KUALA LUMPUR (Feb 28): Public Bank Bhd, the country’s third largest bank by assets, said on Wednesday its net profit fell 5.73% in the fourth quarter (4Q) from a year earlier hit by high allowance for loan impairment and higher operating expenses as well as lower net interest income. 

Net profit for the three months ended Dec 31, 2023 was RM1.62 billion versus RM1.71 billion in the same period a year earlier. Revenue for the three months, meanwhile, increased by 8% to RM6.55 billion from RM6.06 billion. 

The bank’s net interest income for the quarter was 6.41% lower at RM2.3 billion. Other operating expenses expanded 5.6% to RM1.1 billion while allowance for impairment on loans, advances and financing rose 7.75% to RM96.99 million. 

“2024 is likely to be another year of challenges. However, given the domestic banks’ strong fundamentals with healthy capital and liquidity buffers, coupled with the sufficient pre-emptive provisioning and prudent coverage ratios, the banking sector will remain resilient in navigating any headwinds,” said Public Bank managing director and chief executive officer Tan Sri Dr Tay Ah Lek. 

The group will focus on growing its core retail and commercial banking business, he added. 

For the full year ended Dec 31 (FY2023), Public Bank’s net profit expanded 8.66% to RM6.65 billion from RM6.12 billion, while revenue climbed 18.91% to RM25.42 billion from RM21.43 billion. 

Public Bank declared a 10 sen dividend per share for the quarter, to be paid on March 22. This brings the total dividend per share for FY2023 to 19 sen — amounted to RM3.69 billion — higher than the total dividends paid in the past three years. 

The bank recorded healthy loans and deposits growth of 5.9% and 4.6% respectively during the year. It registered an average net interest margin of 2.2% during the year, contributing to a net interest and financing income of RM10.53 billion. 

Non-interest income grew by 2.6%, contributed by higher income derived from the group’s unit trust, foreign exchange and stockbroking businesses. 

Public Bank’s cost-to-income ratio stood at 33.7%, gross impaired loans ratio remained low at 0.59%. Loan loss allowances were lower by 57.1% as compared with 2022, with loan loss coverage ratio still standing at a prudent level of 181.8% as at the end of 2023. 

At Wednesday’s noon break, shares of Public Bank were a sen or 0.22% lower at RM4.46, giving it a market value of RM86.57 billion.