KUALA LUMPUR (May 5): Public Bank Bhd (KL:PBBANK), the country's third largest bank by assets, said it sees no immediate impact from the ongoing Middle East conflict, stressing that the group's asset quality remains stable.
“At this moment, the overall asset quality remains stable," said CEO Tan Sri Tay Ah Lek. "So I think we are okay."
According to the group's annual report, Public Bank maintained its track record of sound asset quality with a gross impaired loans ratio of 0.51% as at end-2025, significantly below the industry’s ratio of 1.37%.
Speaking at the bank's annual general meeting on Tuesday, Tay said that while the bank does not expect any significant impact from the tensions in West Asia for now, it will continue to monitor developments closely and take pre-emptive actions if necessary.
Tay said there is no serious trend of defaults across the bank's loan portfolios at this stage.
Tay said Public Bank remains optimistic on the domestic outlook, with the country’s gross domestic product (GDP) expected to grow between 4% and 5% this year.
However, he cautioned that a prolonged conflict could weigh on the broader economy and affect borrowers, particularly in the small and medium enterprises (SME) segments.
Tay said the bank is on standby to provide support for SME businesses via flexible repayment and restructuring schemes, including temporary relief measures for companies facing cash flow challenges.
Public Bank had a 18.7% share of the domestic SME financing market in 2025. It remained as the market leader in the residential property segment (with a market share of 20.1%), commercial property (32.4%) and hire purchase financing (32.8%).
The bank, which recorded a net return on equity (ROE) of 12.8% last year, expects to maintain a "leading double-digit ROE" going forward, said Tay.
He added: “With leading market share, Public Bank remains well-positioned to continue pursuing a synergistic growth strategy in the consumer banking and commercial lending sectors.
“In particular, the bank has been very proactive in expanding its SME financing portfolio. We have a very resilient SME portfolio all the while. In 2025, the bank achieved 10.6% growth in domestic SME financing."
Public Bank will also boost its non-interest income business, said Tay. "Leveraging the bank's large customer base, there are huge opportunities for cross-selling activities.”