PETALING JAYA: Public Bank Group reported a pre-tax profit of RM2.32 billion and net profit attributable to shareholders of RM1.75 billion for the first quarter ended March 31, 2026 (Q1’26), increasing by 0.1% and 0.4% respectively compared to Q1’25.
Profit was supported by continued expansion in the loan and deposit portfolios, which grew at an annualised rate of 5.7% and 5.3% respectively, complemented by non-interest and non-financing income, which expanded by 3.7%.
The group continued to maintain sound asset quality, with a low gross impaired-loan ratio of 0.51%. Domestically, the gross impaired loans ratio was lower at 0.35%, significantly better than the industry’s 1.40%.
Loan provisions remained prudently managed, with the loan loss coverage ratio standing at 147% and 251.2% when regulatory reserves are taken into account.
Managing director and CEO Tan Sri Dr Tay Ah Lek said the banking group’s latest financial performance remained supported by its strong fundamentals.
“Asset quality stayed resilient, and the balance sheet remained solid, underpinned by strong capital and liquidity positions. The group continued to sustain its leading position in the domestic banking industry, with a commendable net return on equity of 12%, the most efficient cost-income ratio of 35.5% and the best asset quality with gross impaired loans ratio of 0.51%,” he said.
Public Bank posted total loans of RM452.1 billion as at the end of March 2026, with 5.7% annualised loan growth for Q1’26.
On the domestic front, loans grew by an annualised rate of 6.3% to RM427.7 billion. The group maintained its strong presence in key retail consumer and SME financing segments.
Domestic SME financing, residential properties financing, and hire purchase financing achieved annualised growth of 11.2%, 4.4% and 8.4%, respectively. These key segments continued to command strong leading market shares of 19%, 20.1%, and 33.1% respectively.
On the funding side, total customer deposits grew in line with loan growth, registering an annualised growth rate of 5.3% to RM453.1 billion.
Meanwhile, Public Bank’s domestic customer deposits increased at an annualised rate of 5.1% to RM424.4 billion, led mainly by core deposits and money market deposits.
The group posted non-interest and non-financing income of RM825.9 million for the first three months of 2026, up 3.7% from Q1’25, mainly due to higher income from unit trusts, general insurance and bancassurance.
Public Mutual, a wholly owned unit trust company of the group, generated a first-quarter pre-tax profit of RM216.5 million. This represents a 4.1% increase compared with the previous corresponding period and constituted 9.3% of the group’s pre-tax profit.
Supporting this performance was its market-leading position, with a retail market share of 43.2% in the domestic retail private unit trust industry (excluding money market funds) and RM103.8 billion in net asset value of funds under management across 185 unit trust funds as at end-March.
The group’s capital position remained well-capitalised with Common Equity Tier 1 capital ratio, Tier 1 capital ratio, and total capital ratio standing at 13.7%, 13.7%, and 16.4%, respectively, as at the end of March.
This has not taken into account the potential 1% surplus arising from the Basel III reforms. The group plans to return the available surplus to shareholders in the next three years.
On liquidity, the group’s deposit franchise continued to support a healthy liquidity and funding position, as reflected by the gross loan-to-fund and equity ratio of 84.2% as at end-March 2026.
Given the ongoing conflict in the Middle East, Public Bank is cognisant of its potential impact on people and the economy. In light of the unprecedented headwind, the group is mindful that individuals and businesses may face difficulties repaying their loans and financing.
Tay said Public Bank is strongly committed to assisting customers affected by the conflict. “The banking group has been closely monitoring the latest developments and is ready to fully support customer needs.”
For 2026, the bank expects global economic growth to remain uneven across regions amid significant headwinds.
Risks are tilted to the downside, arising from uncertainty over trade tariffs, geopolitical tensions in the Middle East and concerns over financial market valuations.
However, supportive macroeconomic policies, as well as ongoing investments in technology and digitalisation, will continue to underpin global economic growth.
On the domestic front, while external headwinds will continue to pose a challenge for the Malaysian economy, growth is likely to remain on a positive trajectory, albeit at a more moderate pace.
Resilient domestic demand, ongoing investment expansion, stable external demand and tourism activity will continue to support the domestic economy.
Against this backdrop, Public Bank Group is in a strong position to weather the challenges, leveraging its long-standing solid fundamentals and prudent management. Nonetheless, as the group stays vigilant, it will remain agile and forward-looking in pursuit of synergistic business growth, Tay said.
