PUBLIC BANK shares hit record on results

Public Bank Bhd, Malaysia’s most- profitable bank by return-on-equity, rose to a record in Kuala Lumpur trading after reporting a 20 percent jump in second- quarter earnings.

Shares of the bank climbed 1 percent to RM12.22 at 4:08 p.m. local time, outpacing a 0.3 percent gain in the country’s benchmark index. Net income for the three months ended June 30 grew to RM734.1 million ($228.7 million), or 21 sen a share, from RM610.7 million, or 17.7 sen, a year earlier, according to a statement.

“We expect that the first-half performance will carry forward into the second half given the very stable interest rate conditions, as well as the strong loans approval in the first half of this year,” Chief Operating Officer Leong Kwok Nyem told reporters in Kuala Lumpur today.

Malaysia’s central bank raised interest rates for a third time this year on July 8, judging the economy is strong enough to withstand higher borrowing costs even as threats to the global rebound grow. It is unlikely to raise rates again this year, Public Bank Managing Director Tay Ah Lek said.


The latest 25 basis point increase in the central bank’s key overnight policy rate should further help Public Bank’s net interest margins, Chairman Teh Hong Piow said today, because of a time-lag in changing deposit rates.

Economic Recovery

Net interest income at the country’s third-largest lender by market value climbed 16 percent to RM1.1 billion from a year earlier on higher lending as Southeast Asia’s third-largest economy bounced back from recession, the company said.

Revenue climbed 14 percent to RM2.7 billion from a year ago, the bank said. Other operating income rose 9 percent to RM400.2 million, mainly driven by improved revenue from its unit trust and stock-broking businesses, as well as a higher foreign exchange profit. Provisions for bad debts fell 3.1 percent, it said.

The bank proposed a gross interim dividend of 25 sen a share, down from 30 sen a year ago.

Public Bank is the ninth-best performing stock this year in the 30-member FTSE Bursa Malaysia KLCI Index. Its earnings announcement was made during the midday break. - Bloomberg