KUALA LUMPUR (May 14): Public Bank Bhd (KL:PBBANK) posted a flat first-quarter amid intense competition and volatile markets while flagging “unprecedented” external headwinds.

Net profit at the country’s third-largest bank by assets for the three months ended March 31, 2026 (1QFY2026) was RM1.75 billion, unchanged when compared to the same quarter a year earlier. Year-on-year, net interest income was up less than 1% to RM2.82 billion while non-interest income was 4% higher at RM825.9 million.

“With the ongoing Middle East conflict, Public Bank is cognisant of its potential impact on people and the economy,” the bank said. “In light of the unprecedented headwind, the group is mindful that individuals and businesses may face difficulties in their loan and financing repayment.”

No dividend was declared for the quarter. 

The outlook for the year remained tilted to the downside amid uncertainty surrounding global trade tariffs, geopolitical tensions in the Middle East and concerns over elevated financial market valuations, said Public Bank managing director and chief executive officer Tan Sri Tay Ah Lek.

Nevertheless, “Public Bank is in a strong position to weather the challenges, leveraging its long-standing solid fundamentals and prudent management”, he said.

Gross loans grew 5.7% on an annualised basis compared to 5.1% in 2025, while deposits growth accelerated to 5.3% from 3.2% in 2025. The net interest margin,  a measure of profitability from lending activities after accounting for funding costs, narrowed by eight basis points year-on-year to 2.11%.

In terms of asset quality, gross impaired loans — debts deemed irrecoverable as a percentage of total loans — stood at 0.51%, sharply lower than the industry average. Loan loss coverage was 147.0% and when regulatory reserves were included, the ratio would be higher at 251.2%.