Published October 15, 2008
Public Bank posts 25% rise in 9-month profit
By PAULINE NG IN KUALA LUMPUR

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IN THE midst of the global financial crisis, Malaysia's Public Bank yesterday announced a 25 per cent increase in group net profit to RM1.93 billion (S$814 million) for the nine months to end-September.
The strong performance was on the back of healthy growth in asset quality, loans, customer deposits and regional operations.
Operating profit was 20 per cent higher, as net interest and financial income rose. Total assets grew almost RM17 billion, or 9.5 per cent, to RM191 billion. And customer deposits rose RM17 billion to RM156 billion.
Asset quality also improved. The bank's net non-performing loan ratio fell to 0.87 per cent - a third of the industry average of 2.5 per cent. At the same time, its loan loss coverage of 159 per cent was twice the industry's ratio of 83 per cent.
Net earnings per share of 57.4 sen were ahead of a consensus forecast of 71 sen for the full year.
On a quarterly basis, however, group pre-tax profit grew only 1.6 per cent to RM804 million from RM791 million. Net profit attributable to equity holders was 3.8 per cent or RM23 million higher.
But a banking analyst said: 'I don't think anyone cares about results, though they likely exceeded forecasts. The question is next year.'
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Public Bank's 2009 earnings are seen as flat. 'The issue today is valuations. Every bank has been de-rated, except Public, which has only recently started to 'crack',' the analyst said of the resilience in the bank's share price, which is down a relatively modest 25 per cent from a 52-week high amid larger losses by rivals.
The Malaysian economy is expected to soften in the last quarter of this year and in 2009, bank chairman Teh Hong Piow said in a statement accompanying yesterday's results. But barring unforeseen circumstances, the bank will maintain earnings momentum for the rest of this year, he said. 'The group will remain focused on its strategy of building sustainable business growth, while exercising prudent risk management and maintaining strong asset quality in its domestic and overseas operations.'
Public Bank's many long-term investors are likely to take heart from the nine-month report. The bank, now Malaysia's biggest in terms of market capitalisation, said that loans and advances grew an annualised 22 per cent to RM118 billion, with residential property, vehicle and mid-market commercial sectors accounting for 87 per cent of total loans.
Core customer deposits grew an annualised 14 per cent or three times the industry average of 4.5 per cent. Pre-tax profit from regional operations grew 11 per cent, with more than 90 per cent of it coming from Hong Kong and Cambodia.
Even the bank's unit trust and fund management business, carried out through subsidiary Public Mutual, recorded a 19 per cent increase in pre-tax profit to RM137 million. Unit trust management fees increased 33 per cent to RM262 million but were off-set by increasing redemptions.