KUALA LUMPUR (Feb 25): Public Bank Bhd's net profit for the fourth quarter ended Dec 31, 2020 (4QFY20) fell 18.35% to RM1.15 billion from RM1.41 billion a year ago, due to higher loan impairment allowance made amid the Covid-19 pandemic.

Its quarterly revenue also slipped 13.35% to RM4.92 billion, from RM5.67 billion a year ago, its filing with Bursa Malaysia showed.

The group announced an interim dividend of 13 sen to be payable on March 22.

The group said the decrease in profit for the current quarter was mainly due to higher loan impairment allowance made by RM513.3 million due to pre-emptive allowance set aside in anticipation of the potential effect of the Covid-19 pandemic.

"These were partially offset by higher net fee and commission income by RM121.6 million on higher income from fund management and stockbroking businesses, and higher net income from Islamic banking business by RM48.8 million," it said.

For the full FY20, the group's net profit slid 11.61% to RM4.87 billion, from RM5.51 billion a year earlier. Its full-year revenue also declined by 9.58% to RM20.30 billion, from RM22.45 billion.

Public Bank said in a statement that the lower profit in 2020 was mainly attributable to the net interest margin compression arising from the 125-basis-point overnight policy rate reductions during the year, and the one-off net modification loss of RM498 million incurred due to the Covid-19 relief measures offered to individuals and businesses.

For 2020, the group's total loans grew 4.6% year-on-year, supported by residential property financing, passenger vehicle financing and small and medium enterprise financing.

Meanwhile, its non-interest income expanded 17.5% compared with in 2019, mainly due to stronger growth achieved by the group's unit trust business, investment income as well as stockbroking income.

As at the end of 2020, the Public Bank Group's gross impaired loan ratio stood at 0.4% and remained well below the banking industry's gross impaired loan ratio of 1.6%.

Its common equity Tier 1 capital ratio, Tier 1 capital ratio and total capital ratio stood at 14.0%, 14.0% and 17.1% respectively.

Public Bank founder Tan Sri Dr Teh Hong Piow said amid the prevailing economic conditions, the banking group will remain vigilant and agile in balancing growth with risks.

"As the group focuses on organic growth strategy in retail and commercial banking, it will continue to strengthen its resilient business model and core competencies, including its superior asset quality, efficient cost management and customer service excellence.

"Holding on to its tradition of prudent risk management and strong corporate governance, the group remains steadfast in its unwavering commitment to safeguarding the interest of all its stakeholders," he added.

At noon break, Public Bank rose two sen or 0.49% to RM4.10, valuing the group at RM79.58 billion.