Public Bank’s net profits down 3.5% to $351.94m in Q1

Total loans and deposits grew in Q1 compared to Q4 2023.

Malaysia’s Public Bank saw their net profits rise 2.3% to $351.94m (RM1.65b) in Q1 compared to Q4 2023, according to its latest financial results update.

Compared to Q1 2023, net profit was 3.5% lower, which Public Bank blamed on “the non-recurrence of the positive impact of OPR hikes in the previous corresponding period.”

Pre-tax profit grew 3.1% to $454.33m (RM2.13b) compared to the previous quarter.

Total loans and deposits recorded annualised growth rates of 6.3% and 7.1%, respectively. This comes as newly-approved domestic loans rose by 10.2% compared to Q1 2023. Notably, loans for hire purchases and SMEs rose by 27.2% and 11%, respectively, over the same period.

Domestic loans notably grew by 5.9% to $80.67m (RM378.2b), outpacing the Malaysian banking industry’s average loan growth of 5.3%.

This was reportedly thanks to Public Bank’s residential properties financing, hire purchase financing and commercial properties financing expanding by an annualised rate of 5.6%, 17.3% and 4%, respectively. 

Deposits rose 7.1% (RM420.2b; $89.62m), and domestically by 7.3% (RM391.9b; $83.59m), supported by stable inflows of core deposits, Public Bank said. 

Non-interest income inched up by 0.5% to $158.6m (RM649.6m). The group’s wholly owned subsidiary managing its unit trust business, Public Mutual, remained the main contributor to its non-interest income.

Public Mutual recorded an 11.4% growth in pre-tax profit to $45.77m (RM214.6m) in Q1 compared to the same period in 2023. This is equal to 10.1% of Public Bank Group’s pre-tax profit.

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Looking ahead, Public Bank named Indochina as its key focus area for overseas business expansion, and shared plans for branch expansions for its new wholly owned subsidiary Public Bank Lao.

Malaysia’s economy, meanwhile, will enjoy a stable employment market and overall improvement in domestic demand. Tourism activity is also expected to ramp up.

There is also ongoing implementation of multi-year investment and infrastructure projects are expected to further propel the domestic economy, Public Bank said.  

In contrast, the bank warned of a challenging operating environment and subdued property market conditions in Hong Kong, which it said would weigh on its business in the city.

There are also the risks of weaker-than-expected global demand, geopolitical conflicts and volatility in global financial markets. 

“Against this backdrop, the Public Bank Group will remain vigilant in its business approach and will continue to maintain its prudent risk profile to weather ongoing risks,” said Tan Sri Dato’ Sri Dr. Tay Ah Lek, managing drector and CEO of Public Bank.

“Tapping on the improved economic outlook, the group will continue to take a proactive approach to embracing growth opportunities. The group will also continue to pursue digital transformation and further step up its ESG efforts to remain relevant in today’s dynamic business environment,” he added.

(US$1 = RM4.69 [Malaysian ringgit])