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RETAIL BANKING | Staff Reporter, Malaysia

Public Bank's net profit up 1.5% to US$284m in 1QFY17

But the bank posted negative JAWS.

There was not much that stood out in Public Bank’s 1QFY17 results, which were generally within expectations, according to Maybank Kim Eng.

"We estimate the potential for a 1.4-for-1 bonus issue, should it decide to distribute its share premium account, which would be a positive. That aside, with pedestrian earnings growth of about 3-4% in FY17 and FY18, we expect ROAEs to slip to 14% in FY18 from 14.8% in FY17."

Here's more from Maybank Kim Eng:

Public Bank’s results were within expectations, with its 1QFY17 net profit of MYR1.25b (US$284m) (+1.5% YoY, -12.3% QoQ) making up 24% of our fullyear forecast and consensus.

Positively, loan growth of 7% YoY is tracking management’s expectations, while NIM continues to hold up well. That NOII contracted 13% YoY was to be expected, given the exceptionally high forex income in 1Q16. On the flip side, the group continues to experience negative JAWS, with expense growth of 12% YoY.

On an absolute basis, group gross impaired loans were stable but segmentally, GIL in commercial property and personal financing continued to rise sequentially. Credit cost was benign at 9bps while loan loss coverage remains very comfortable at 234%, including regulatory reserves.

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