Public Bank achieves 22% pre-tax profit growth

The Public Bank achieved a pre-tax profit of US$958.6 million for the first nine months of 2010. The figure represents a 22 per cent growth from the corresponding period in 2009. Over the same period, the Group recorded a net profit of US$712.5 million, 20 per cent higher as compared to US$595.5 million achieved in the corresponding period in 2009.

On a quarterly basis, the Public Bank Group surpassed the US$323.8 million mark for the first time by recording a pre-tax profit of US$340 million in the third quarter of 2010. This represents a strong growth of 7 per cent as compared to the pre-tax profit of US$318 million in the second quarter of 2010.

The improved profit performance of the Public Bank Group for the first nine months of 2010 was mainly attributed to the strong growth in net interest and finance income and higher non-interest income.

The three increases in the Overnight Policy Rate in 2010 totaling 0.75 per cent translated into an improvement to the Public Bank Group’s net interest margin. The improved net interest margin, coupled with the strong organic growth in loans and core customer deposits, led to the Group’s net interest and finance income improving by US$170 million or 15 per cent in the first nine months of 2010 as compared to the corresponding period in 2009.
Non-interest income of the Public Bank Group also recorded a commendable growth of 18 per cent as compared to the corresponding period in 2009, mainly driven by the increase in fee income generated from the Group’s unit trust management and foreign exchange businesses.

In tandem with the improved economic conditions in the country, the Public Bank Group recorded a strong increase in total loans and advances of US$4.56 billion, a 10.3 per cent growth for the first nine months of 2010 or a 13.7 per cent annualised growth rate, to reach US$49.1 billion at the end of September 2010. In particular, domestic loans grew at a stronger annualised rate of 16.1 per cent.

The lending activities of the Public Bank Group remained focused on the retail sector, particularly in loans to mid-market commercial enterprises as well as loans for the financing of residential properties and the purchase of passenger vehicles, which accounted for 78 per cent of the total loan portfolio of the Group as at the end of September 2010.

In the first nine months of 2010, the Public Bank Group’s loan growth indicators remain robust with domestic retail loan approvals increasing by 9 per cent as compared to the corresponding period of 2009. In particular, domestic loan approvals for hire purchase grew at an impressive rate of 17 per cent. Over the same period, the total loan applications received by the Group increased by 16 per cent as compared to the corresponding period a year ago.
For the first nine months of 2010, the Public Bank Group continued its strong support of the Government’s effort to promote small- and medium-sized enterprise activities with the approval of US$2.5 billion of loans to domestic SMEs, accounting for more than 20 per cent of the Group's total domestic loans approved of US$12.3 billion in the same period.