Tuesday October 18, 2011
Public Bank beats estimates Q3 net profit 15% higher to RM899mil
PETALING JAYA: Public Bank Bhd raked in slightly better-than-expected earnings on strong revenue growth, cost efficiency and good asset quality, which contributed to the improvement in credit charges during the third quarter ended Sept 30, 2011.
The banking group saw its third-quarter net profit for financial year 2011 grow 14.8% to RM898.79mil, compared with RM782.7mil for the corresponding period last year, while revenue grew 13.7% to RM3.27bil from RM2.88bil previously. Earnings per share rose to 25.7 sen for the quarter from 22.3 sen previously.
“The outlook of the Malaysian banking sector, in which the group largely operates in, continues to be stable and supportive of growth. We continue to see the group’s business performance to be in line with expectations and on track in meeting the key business targets for 2011,” said Public Bank chairman Tan Sri Teh Hong Piow in a statement yesterday.
While Public Bank managed to post a strong performance on an annual basis, some analysts noted that there were already indications that growth momentum for the bank had moderated since the third quarter of this year.
“Looking at the present trend, it is pretty clear that growth will continue to slow down even more into the fourth quarter,” MIDF Research banking analyst Calvin Ong said.
Another analyst from a local research house, however, said Public Bank could benefit from a potential pickup in lending activities in a still-strong local economic environment in the fourth quarter and would likely gain from the spillover effects from the Economic Transformation Programme initiatives.
For the nine-month period, Public Bank’s net profit grew 20.9% to RM2.61bil on revenue of RM9.43bil, compared with a net profit of RM2.2bil on revenue of RM8.06bil for the same period last year.
The group managed to sustain its market leadership in domestic lending for residential mortgages, commercial property financing and passenger vehicles financing with market shares of 18.0%, 33.7% and 25.7%, respectively. Its lending remained focused on the retail sector, with loans to mid-market commercial enterprises as well as loans for the financing of residential properties and purchase of passenger vehicles accounting for 85% of the total loan portfolio of the group as at the end of September 2011.
The group’s residential properties and passenger vehicles financing grew at annualised rates of 17.7% and 9.7% respectively for the first nine months, which outperformed the growth rates of the industry of 12.5% and 6.7% respectively.
The Public Bank group’s funding position remained robust supported by its strong retail franchise and large domestic depositor base of over 4.5 million customers.
Gross loans book stood at RM172.7bil, recording a growth of 13.8% on an annualised basis. Domestic loans growth remained strong with an annualised growth rate of 14.1%. Over the same period, total customer deposits grew by an annualised rate of 12.7% to RM193.7bil, while domestic customer deposits grew at a stronger 13.8%.
Domestic customer deposits grew at an annualised rate of 13.8%, compared with the domestic banking industry’s annualised growth of 9.8%. This was mainly attributed to steady inflows of fixed and savings deposits, which grew at annualised rates of 12.2% and 11.9% respectively, outperforming the Malaysian banking industry’s annualised 9.5% growth in fixed deposits and 9.1% growth in savings deposits.
For the nine months, Public Bank’s overseas operations contributed 6.5% of the group’s overall pre-tax profit, compared with 7.6% contribution in 2010 due to the negative effect of foreign exchange differences.