savings Account and ACE Account. Bonus Interest is payable on a minimum Incremental Average Daily Balance (ADB) of RM3,000 up to maximum Incremental ADB of RM300,000 for each Eligible Account.

Basic Savings Account offers you basic banking services at minimal cost with an initial deposit of just RM20 while PLUS Savings Account is an all-purpose savings account with an initial deposit of RM250. 50 PLUS Savings Account is specially designed for senior citizens aged 50 years and above with an initial deposit of RM2,000 and it offers greater security, comfort as well as returns. As for ACE Account, it is a hybrid account that offers the convenience of a checking account while letting you enjoy the attractive interest rates provided by a savings account.

“PB Bonus Fortune” Campaign is part of our initiatives to encourage savings by rewarding our customers when they increase their savings with PBB during the Campaign Period.

To enjoy the Bonus Interest, customers are required to register their participation via ONE (1) Short Message Service (SMS) during the Campaign Period. All you need to do is just key in “PBBF <space> 12-digit NRIC number” and send to 66300 and you are one step closer to be rewarded.

To find out more about this Campaign, customers are invited to meet our customer service representatives at any of our branches, log on to PBB website at www.pbebank.com or call free phone at 1-800-22-9999 during normal working hours. Terms and conditions apply.

To better reward our customers, Public Bank Berhad (PBB) and Public Islamic Bank Berhad (PIBB) have jointly launched the ‘PB Step Up FD’ Campaign which offers promotional interest / profit rates of up to 3.80% p.a. This Campaign is open to all new and existing individual and non-individual customers of PBB / PIBB and will run for 3 months from 1 July to 30 September 2014.

This Campaign provides customers the flexibility to make short term fixed deposit / investment placement and to rollover their fixed deposit / investment placement in order to earn higher interest / expected profit rates.

To enjoy higher interest / expected profit rates, customers are required to place 3-month fixed deposit / investment placement into PLUS Fixed Deposit Account (Conventional deposit account) or Istismar Account-i (Islamic investment account) during the Campaign period. Individual customers only need to deposit a minimum of RM20,000 to participate in the Campaign, subject to a maximum placement of RM10 Million. A higher minimum and maximum placement amount of RM50,000 and RM20 Million respectively is applicable to the non-individual customers.

Customers will enjoy a promotional interest / expected profit rate of 3.40% p.a. for the first 3 months. Should they rollover their placements for another 3 months, they will enjoy higher interest / expected profit rate of 3.60% p.a. (first rollover) and 3.80% p.a. (second rollover).

‘PB Step Up FD’ Campaign is part of our ongoing initiatives to reward our customers for their continued support and loyal patronage. We will continue to launch more campaigns to excite our existing customers and attract new customers to bank with us.

To find out more about this Campaign, customers are invited to meet our customer service representatives at any of our branches, log on to PBB website at www.pbebank.com or call free phone at 1-800-22-9999 during normal working hours. Terms and conditions apply.

* * * * * * * *

Public Bank and BonusLink have once again collaborated to launch a new campaign namely ‘Public Bank Welcome Offer’ (Offer) to reward our loyal customers and encourage savings. This Offer is open to all new and existing Public Bank customers who do not own a PB SaveLink (SALink) or PB CurrentLink (CALink) account. The offer period is from 21 July to 31 October 2014.

This special offer allows customers to collect a guaranteed 200 BonusLink Points (BLP) for SALink or 300 BLP for CALink account opened with Public Bank using fresh funds during the offer period. Only a minimum deposit of RM500 for SALink or RM3,000 for CALink is required to open the respective accounts.

In addition to the guaranteed BLP, a total of RM30,000 cash prizes awaits the lucky customers who open SALink or CALink. Ten (10) lucky winners will be awarded with RM3,000 cash prize each.

Both SALink and CALink are the only Savings and Current accounts in the country that offer BLP. Just save enough with Public Bank and you will be able to redeem exclusive gifts for yourself with the BLP you have collected.

SALink provides customers with both interest and BLP. Customers are entitled to BLP with every ringgit they have in their accounts provided that they keep a Monthly Average Credit Balance (MACB) of RM500 and above per month. Multi-tiered interests are calculated daily and credited at the end of each month.

As for CALink, customers are entitled to 0.06 BLP for every RM 1 of MACB when their MACB is maintained at RM500 and above every month. In addition, customers will be provided with a monthly statement to keep track of their expenditure.

To find out more about this Offer, customers are invited to meet our customer service representatives at any of our branches, log on to Public Bank’s website at www.pbebank.com or call free phone at 1-800-22-9999 during normal working hours. Terms and conditions apply.

* * * * * * * *

The Founder and Chairman of Public Bank, Tan Sri Dato’ Sri Dr. Teh Hong Piow is pleased to announce that, “The Public Bank Group recorded a net profit attributable to shareholders of RM2.1 billion for the half year ended 30 June 2014, representing a growth of 4.1% as compared to the corresponding period in 2013 and exceeding the RM2 billion mark for the first time. The Group’s pre-tax profit grew by 3.2% to RM2.7 billion during the same period.”

Tan Sri Teh commented that, “Although there are signs of moderation in the growth of certain sectors and concerns on inflation, the overall Malaysian economy continues to demonstrate resilience in the first half of 2014, supported by strong domestic demand. On that accord, I am delighted that the Public Bank Group is able to maintain its momentum by recording a commendable domestic loan growth of 10.6% on an annualised basis during the six-month period ended June 2014. The Group’s domestic customer deposits also registered a strong annualised growth of 11.4% during the same period.”

Tan Sri Teh added that “The Public Bank Group continues to be the leader amongst its Malaysian banking peers by  achieving the highest net return on equity of 20.8% and sustaining its strong asset quality and cost efficiency by continuously maintaining its low gross impaired loan ratio of 0.7% and cost-to-income ratio of 31.8% in the first half of 2014.”

“In view of the steady performance of the Group, I am pleased to announce that the Board of Directors has declared a first interim single-tier dividend of 23 sen, which will result in a total dividend payout of RM886 million. The new shares to be issued under the current rights issue exercise will also be entitled to the first interim dividend,” said Tan Sri Teh.

Commendable Growth in Loans and Deposits
 
The Public Bank Group continued to maintain traction in its loan growth with an annualised growth rate of 10% in the first half of 2014. This was driven by its commendable annualised domestic loan growth of 10.6%, which outpaced the domestic banking industry’s annualised loan growth rate of 6.9%.

The Group’s loan growth was mainly supported by lending to the retail banking segment, comprising extension of credit mainly to small and medium enterprises as well as for purchasing of residential properties and passenger vehicles. As at 30 June 2014, the Group’s retail loan portfolio collectively accounted for 87% of its total loans, while the lending to small and medium enterprises recorded a strong annualised growth of 23% in the first half of 2014.

 “Despite operating in a more subdued and regulated business environment as well as facing intense competition for market share, the Public Bank Group continues to maintain its market leadership position in domestic lending for residential mortgages, commercial property financing and passenger vehicles financing with market share of 19.5%, 33.4% and 27.2% respectively,” commented Tan Sri Teh.

Tan Sri Teh added that, “The Public Bank Group’s funding and liquidity position remained stable and healthy with loan-to-deposit ratio of 87.1%, supported by its strong retail deposit franchise with a large domestic depositor base of over 5 million customers. The Group’s total customer deposits grew at an annualised rate of 11%, mainly contributed by the Group’s strong domestic customer deposits annualised growth of 11.4%, which surpassed the domestic banking industry’s annualised growth of 4.5%.”

The strong deposit growth was mainly attributed to the steady inflow of fixed deposits, savings and current accounts, which grew by an annualised rate of 12.8%, 10.0% and 7.1% respectively.

Steady Growth in Non-Interest Income

The Public Bank Group remains focused in putting in place various initiatives to drive the growth of its non-interest income in order to sustain its high return on equity. The Group’s non-interest income improved by 6.9% in the first half of 2014 as compared to the corresponding period in 2013. This was mainly attributed to higher income from its unit trust business.

Tan Sri Teh remarked that, “The Group’s unit trust management business through its wholly-owned subsidiary, Public Mutual Berhad (“Public Mutual”), continued to contribute positively to the Group’s overall profit by achieving a strong double-digit pre-tax profit growth of 16.8% as compared to the corresponding period in 2013. As at the end of June 2014, Public Mutual manages 105 funds with a total net asset value of RM64.2 billion and remains as the market leader in the private unit trust business, capturing 41.1% of the overall market share, with 58.5% and 53.7% market share in the equity and Islamic unit trust fund sectors respectively.”

Sustainable Cost

The Group’s operating expenses in the first half of 2014 increased by 4.8%, mainly attributable to the increase in personnel costs which were in line with the increased headcount to support business expansion and nurturing of talent.

Tan Sri Teh highlighted that, “The Public Bank Group continues to be the most efficiently managed bank in Malaysia with a cost-to-income ratio of 31.8% in the first half of 2014 as compared to the banking industry’s average cost-to-income ratio of 45.6%. The Group will continue to place strong emphasis in prudent cost management to ensure cost sustainability by leveraging on existing resources to further enhance efficiency, particularly in this challenging and competitive operating environment, but without compromising on service quality and compliance.”

Strong Asset Quality

“The Public Bank Group continues to adopt a prudent approach in managing its credit risks. This is achieved by consistently carrying out a combination of both preventive and proactive measures in its lending activities, such as establishing strict and prudent credit policies, and putting in place efficient and effective approval and recovery processes.  As a result, the Group is able to maintain its strong asset quality. The Group’s gross impaired loan ratio of 0.7% as at the end of June 2014 is significantly lower than the banking industry’s ratio of 1.8%. The Group also maintained a higher and more prudent loan loss coverage ratio of 117.6% as compared to the banking industry's coverage ratio of 104.9%,” said Tan Sri Teh.

Overseas Operations

For the half year ended June 2014, the Public Bank Group’s overseas operations contributed 7.4% of the Group’s overall pre-tax profit. Cambodian Public Bank Plc (“Campu Bank”), a wholly-owned subsidiary of Public Bank, reported another set of strong pre-tax profit growth of 36.2% to USD22.9 million as compared to the corresponding period in 2013, amid the challenging business environment. Campu Bank remains as one of the top three largest banks in Cambodia.

Stable and Healthy Capital Position

The Public Bank Group’s capital position remained healthy and supportive of its business growth strategies. As at the end of June 2014, the Group’s common equity Tier 1 capital ratio, Tier 1 capital ratio and total capital ratio stood at 8.9%, 10.4% and 13.8%  respectively, after taking into account the provision for first interim dividend.

As part of the capital management strategy to further strengthen its capital position to support the continuous business growth of the Public Bank Group as well as to prepare for the forthcoming regulatory requirements under the Basel III framework, the Bank is currently undertaking a renounceable rights issue exercise which is expected to raise RM4.8 billion in equity capital. The exercise is targeted to be completed soon in the third quarter of 2014.

Group’s Prospect

“Our strategies for the Public Bank Group remain unchanged. The Group will continue to focus on its core retail banking and financing business, whilst maintaining its prudent credit policies, as well as upholding strong corporate governance. The Group will continue to leverage on its strong PB brand and its wide and efficient branch network as well as its excellent customer service to support long term sustainable growth.

With the expectation that the Malaysian economy will remain on a steady growth path of  between 4.5% to 5.5%, supported by improving external sector amid moderation in the domestic demand, the Public Bank Group is expected to maintain its earnings momentum for the rest of 2014,” remarked Tan Sri Teh.

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

PBB is pleased to announce that the shareholders of PBB had at the Extraordinary General Meeting (“EGM”) held this morning, 6 June 2014, approved the proposed PBB Rights Issue.

The Board of PBB had at a Board meeting held immediately after the EGM, resolved the following:

• The issue price of the Rights Shares is fixed at RM13.80 per Rights Share, representing a discount of approximately 33% to the theoretical ex-rights price of RM20.64 per PBB Share, calculated based on the five (5)-day volume weighted average market price of PBB Shares up to and including 5 June 2014 of RM21.32 per PBB Share

• The entitlement basis for the Rights Issue is one (1) Rights Share for every ten (10) existing PBB Shares held by shareholders of PBB at an entitlement date to be determined and announced later

• The PBB Rights Issue will entail the issuance of 350,212,513 new PBB shares and raise gross proceeds of RM4,832,932,679

The Abridged Prospectus together with the Notice of Provisional Allotment and Rights Subscription Form (collectively referred to as the “Documents”) will be despatched to entitled shareholders of PBB whose addresses in the Record of Depositors maintained by Bursa Malaysia Depository Sdn Bhd is an address in Malaysia, or they have provided an address in Malaysia for purposes of receiving the Documents.

Tan Sri Dato’ Sri Dr. Teh Hong Piow and his related companies, who collectively hold 24.08% shareholdings in PBB, have provided irrevocable undertaking letters to subscribe in full for their respective entitlements for the Rights Shares.

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

* * * * * * * *

Public Bank is pleased to announce the launch of Public Bank Berhad’s new internet banking website ‘PBe’ on 15 May 2014.

The totally new website was designed and developed with the objective of showcasing a bright, bold and contemporary website featuring responsive web design for optimal viewing where information displayed will automatically fit across a wide range of computers and mobile devices such as tablets and smartphones. Customers no longer need to pan, resize or scroll the webpages to perform their banking needs or obtain information on banking services, special products and promotions online. Together with the improved navigation and enhanced features, it will be a whole new rewarding experience for the Bank’s internet banking customers.

With the new website, the Bank is confident its customer base and the demand for electronic banking services would continue to see significant growth. This is also in line with Bank Negara Malaysia’s initiatives to promote e-payments and reduce the usage of cheques and cash for payments.

In conjunction with the introduction of the new PBe website, the Bank is pleased to launch the ‘Experience the New PBe and be Rewarded’ Campaign. New and existing customers who perform Interbank GIRO (IBG), Instant Transfer, Bill Payment and Prepaid Top-up with a minimum amount of RM30 will stand to win attractive weekly cash prizes. In addition, for the same type of transactions exceeding RM80, customers stand the chance to win one of the eight Grand Prize of the latest Samsung Galaxy S5 smartphones. The more transactions performed, the better the chances of winning any of the prizes. No SMS pre-registration is necessary nor the need for any catchy slogan. As long as the criteria are met, participation is automatic. The campaign will run from 19 May to 13 July 2014. All eligible winners will be duly notified and the list of winners published in our website.

To learn more about the new PBe website and campaign, please go to www.pbebank.com or call  PBe Customer Support at 03-21795000.

Public Bank Berhad today announced the launch of the Public Bank Visa Signature Credit Card, offering the market with a premium card tailored with a host of perks to fulfill the needs of customers that are pragmatic and status-oriented, aspiring at recognition and differentiation, and seeking higher rewards for their lifestyle.

The PB Visa Signature Credit Card is targeting the mid-affluent segment market with a minimum income level of RM100,000 per annum. This card offers 6% cash rebate on grocery, dining and online transactions while every Ringgit charged on other retail transactions will be rewarded with 1 VIP point which differentiate itself from other cards with only one reward system. Cardmembers can redeem VIP points for products from our Preferred Redemption Rewards Catalogue. As such, cardmembers enjoy both cash rebate and reward point through usage of this card.

Moreover, frequent travelers could have peace of mind while travelling as cardmembers are automatically insured by travel insurance of up to RM1.5 million and also able to enjoy unlimited complimentary access to Malaysia Plaza Premium Lounge with 5 overseas transactions within 30 days before and/or after each access. For frequent travelers, cardmembers can redeem VIP points for Air Miles which allow cardmembers to travel for free or other privileges. Meantime, RM50 Activation Cash Rewards will be credited upon one retail transaction charged within first two months once card approved.

To celebrate the launch, Public Bank Berhad will reward the first 300 qualified cardmembers with RM188 cash bonus added to his/her new Public Bank Visa Signature Credit Card account upon one retail transaction charged on the card within first two months from card approved date.

Present at the launch of PB Visa Signature Credit Card was Dato’ Chang Kat Kiam, Senior Chief Operating Officer of Public Bank Berhad and Mr. Tee Chui Chee, Director of PB Card Services, Public Bank Berhad, together with Mr. Ng Kong Boon, Country Manager, Malaysia, Visa at Menara Public Bank in Kuala Lumpur.

Commenting at the launch, Dato’ Chang, Senior Chief Operating Officer of Public Bank Berhad said, “Customers today are more savvy and sophisticated in their lifestyle choices. We are continually looking to provide our customers with greater rewards and privileges that complement their lifestyle needs.”

“An increasing number of Malaysian consumers are starting to look for exclusive services and lifestyle related offers. Visa understands the needs of this group of consumers and provides them access to the things that matter most to them. The Public Bank Visa Signature Credit card offers cardholders access to a wide range of services and lifestyle privileges with the convenience of Visa payWave contactless technology,” said Mr. Ng Kong Boon, Country Manager, Visa Malaysia.

“Visa payWave allows cardholders to make everyday purchases faster and easier by simply waving their

Visa payWave enabled card in front of a Visa payWave reader,” added Mr. Ng.

To find out more about this Card, customers are invited to meet our customer service representatives at any of our branches, log on to Public Bank’s website at www.pbebank.com or call PB Visa Signature Help Desk at 03-2176 8118. Terms and conditions apply.

(From left) Mr. Tee Chui Chee, Dato' Chang Kat Kiam and Mr. Ng Kong Boon at the launch of PB Visa Signature Credit Card

Ms. Cheah Kim Ling
Independent Non-Executive Director of Public Bank

Chairman’s Review

The Founder and Chairman of Public Bank, Tan Sri Dato’ Sri Dr. Teh Hong Piow is pleased to announce that, “The Public Bank Group recorded a pre-tax profit of RM1.33 billion and net profit attributable to shareholders of RM1.02 billion for the first quarter of 2014. Against the profits for the corresponding quarter in the prior year, the Group’s pre-tax profit and net profit for the first quarter of 2014 grew by 4.5% and 5.0% respectively.”

Tan Sri Teh highlighted that, “Despite the protracted external uncertainties and challenging operating environment with expected moderation in the overall domestic demand, the Public Bank Group continued to demonstrate resilience in performance, particularly for its domestic operations which recorded a healthy annualised loan growth of 10.7% and an annualised deposit growth of 14.2%.”

Tan Sri Teh further added that, “We are certainly encouraged that the Public Bank Group continued to be at the forefront amongst its banking peers in Malaysia, achieving the highest net return on equity of 20.5% whilst maintaining the lowest gross impaired loan ratio of 0.7% and cost-to-income ratio of 31.8% in the first quarter of 2014.”

Sustaining Growth Momentum in Loans and Deposits

The Public Bank Group sustained a healthy loan growth momentum at an annualised rate of 9.8% in the first quarter of 2014. Domestic loans grew at a stronger annualised rate of 10.7% over the same period. The Group maintained its market leadership position in its domestic lending for residential mortgages, commercial property financing and passenger vehicles financing with market shares of 19.6%, 33.7% and 26.9% respectively.

Lending to the retail banking segment remained the key focus of the Public Bank Group, with extension of credit mainly to small and medium enterprises as well as for purchasing of residential properties and passenger vehicles. As at the end of March 2014, the Group’s retail loan portfolio collectively accounted for 86% of its total loans. The Group’s lending to small and medium enterprises recorded an annualised growth of 25.2% in the first quarter of 2014.

Tan Sri Teh commented that, “The Public Bank Group’s funding and liquidity position remained supportive of its lending activities, backed by its strong retail deposit franchise with a large domestic depositor base of over 5 million customers. The Group’s total customer deposits grew at an annualised rate of 12.8%, with domestic customer deposits growing at a stronger annualised rate of 14.2%.”

The strong domestic deposit growth was mainly backed by the steady inflows of fixed deposits, low cost savings and current accounts, which grew by an annualised rate of 20.5%, 17.1% and 5.0% respectively.

Maintaining Growth in Non-Interest Income

Non-interest income of the Public Bank Group grew by 7.5% in the first quarter of 2014 as compared to the corresponding quarter in 2013, mainly driven by income from higher unit trust business and transactional banking services.

Tan Sri Teh said that, “The Group’s unit trust management business through its wholly-owned subsidiary, Public Mutual Berhad (“Public Mutual”), registered a strong double-digit performance during the quarter under review with a pre-tax profit growth of 17.1% as compared to the corresponding quarter in 2013. As at 31 March 2014, Public Mutual had 105 funds with total net asset value of RM62.6 billion under its management. It remained as the market leader in the private unit trust business, capturing 40.7% of the overall market share as at the end of February 2014, with 59.1% and 53.0% market share in the equity and Islamic unit trust fund sectors respectively. To further drive the Group’s unit trust business, Public Mutual will continue to place strong emphasis on building and nurturing unit trust consultants who are a highly effective distribution channel, to serve its unit trust customer base that has grown to over 3.0 million accounts as at the end of March 2014.” 

Observing Prudent Cost Management

Tan Sri Teh highlighted that, “The Public Bank Group remained the most cost-efficient bank in Malaysia with its cost-to-income ratio of 31.8% in the first quarter of 2014 as compared to the banking industry’s average ratio of 45.6%.”

“To ensure cost sustainability amid the challenging business landscape, the Public Bank Group will continue to practise prudent cost discipline, deploy adequate resources to review and improve its business processes, and ensure optimum utilization of its infrastructure to further enhance efficiency and productivity while ensuring strict compliance with internal operation standards and procedures,” added Tan Sri Teh.

Upholding Asset Quality

“Despite the strong growth in its loan portfolio year after year amid the continuously challenging environment in the markets in which it operates, the asset quality of the Public Bank Group remained resilient with a low gross impaired loan ratio of 0.7% as at the end of March 2014, significantly lower than the Malaysian banking industry’s gross impaired loan ratio of 1.8%,” said Tan Sri Teh.

The strong asset quality is a result of the Group’s consistent approach of carrying out a combination of both preventive and proactive measures in its lending activities, such as establishing strict and prudent credit policies, advocating strong discipline and “know your customer” culture in the credit assessment and approval processes as well as ensuring effective and efficient recovery processes.

Tan Sri Teh added that, “The Public Bank Group's loan loss coverage ratio stood at 119.1%, which was higher and more prudent than the banking industry's coverage ratio of 104.5%.”

Overseas Operations

For the first quarter of 2014, the Public Bank Group’s overseas operations contributed 6.9% of the Group’s overall pre-tax profit. Cambodian Public Bank Plc (“Campu Bank”), a wholly-owned subsidiary of Public Bank, reported a commendable growth in pre-tax profit of 32.2% to USD9.6 million as compared to the corresponding quarter in 2013, amid the challenging business environment, and remains as one of the top three largest banks in Cambodia.

Ensuring a 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 8.5%, 10.1% and 13.3% respectively as at the end of March 2014.

Tan Sri Teh emphasised that, “We will continue to assess the Group’s capital requirements to ensure that it is well positioned to support the Group’s business growth strategies by balancing the need for higher capital retention in view of the requirements under the Basel III capital regime whilst maximising our shareholders’ return.”

Group’s Prospect

“Our strategies for the Public Bank Group remain unchanged. The Group will continue to focus on its core retail banking and financing business, whilst maintaining its prudent credit policies, as well as upholding strong corporate governance. The Group will continue to leverage on its strong PB brand and its wide and efficient branch network as well as its excellent customer service to support long term sustainable growth.

With the expectation that the Malaysian economy will remain on a steady growth path of 4.5% to 5.5% in 2014, backed by domestic demand, albeit at a more moderate pace, the Public Bank Group is expected to maintain its earnings momentum for the rest of 2014,” remarked Tan Sri Teh.

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

Performance Review

Tan Sri Teh said, “The Public Bank Group recorded a pre-tax profit of RM5.31 billion in 2013, representing a growth of 5.2% as compared to 2012. The Group’s net profit attributable to shareholders exceeded the RM4 billion mark for the first time, increasing by 6.2% to RM4.06 billion.”

Tan Sri Teh commented that, “In 2013, the Public Bank Group recorded healthy double digit growth of 11.8% and 11.5% in gross loans and deposits. In particular, domestic loans and deposits grew at a faster rate of 12.0% and 11.6% respectively, leading to improved market shares in the domestic market.”

Tan Sri Teh highlighted, “As a result of the Group’s favourable performance in 2013, a second interim single-tier dividend of 30 sen was paid on 28 February 2014. Together with the first interim single-tier dividend of 22 sen which was paid in August 2013, the total dividend for 2013 was 52 sen.” The total dividend paid for 2013 amounted to RM1.82 billion and represented a total payout of 44.8% of the Group’s net profit for 2013.

Strong Double Digit Growth in Loans and Customer Deposits

The Group continued to focus its lending activities on the retail sector, with loans for the financing of residential properties, passenger vehicles and lending to small and medium enterprises. The Group’s retail loan portfolio collectively accounted for 86% of its total loans.

Tan Sri Teh said, “The Public Bank Group continued to command market leadership in domestic lending for residential mortgages, commercial property financing and passenger vehicle financing with market share of 19.6%, 33.8% and 26.5% respectively as at the end of 2013.”

“The Group’s funding position remained stable and healthy, supported by its strong retail deposit franchise of over five million customers. Domestic customer deposits grew by 11.6%, significantly higher than the domestic banking industry’s deposit growth of 8.5%.” commented Tan Sri Teh.The strong domestic deposit growth was mainly attributed to the steady inflow of fixed deposits and low cost savings and current accounts, which grew by 14.2%, 8.3% and 17.0% respectively.

Excellent Asset Quality

“The Public Bank Group’s gross impaired loans ratio remained low at 0.7% as at the end of 2013 which was significantly lower than the Malaysian banking industry’s gross impaired loans ratio of 1.9%.” commented Tan Sri Teh.

Tan Sri Teh further added, “The Group's loan loss coverage ratio stood at 118.5%, which was higher and more prudent than the banking industry's loan loss coverage ratio of 107.6%.”

International Operations

The Public Bank Group’s pre-tax profits from international operations registered a growth of 8.6% in 2013 and contributed 6.6% to the Group’s pre-tax profits in 2013. Cambodian Public Bank Plc (“Campu Bank”), a wholly-owned subsidiary of Public Bank, reported an improvement in profit contribution by 8.0% to RM117.2 million in 2013.

The Public Bank Group remains committed to expand its presence in the region through organic growth. As at the end of 2013, the Group has 124 overseas branches, with 83 branches in Hong Kong, 3 branches in Shenzhen in the People’s Republic of China, 25 branches in Cambodia, 7 branches in Vietnam, 4 branches in Laos and 2 branches in Sri Lanka.

Sustaining Growth in Fee-based Income

The Public Bank Group continued to focus its efforts to increase fee income from unit trust, bancassurance, foreign-exchange related transactions and transactional banking services.

“The Group’s unit trust management business through its wholly-owned subsidiary, Public Mutual, recorded commendable performance with a 14.5% growth in pre-tax profit in 2013. Public Mutual remained the market leader in the private unit trust industry with 104 funds under its management. Total assets under management rose by 14.5% to RM62.5 billion, capturing 41.2% of the overall market share as at the end of 2013, with 59.5% and 53.2% market share in the equity and Islamic unit trust fund sectors respectively.” Tan Sri Teh commented.

The Public Bank Group’s strategic bancassurance partnership continued with AIA Group Ltd (“AIA”) following the acquisition by AIA of the ING’s insurance operations in Malaysia. The bancassurance partnership has proven to be successful as it enables the Group to provide life, health and investment-linked insurance products to its large customer pool in Malaysia and Hong Kong. In 2013, the Group achieved sales of bancassurance products, measured in terms of Annualised Premium Equivalent of RM121.1 million.

Healthy Capital Position

The Public Bank Group’s capital position remained healthy, with common equity Tier 1 capital ratio, Tier 1 capital ratio and total capital ratio standing at 8.8%, 10.5% and 13.8% respectively as at the end of 2013.

Tan Sri Teh emphasised that, “Public Bank will continue to proactively manage its capital to ensure an optimum level of capital to support the Group’s business growth whilst maximising its shareholder value and balancing the need for higher capital retention as required by the Basel III standards.”

Superior Returns to Shareholders

The Public Bank Group has consistently delivered superior returns to its shareholders, both over the medium term and long term.

Tan Sri Teh commented, “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 and had not sold any of the Public Bank shares, he would have 135,398 Public Bank shares worth RM2.6 million based on the current share price of Public Bank (Local) shares of RM19.16. In addition, he would have received total gross dividends of RM914,243. This translates into a total value of RM3.5 million representing remarkable compounded annual rate of return of 19.6% for each of the 46 years since 1967.

Over the medium-term of 5 years since the end of 2008, a Public Bank shareholder would have enjoyed a total return of 159.5% or a compounded annual return of 21.0% for each of the last 5 years.”

Outstanding KPIs

Tan Sri Teh added that, “The Group continued to be in the forefront amongst its banking peers in Malaysia, achieving the highest net return on equity of 22.4% while maintaining the lowest gross impaired loans ratio of 0.7% and lowest cost to income ratio of 30.7%.”

Corporate Responsibility

In support of environment sustainability, the Public Bank Group adopted the “green” concept in the construction of Public Mutual’s new head office building in Kuala Lumpur, which incorporates a host of green features in the design and layout of the building.

Other key corporate responsibilities initiatives undertaken include providing continued financial assistance to the IJN Foundation for the set up of a dormitory to house families of needy patients undergoing treatment at Institute Jantung Negara, the continued support of the Universiti Tunku Abdul Rahman in its research studies in the field of banking and finance and contributions focused in the area of healthcare, education, professional development and community activities.

Tan Sri Teh said, “The Public Bank Group will continue to channel funding to assist the development and growth of SMEs and micro enterprises. The Group also actively participated in BNM’s initiatives and financing schemes to promote SME activities. As a result of its strong profitability track record, the Group is a major contributor to the fiscal revenue of the country with tax payments totalling RM4.8 billion for the past 5 years.”

An Award Winning Bank

Tan Sri Teh highlighted that, “In 2013, the Public Bank Group was accorded numerous awards and recognition of excellence by reputable domestic and international publications and independent organisations.” The awards received include:

• Best Bank in Malaysia by FinanceAsia (15th time)

• Best Bank in Malaysia by Alpha Southeast Asia (7th time)

• Domestic Retail Bank of the Year - Malaysia by Asian Banking and Finance (5th time)

• Best Domestic Bank in Malaysia by The Asset (12th time)

Tan Sri Teh further added, “Public Mutual won 10 awards at The Edge-Lipper Malaysia Fund Awards 2014. This is the 11th consecutive year that Public Mutual has won the most awards at this prestigious annual event.”

Corporate Governance Awards

Tan Sri Teh said, “The Public Bank Group’s pursuit of excellence in good corporate governance continued to be validated by reputable domestic and international publications and independent organisations.”

Public Bank was awarded the Corporate Governance Asia’s 3rd Asian Excellence Recognition Awards 2013 for Best Corporate Social Responsibility and Best Investor Relations by a Malaysian company and the Corporate Governance Asia Recognition Award 2013. Public Bank was also awarded The Asset Platinum Corporate Award 2013 for All-Round Excellence in Financial Performance, Management, Corporate Governance, Social Responsibility, Environmental Responsibility and Investor Relations as well as Minority Shareholder Watchdog Group’s Malaysia-ASEAN Corporate Governance Index 2013 Awards for Top Five Overall Corporate Governance and Industry Excellence - Financials.

Outlook

On strategic directions for the Public Bank Group, Tan Sri Teh commented that, “The Public Bank Group will continue to focus on its core retail banking and financing business and uphold prudent credit policies as well as strong corporate governance to support long term sustainable growth. The Group is expected to maintain its earnings momentum and record satisfactory performance in 2014.”

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

The Public Bank's Board of Directors at the Bank's 48th Annual General Meeting

Due to overwhelming response by customers, ‘PB Super FD Rates’ campaign is back to reward our loyal customers. The campaign is open to all new and existing Public Bank individual customers from 28 January to 30 June 2014.

The campaign is suitable for customers who are looking for long-term FD placement with higher step-up interest and yet receive regular monthly interest payment.

The ‘PB Super FD Rates’ campaign offers step-up fixed deposit rates to as high as 8.88% p.a. to individual customers. To participate in the campaign, individual customers are required to place a minimum of RM30,000 fresh funds. From the total placement amount, 80% would be placed under 1-Month PLUS

Fixed Deposit (PLUS FD) auto-renewable for 12 consecutive months at a step-up rate whilst 20% of the funds would be deposited into the PLUS Savings Account earning interest at the current prevailing rate. Each individual customer is allowed to place up to a maximum of RM3 million under the campaign.

This campaign also provides customers the flexibility to withdraw the fixed deposit at any time and customers are still entitled to the prevailing 1-month PLUS FD counter rate without any penalty. With this flexibility, customers will save with Public Bank to grow their monies while having a peace of mind in case they require the funds urgently before the end of the 12-month period.

The above campaign is a continuous effort by the Bank to enable customers to enjoy more benefits while saving with the Bank.

To find out more about this Campaign, customers are invited to meet our customer service representatives at any of our branches, log on to Public Bank’s website at www.pbebank.com or call toll-free line at 1-800-22-9999 during normal working hours. Terms and conditions apply.

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