Public Bank first quarter net profit up by 16pc
Filed Under (Business News) by Webmaster on 16-04-2010
Tagged Under : Public Bank
The country’s third largest banking group, Public Bank Bhd (1295), chalked up a 16 per cent increase in first quarter net profit, helped by stronger income from loans as the economy improved.
Net profit came in at RM685.3 million compared with RM589.3 million in the same period a year earlier. Revenue improved 3 per cent to RM2.5 billion.
Analysts said the results were within expectations. They expect the group to do better in the next three quarters, pointing out that the first quarter has always tended to be the weakest.
“The group will continue to pursue its strategy of strong organic business growth, maintaining its superior quality loan portfolio, expand its fee-based income and further improve its productivity,” chairman Tan Sri Teh Hong Piow said in a press statement yesterday.
He said said the group was on track to achieving a targeted loan growth rate of 15 per cent this year against growth of 14.4 per cent last year.
Analyst Chris Oh of JPMorgan, however, believes the group may once again outperform expectations in this area. The bank has long been a favourite of investors for its above-industry growth and asset quality.
“While the industry’s loan growth may range between 10 per cent and 15 per cent this year, I think Public Bank can achieve 15-20 per cent,” Oh said.
The group’s annualised net return on equity (ROE) in the first quarter was strong at 25.3 per cent.
Net interest and financing income was up 15 per cent to RM1.276 billion.
Non-interest income rose 32 per cent to RM386.9 million, driven by higher revenue from its unit trust and stockbroking businesses. Loan impairment allowances fell 11 per cent.
Total loans and advances increased 3.5 per cent to RM142.4 billion, driven by strong domestic loan growth of 4.4 per cent.
OSK Research analyst Keith Wee upgraded the bank to a “buy” from “neutral” and raised his target price to RM13 from RM11.80, saying that the group was on track to meeting its strong profit targets.
The stock closed at RM12.04 yesterday.
“More intensive capital usage and greater focus on a capital-light high ROE (and) high fee income stream are expected to help sustain the group’s robust profit generation trend,” Wee said in a report yesterday morning.
