Public Bank third quarter profit jumps 25%

KUALA LUMPUR: Public Bank Bhd's third-quarter profit jumped 25% as contribution from overseas operations and the performance of its mutual funds grew strongly.

The banking group, which also saw strong growth in net interest income, is projecting to maintain its earnings momentum in its final quarter.

“The group will also continue to expand its overseas operations,'' Public Bank chairman Tan Sri Teh Hong Piow said in a statement yesterday.

“The group targets to increase its fee-based activities, particularly in fund management, bancassurance and other wealth management services, by launching new products to meet the diverse investment needs of the group's customers,'' he said.

Public Bank posted a net profit of RM543.6mil, or 16.21 sen a share, for its third quarter ended Sept 30, compared with RM436.3mil, or 13.16 sen a share, in the previous corresponding quarter.

Revenue rose 15.4% to RM2.41bil against RM2.09bil previously while pre-tax profit improved 27.7% to RM774.4mil from RM606.3mil.

For the nine months ended Sept 30, Public Bank posted a 20.5% growth in net profit to RM1.54bil, or 46.02 sen a share, from RM1.28bil, or 38.74 sen a share, a year earlier.

Revenue rose 26.4% to RM6.98bil from RM5.53bil while pre-tax profit increased 23.5% to RM2.18bil from RM1.77bil.

Public Bank said total loans expanded by an annualised rate of 19%, higher than the 17% experienced in the first half this year.

The cost-to-income ratio fell to 32.2% in the third quarter compared with 34% in second, while net non-performing loans was 1.4% at the end of the third quarter. Loan loss coverage ratio was 112%.

Public Mutual Bhd's total assets under management expanded by 52% from RM16.2bil at end-2006 to RM24.54bil at the end of September. Of that amount, 77% were equity-linked funds.

Public Bank said its market share of the private unit trust industry was 36.4%.

Public Mutual's unit trust management fees and income from the sale of trust units was RM196mil and RM133mil respectively, which were 57% and 214% higher compared with the previous corresponding period.

In the nine months to Sept 30, trust unit sales reached a record RM8.39bil, three times more than the RM2.77bil recorded in the previous corresponding period in 2006 and more than double total sales for the whole of last year.

Loans given by Public Bank remained focused on small and medium-scale enterprises, residential properties and passenger vehicles as these three sectors accounted for 70% of the group's total loan portfolio.

The bank's overseas operations continued to expand rapidly as Public Bank (Hong Kong) Ltd saw loans and deposits grow by 47% and 38% respectively.

The strong loan and deposits growth were backed by a major expansion in the branch network and brand name. Public Bank HK now has 24 branches, an increase of 11 from the 13 branches its acquired in May last year.

In Cambodia, Cambodian Public Bank Ltd registered loan growth of 68% in the nine months to Sept 30, and opened three more branches to bring the total to eight. Public Bank also commenced its insurance operations in Cambodia during the quarter.

In the fourth quarter, Public Bank intends to open five more branches in Hong Kong, one in Shenzhen (China), two in Cambodia, two in Laos and one in Vietnam.