PETALING JAYA: Public Bank Bhd has proposed to declare a second interim dividend of 37 sen for the fourth quarter ended Dec 31, 2018 despite its net profit declining 5.4% to RM1.41 billion against RM1.49 billion in the previous corresponding period.
Revenue for the quarter, however, grew 5.3% to RM5.63 billion from RM5.35 billion.
Together with the first interim dividend of 32 sen per share, the bank’s full-year dividend for 2018 amounts to 69 sen or a total dividend payout of RM2.7 billion, representing 47.9% of its net profit for 2018.
Public Bank’s full-year net profit rose 2.2% to RM5.59 billion from RM5.47 billion a year ago on the back of a 5.7% increase in revenue to RM22.04 billion from RM20.86 billion.
“2018 was marked by a more moderate economic growth, with increased head-winds on both global and domestic fronts and banks were faced with a more challenging business climate. Against this backdrop, the Public Bank group was able to sustain stable profitability due to its continuous efforts to drive its loans and deposits business, coupled with the group’s strong asset quality and prudent cost management,” said Public Bank founder Tan Sri Teh Hong Piow (pix).
The bank achieved 4.2% loan growth in 2018 and its lending strategy remained focused on consumer financing for the purchase of residential properties and passenger vehicles, as well as extension of credit to small and medium enterprises for purchase of commercial properties and working capital.
Its total customer deposits achieved growth of 6.2% to RM339.2 billion in 2018. The deposit growth contributed to the group’s strong funding position, as reflected in its gross loan to fund and equity ratio of 79.0% as at the end of 2018.
Public Bank continued to maintain a low gross impaired loans ratio of 0.5%, well below the domestic banking system’s gross impaired loans ratio of 1.5%.
“Further, the Public Bank group’s loan loss coverage ratio stood high at 126.0% as at the end of 2018. Including the RM1.8 billion regulatory reserves that the group had set aside, the group’s loan loss coverage ratio would be 237.5%. This has provided the group a strong buffer to weather any uncertainties ahead,” said Teh.
After the payment of the second interim dividend, the group’s common equity Tier 1 capital ratio, Tier 1 capital ratio and total capital ratio will stand at 13.1%, 13.7% and 16.3% respectively.
In 2018, Public Bank’s overseas operations contributed 9.7% to the group’s overall pre-tax profit, largely contributed by Public Financial Holdings td Group in Hong Kong and Cambodian Public Bank Plc.
Looking ahead, Public Bank expects the overall outlook for the domestic banking sector to remain stable underpinned by resilient private sector activity.
“There will be continued growth opportunities for the domestic banking industry underscored by ongoing demand for affordable housing and the growing small and medium enterprises,” said Teh.
Public Bank’s share price gained 6 sen or 0.24% to close at RM25.06 today on 4,402,500 shares done.
