PUBLIC BANK achieves 24% GROWTH IN PRE-TAX PROFIT

PUBLIC BANK ACHIEVES 24% GROWTH IN PRE-TAX PROFIT AND 4.4% DOMESTIC LOAN GROWTH IN FIRST QUARTER OF 2010.

Public Bank Group achieved a commendable start to 2010 with a pre-tax profit of RM923 million for the first quarter of 2010, representing a 24% growth from the corresponding period in 2009. Over the same period, the Group recorded a net profit of RM685 million, 16% higher as compared to RM589 million for the corresponding period in 2009. The Group’s domestic loan base grew strongly by 4.4% in the first quarter of 2010. With the continued pursuit of prudent credit policies and effective credit monitoring, the Group continues to sustain its strong asset quality with its gross impaired loans ratio maintained at below 1%.

The Public Bank Group's results translate into an earnings per share of 19.7 sen for the first quarter of 2010 and an annualised net return on equity of 25.3%.

Highlights of the Public Bank Group's Performance:

• Pre-tax profit of the Group grew by 24% to RM923 million in the first quarter of 2010 as compared to RM745 million in the previous corresponding quarter.

• Net profit attributable to shareholders grew by 16% to RM685 million in the current quarter as compared to RM589 million in the previous corresponding quarter.

• Annualised net return on equity for the first quarter of 2010 stood at 25.3%.

• Earnings per share for the first quarter of 2010 of 19.7 sen was 13% higher as compared to 17.4 sen in the first quarter of 2009.

• Cost-to-income ratio remains efficient at 35.7%.

• Total assets increased to RM219 billion as at the end of March 2010.

• Total loans and advances of the Group grew by RM4.8 billion or 3.5% in thefirst quarter of 2010 to reach RM142.4 billion as at the end of March 2010, driven by the strong domestic loan growth of 4.4% for the first quarter.

• The Group’s total customer deposits increased by 2.8% in the first quarter of 2010 to reach RM175.6 billion as at the end of March 2010. The Group's domestic customer deposits grew at a stronger 3.8%, against the backdrop of a contraction of the domestic industry’s customers deposit of 1.3% for the first two
months of 2010.

• The gross impaired loans ratio of the Group remained below 1% as at the end of March 2010, as compared to the banking industry's gross impaired loans ratio of 3.4% as at the end of February 2010.

• The Group's loan loss coverage of 172.3% continues to be the highest and most prudent in the Malaysian banking industry.

• The core capital ratio and risk-weighted capital ratio of the Group remain healthy at 9.6% and 13.7% respectively as at the end of March 2010.

"Barring unforeseen circumstances, the Group is expected to continue to recordsatisfactory performance for the rest of 2010", Tan Sri Dato’ Sri Dr. Teh Hong Piow (Chairman Of Public Bank)said.

There are a few public bank call warrants listed on KLSE, namely Pbbank-cj, Pbbank-cl and Pbbank-cm. Out of these 3 call warrants, Pbbank-cl is my favourite and closely followed by Pbbank-cj. Both Pbbank-cj and Pbbank-cl are in discount territory. I prefer Pbbank-cl more because of its higher gearing of 5.6. 

I did share my views on Public Bank and Pbbank-cl on my 1st April 2010 post. Since then, Pbbank-cl has jumped 26% and I expect this trade to continue provide me with more handsome profit.

 
Previous post regarding Public Bank:
http://cathoon.blogspot.com/2010/04/public-bank-on-track-to-meet-strong.html
http://cathoon.blogspot.com/2010/04/public-bank-set-to-jump.html
http://cathoon.blogspot.com/2010/04/cimb-research-reaffirms-overweight-on.html