PETALING JAYA: For the first quarter ended March 31, 2023, Public Bank Group recorded pre-tax profit growth of 10.4% to RM2.21 billion, compared with the corresponding quarter in 2022.

Net profit grew at a higher rate of 22.6% to RM1.71 billion during the same period, due to the prosperity tax imposed in the previous corresponding period.

Public Bank managing director and CEO Tan Sri Dr Tay Ah Lek commented, “The Public Bank Group continued to navigate through the challenges in the evolving operating environment and demonstrated resilience in its first quarter 2023 performance, which was mainly supported by commendable net interest income growth and lower loan impairment allowances.”

Net interest income increased by 7.4%, mainly led by healthy loans and deposits growth which expanded at an annualised growth rate of 5.0% and 9.1% respectively. Coupled with lower impairment allowances during the quarter, the group sustained a resilient net return on equity of 13.6%.

Despite high inflationary pressure, increase in operating expenses was well under control at 4.7%, underpinned by the group’s prudent cost management. As a result, the group continued to achieve an efficient cost-to-income ratio of 33.1% in the first quarter of 2023.

Asset quality remained stable with a low gross impaired loans ratio of 0.5%. Loan impairment allowances were lower by 98.5% to RM1.5 million from RM99.7 million in the corresponding quarter of 2022.

During the first quarter ended March 2023, the Public Bank Group maintained a healthy loan growth momentum at an annualised growth rate of 5.0% to RM381.6 billion, largely supported by the domestic loan portfolios which grew by an annualised rate of 5.4% to RM356.8 billion.

Domestic loan growth was mainly contributed by residential properties financing, hire purchase financing as well as SME financing, which grew at an annualised rate of 6.1%, 11.5% and 2.7% respectively. This has sustained the group’s leading market share in the residential properties financing, hire purchase financing and domestic SME lending, which stood at 20.6%, 30.4% and 19.0% respectively.

The group’s funding and liquidity position remained healthy, supported by a commendable growth in customer deposits at an annualised rate of 9.1% to RM403.7 billion. Domestic deposits rose by 10.2% on an annualised basis to RM376.5 billion, attributable to the consistent growth in retail deposits.

Reflecting its healthy balance sheet, the Public Bank Group continued to maintain a stable gross loan to fund and equity ratio of 80.4% as at the end of March 2023.

In the first quarter of 2023, the Public Bank Group’s overseas operations contributed 8.1% to the group’s profit, mainly attributed to its Hong Kong and Indochina operations.

Public Bank Vietnam and Cambodian Public Bank continued to deliver strong profit performance, as reflected in the respective double-digit profit growth of 24.5% and 59.8% year-on-year. Indochina will continue to be the group’s key focus growth area, with continued expansion of branch network as well as broadening of products and services. The group is targeting to open another eight new branches in Vietnam to reach a total of 40 branches by year end.

However, the operating environment for the group’s Hong Kong operations remain uncertain and challenging despite the lifting of Covid-19 containment measures.

Tan said, “The Public Bank Group is cognisant of the prevailing challenges and evolving landscape. The group will remain focused on cost discipline, preservation of sound asset quality and upholding strong corporate governance to safeguard its resilience against adversity. Notwithstanding, the group will continue to take a proactive approach in embracing growth opportunities arising from the growing economy, digital transformation as well as the growing ESG demand.”