Public Bank net profits up 8.7% in 2023; 10 sen interim dividend proposed

Total dividend is 19 sen per share for 2023, to be paid out on 22 March.

Malaysia’s Public Bank saw its net profit rise by 8.7% to RM6.65b in 2023, thanks to loan and deposit growth and higher non-interest income.

The bank’s board has recommended a second interim dividend of 10 sen per share, for a total dividend of 19 sen per share for 2023. This equates to a total dividend payout of RM3.69b, or 55.5% of the group’s net profit during the year.

The dividend will be paid on 22 March 2024.

A 5.9% loan growth and a 4.6% deposit growth was reported in 2023. Domestic loans stood at RM372.7b, thanks to a 6.4% growth in residential loans and a 10.8% growth in hire purchase financing.

Total newly approved domestic loans increased by 26.5% in 2023 as compared with 2022, Public Bank added.

Net interest margin averaged 2.2% during the year, contributing to a net interest and financing income of RM10.53b.

Non-interest income rose by 2.6%, thanks to higher income from Public Bank’s unit trust, foreign exchange, and stockbrokering business.

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Cost-to-income ratio stood at 33.7% in 2023, better than the domestic banking industry’s average ratio of 48.3%. 

Gross impaired loans ratio is 0.59%, and loan loss allowances were lower by 57.1% compared to 2022. Loan loss coverage ratio is 181.8% as of end-2023.

Overseas businesses, mainly from Indochina operations, contributed 5.9% of Public Bank’s profit. Notably, Cambodian Public Bank (Campu Bank) and Public Bank Vietnam were the standouts in 2023 as the main profit contributors.

In contrast, the bank’s Hong Kong business continued to grapple with a challenging operating environment, which weighed on its growth, the bank said in a press release. 

Looking ahead, CEO Tan Sri Tay expects 2024 to be “another year of challenge.”

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“2024 is likely to be another year of challenges. However, given the domestic banks’ strong fundamentals with healthy capital and liquidity buffers, coupled with the sufficient pre-emptive provisioning and prudent coverage ratios, the banking sector will remain resilient in navigating any headwinds,” he said.

Public Bank Group, meanwhile, aims to continue growing its core retail and commercial banking businesses, whilst strengthening commitments in the areas of environmental, social, and governance (ESG), he said.