[ad_1]
KUALA LUMPUR: Public Bank posted a net profit of RM1.39bil in the third quarter ended September 30, 2020, a slight increase of 2.2% from RM1.36bil a year ago, supported by higher investment income, securities brokerage, fund management and banking Islamic.
It reported on Friday, while its revenue fell 8.5% to RM5.13bil from RM5.61bil, its profit before tax increased by 2.3% to RM1.80bil from RM1.76bil a year ago.
Its net profit increased mainly due to higher investment income of RM102.9 thousand and also higher net income from commissions and commissions of RM89.1 thousand due to higher income from securities brokerage and fund management.
Public Bank also posted higher Islamic banking income of RM63.6k, higher net interest income of RM48k and other higher operating income of RM25.2k.
“These were partially offset by a higher loan impairment reserve of RM285.4k in anticipation of the potential effect of the Covid-19 pandemic,” he said.
Public Bank said its retail operations posted an 8% increase in pre-tax profit of RM1.01 billion primarily due to higher net interest income, higher fees and other income, partially offset by a higher impairment reserve. of loans in anticipation of the potential effect of the Covid -19 pandemic.
Regarding its installment purchase business, profit before tax increased 1.4% to RM 83.9 thousand mainly due to a lower reserve for loan impairment and lower other operating expenses, partially offset by lower net interest income.
The group’s other comprehensive income (net) for the current quarter was RM39.7 million compared to other comprehensive income (net) of RM119.7 million a year ago mainly due to the loss on conversion of foreign currency with respect to foreign operations.
Pre-tax profit on its corporate loans fell 76.% to RM35.5 thousand mainly due to a higher loan impairment reserve in anticipation of the potential effect of the Covid-19 pandemic, partially offset by higher net interest income.
Treasury and capital market operations recorded an 88.4% increase in earnings before tax of RM146.5 thousand mainly due to higher net interest income and higher investment income.
Regarding its investment banking, pre-tax earnings increased 318% to RM38.4k mainly due to higher income from securities brokerage derived from higher turnover in the stock market.
Public Bank said its fund management business reported a pre-tax profit of RM191.2 thousand, an increase of 15.8% primarily due to a higher management fee due to a higher average net asset value of the funds under management and a higher rate on the sale of trust units arising from higher equity sales achieved.
Reported that its head office, financing center and others reported a profit before tax of RM149.3 thousand, an increase of 3.2% mainly due to higher investment income and lower other operating expenses, partially offset by lower net interest income .
However, its foreign operations reported earnings before tax decreased by 28% to RM146.5 thousand mainly due to a higher reserve for loan impairment and lower net interest income due to a lower net interest margin, partially offset by higher earnings.
3T vs 2T
Compared to the second quarter, Public Bank’s pre-tax profit increased 40.8% to RM1.80bil from RM1.28bil. Its net income increased by 39% to RM1.39bil mainly due to the net loss due to the one-time modification of Day One related to the Covid-19 relief measures that amount to RM498.4 thousand recognized in 2Q and a lower negative effect of the OPR reductions in Q3.
Higher net interest income and net income from the Islamic banking business, treasury and capital market operations, its fund management business, and its head office, funding center and others supported higher Q3 earnings compared to Q3. 2T. However, corporate loans and foreign operations posted lower earnings
“Other comprehensive (net) loss for the group for the current quarter was RM39.7 million compared to other comprehensive (net) income of RM423.2 million in the immediately preceding quarter.
“This was mainly due to a lower gain from the revaluation of financial investments, a higher loss from foreign currency translation with respect to foreign operations and loss from remeasurement of defined benefit plans in the current quarter compared to a gain recorded in the previous quarter. These were partially offset by gains on cash flow hedges in the current quarter, ”he said.
Nine-month financial performance
During the nine months, the Public Bank’s net income decreased by 9.3% to RM3.72bil from RM4.10bil in the corresponding prior period. Its revenue decreased 8.3% to RM15.38 billion from RM16.78 billion.
He said the lower gain was mainly due to the moderation in revenue growth that emerged from the Covid-19 pandemic, the effect of the overnight policy rate (OPR) reduction during the year, as well as the net modification loss. One-time RM498mil incurred in the second quarter due to Covid-19 relief measures offered to individuals and businesses.
Tan Sri Teh Hong Piow, Founder, Chairman Emeritus, Director and Advisor to Public Bank, said: “The Covid-19 pandemic continued to pose significant uncertainties for the economic outlook and business environment on all fronts.
“In addition, a total of 125 basis points cut in this year’s OPR and the higher provisions set aside in anticipation of the effect of the Covid-19 pandemic had continued to affect profitability.
“However, as the economy gradually reopened and was supported by the various stimulus and relief measures from the government, the economic environment in the third quarter of 2020 had shown an improvement,” he said.
Public banking posted higher credit growth in Q3 compared to previous quarters. Total loans grew at an annualized rate of 4.8% in the first nine months of 2020.
Domestic loans grew at an annualized rate of 5.6%, higher than the annualized growth of loans for the domestic banking industry of 4.0%. On the financing side, the Group registered an annualized growth rate of 3.9% in both total deposits and national deposits ”.
Non-interest income continued to support the group’s financial performance, with growth of 17.8% in the first nine months of 2020, mainly driven by higher investment income, as well as higher income from the unit trust businesses and bag. Public Mutual continued to be the largest contributor to the group’s non-financial income.
“Despite the various challenges faced in 2020, the group posted a net return on resilient equity of 11.3% in the first nine months of 2020. The cost-income ratio stood at 35.2%, compared to the profitability of the national banking industry. -Income ratio of 44.7% ”.
“Meanwhile, the impaired loan ratio remained low at 0.3%, which was significantly better than the domestic banking industry’s impaired loan ratio of 1.4%. In addition, the Group maintained high loan loss reserves of 209.1%. Including the regulatory reserves of 1.7 billion ringgit that the group had set aside, the total reserves for credit losses were even higher at 362.0%, ”said Teh.
[ad_2]
