KUALA LUMPUR (Aug 26): Public Bank Bhd (KL:PBBANK) saw its net profit rise 3.7% year-on-year in the second quarter ended June 30, 2026 (2QFY2026), as higher non-interest income more than offset increased impairment charges.

The country’s third-largest bank by total assets recorded net profit of RM1.82 billion for 2QFY2026, up RM64.4 million from RM1.76 billion a year earlier, while revenue increased 3.5% to RM7.61 billion from RM7.35 billion.

Earnings per share stood at 9.43 sen versus 9.11 sen a year ago.

Public Bank declared a first interim dividend of 10.5 sen per share, representing a total payout of RM2.04 billion, with the dividend scheduled for payment on Sept 23. 

In a bourse filing, the bank said the improved performance was mainly driven by a RM165.7 million, or 21.3%, increase in non-interest income, mainly due to improved sales of trust units and higher unit trust management fee income.

Net interest income during the quater under review, meanwhile, declined 0.2% year-on-year to RM2.41 billion.

The improvement was partly offset by an RM81.1 million increase in impairment on loans, advances and financing, which the bank attributed to the normalisation of credit charges, while other operating expenses rose RM26.3 million, or 2%, during the quarter.

Other comprehensive income (net) stood at RM81 million, reversing from a net loss of RM272.2 million in the corresponding quarter a year earlier, mainly due to gains from the translation of foreign operations and lower losses on cash flow hedges.

For the first half ended June 30, 2026 (1HFY2026), the bank’s net profit rose 2.02% to RM3.58 billion from RM3.51 billion, while revenue increased 1.79% to RM14.93 billion from RM14.67 billion.

For 1HFY2026, Public Bank’s total loans and deposits posted annualised growth rates of 5.9% and 4.7% respectively. Operating expenses remained well managed, with an efficient cost-to-income ratio of 35.1%. 

Asset quality remained sound with the gross impaired loans ratio standing at 0.54%, well below the banking industry’s average impaired loan ratio of 1.43%.

Loan loss coverage remained at a prudent level of 138.9%, exceeding the 81.3% industry loan loss coverage ratio. The net return on equity for 1HFY2026 remained stable at 12.2%. 

The bank maintained a strong capital position, with its common equity Tier 1, Tier 1 and total capital ratios at 13.9%, 13.9% and 16.5% respectively as at end-June 2026.

It also maintained a healthy funding position, with its gross loans to funds and equity ratio at 83.9% as at end-June.

Looking ahead, Public Bank said global economic growth remains clouded by uncertainty, with rising inflationary pressures and energy prices posing key risks amid ongoing geopolitical tensions in the Middle East. 

Separately, Public Bank said in the statement that it would continue to provide timely support and assistance to customers affected by the ongoing conflict in the Middle East.

The bank said it would closely monitor the situation and take appropriate measures to support affected customers as circumstances evolve.

“As global uncertainties remain, the bank is mindful of the potential impact that could affect customers through energy prices, inflation as well as consumer and business sentiments,” said Tan Sri Dr Tay Ah Lek, the managing director and chief executive officer of Public Bank.

At Wednesday’s noon break, shares of Public Bank settled four sen or 0.78% higher at RM5.14, giving it a market capitalisation of RM99.77 billion.