KUALA LUMPUR (Aug 27): Public Bank Bhd (KL:PBBANK), Malaysia’s third-largest banks by assets, said on Tuesday its net profit rose 10% in the second quarter from a year earlier, thanks to higher net interest income and non-interest income.

Net profit for the three months ended June 30, 2024 (2QFY2024) was RM1.78 billion, compared with RM1.62 billion in the same period last year, Public Bank said in an exchange filing. Net interest income rose 5% year-on-year to RM2.32 billion.

The company also declared a first interim dividend of 10 sen per share, amounting to RM1.94 billion, payable on Sept 23.

For the quarter under review, net interest income was RM2.32 billion, while net income from Islamic banking stood at RM416.99 million. Non-interest income was RM674.75 million.

For the first half ended June 30, 2024 (1HFY2024), the group reported a net profit of RM3.44 billion or 17.70 sen per share, up more than 3% from RM3.33 billion or 17.17 sen per share.

Revenue increased 8.9% to RM13.49 billion for 1HFY2024, from RM12.39 billion a year ago.

In a separate statement, the group said the better performance was driven mainly by growth in the loan and deposit businesses, and further supported by growth in non-interest income.

"Coupled with prudent cost management and sound asset quality, the group achieved a net return on equity of 12.8% for 1HFY2024," it added.

Year-on-year, 1HFY2024 net interest and financing income rose by 3.9% to RM5.42 billion, with the net interest margin/financing margin staying stable at 2.2%.

Meanwhile, non-interest income recorded a 5.8% growth to RM1.32 billion, largely from higher income in the unit trust and stock-broking businesses.

"With the ongoing initiatives to enhance operational efficiency, operating expenses continued to be prudently managed, as reflected by the group’s cost-to-income ratio of 35.3%," read the statement.

In terms of asset quality, the group’s impaired loans ratio was steady at 0.6%, while loan loss coverage was sustained at 154.2%.

The group’s total loan portfolio sustained its upward momentum in 1HFY2024, and rose by an annualised rate of 6.0% to RM411.0 billion. In particular, the domestic loan portfolio expanded by 5.9% on an annualised basis to RM383.7 billion, outperforming the Malaysian banking industry’s annualised loan growth of 5.0%.

Total newly approved domestic loans increased by 8.9% in 1HFY2024, as compared to the same period last year.

Total customer deposits posted an annualised growth rate of 5.8% to RM424.9 billion, while domestic customer deposits expanded by an annualised growth rate of 5.3% to RM395.1 billion, led mainly by core deposit inflows.

The group also maintained a healthy liquidity position, with a gross loan-to-fund and equity ratio of 82.1% as of June 2024.

The group's loan loss coverage ratio stood at 154.2%, which was above the banking industry’s loan loss coverage ratio of 91.7%.

Including regulatory reserves, the loan loss coverage ratio was higher at 192.7%.

Non-interest income increased 5.8% year-on-year to RM1.32 billion in 1HFY2024, mainly supported by growth in unit trust income of 16.3% and an increase in stockbroking income of 44.6%.

The group continued to uphold its capital position, with its common equity Tier 1 capital ratio at 14.5%, the Tier 1 capital ratio at 14.5%, and the total capital ratio at 17.4%.

The group's liquidity coverage ratio remained above the regulatory requirement at 138.5%.

Public Bank shares gained 17 sen or 3.8% to close at RM4.68, valuing the banking group at some RM90.8 billion.