KUALA LUMPUR: Public Bank Bhd has declared an interim dividend of 30 sen per share, thanks to higher earnings driven by the group’s above industry average loan growth.
The banking group announced that its net profit rose 9% to RM992.4 million, or 28.34 sen per share, for the fourth quarter ended Dec 31, 2012 (4QFY12), from RM913.3 million, or 26.08 sen per share, in the previous corresponding quarter.
Revenue was higher at RM3.63 billion during the quarter against RM3.32 billion a year ago amid higher interest income and non-interest income.
“The improved earnings were mainly due to higher net interest income and lower loan impairment charges resulting from strong loan and deposits growth and stable asset quality, higher net fee and commission income partially offset by higher other operating expenses,” Public Bank said.
The banking group had registered a RM5.34 million impairment on its assets in 4QFY12 compared to a write-back of RM563,000 a year earlier.
For the full FY12, Public Bank’s accumulated net profit rose 5% to RM3.87 billion from RM3.68 billion the year before. Revenue was up 10% to RM14.06 billion against RM12.76 billion for FY11.
The single-tier dividend of 30 sen per share for the quarter has brought the group’s total payout to 50 sen per share for FY12. This translates into a total payout ratio of 45% of its net profit for FY12.
During the year, the lender said it posted an 11.3% growth in total loans of which domestic credit facilities expanded at a faster rate of 12.5% compared with the domestic banking industry’s growth of 10.4%.
Public Bank said its overseas operations contributed 6.4% to its total pre-tax profit. Cambodian Public Bank Plc , a wholly owned subsidiary of Public Bank, posted a 22.2% growth in pre-tax profit from RM88.9 million in 2011 to RM108.5 million in 2012 and remains as one of the top three largest banks in Cambodia, the group said.
Looking ahead, Public Bank said it expected to sustain its strong market position within the domestic retail loan segment. And this would be helped by growth in consumer, and small and medium enterprises (SME) credit
The group sees opportunities in residential property loans amid policymakers’ initiatives to increase home ownership especially in suburban areas.
Attractive offers and incentives from property developers are also expected to generate demand for real estate and mortgage facilities, the bank said.
“Despite intense competition, the Public Bank group is expected to sustain its residential property financing segment growth given its focus on home mortgages for owner occupation and the broader base mass market segment which are expected to maintain healthy growth,” it said.
In a separate statement, Public Bank founder and chairman Tan Sri Teh Hong Piow said lending to the retail segment would continue to the main strategic focus of the group with emphasis on SME, residential properties, and passenger vehicles.
As at end 2012, the group’s retail loan portfolio made up 85.9% of the bank’s total loans.
“Our strategies remain unchanged. The Public Bank group will continue to focus on its core retail banking and financing business, while maintaining its prudent credit policies, as well as upholding strong corporate governance to support long-term sustainable growth.
“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 deliver continuous revenue growth. The group is expected to maintain its earnings momentum and record satisfactory performance in 2013,” said Teh.
This article first appeared in The Edge Financial Daily, on February 7, 2013.