Public Bank’s Q1 net profit surges 51% to RM717m

51% boost on net profit?!! Wait a minute, The percentage change is measured on a QoQ basis. Yuks, the journalist try to mislead or what?

Non interest income grew by 91%. Totally insignificant compared to the magnitude of interest income.

Total customer deposits rose at an annualised rate of 16.4% to RM144.5bil as at the end of March 2008. Careful here about the word "annualised", forecast is just mere forecast.

The business is improving but there is not need to exaggerating the relative ratios.
RM1 to RM2 resulting to 100% profit but it is just RM1.

I'm expecting the day when the interest rates/yields are so low, the market is so inundated with unutilized liquidity, strengthen inflations, weaken purchasing power, worsen credit spreads and blah blah, that's the time to increase my portfolio's explosure to banking sector, especially only after the subprime/CDO/CLO or whatever you called it meet their salvation days.

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Public Bank’s Q1 net profit surges 51% to RM717m
KUALA LUMPUR: Public Bank Bhd reported net profit of RM717mil for the first quarter ended March 31, up 51% from RM476mil a year ago.

Announcing the strong set of results on Monday, it said the net profit of RM717mil represented 29% of the market consensus of the 2008 full year net profit of RM2.47bil. Pre-tax profit rose 44% to RM971mil over the same period.

“The strong financial performance of the Public Bank Group was contributed by healthy growth in net interest and financing income and strong growth in other operating income, partially offset by an increase in operating expenses and higher loan loss allowances due to higher business volumes,” it said.

It said the Islamic banking operations reported a 17% increase in net interest income and net income of RM1.02bil, up 17%. This saw the Islamic banking operations surpassing the RM1bil mark for the first time.

It said the strong earnings growth was underpinned by continued strong expansion in both the Public Bank Group’s lending and deposit-taking businesses and improvement in asset quality.

Other operating income grew strongly by 93% to RM558mil from RM289mil a year ago.

Public Bank said the group saw a strong growth in its wealth management business, particularly the fund management business and bancassurance distribution under its 10-year regional strategic alliance with ING/Asia Pacific Ltd.

“In addition, a goodwill payment of RM200mil was received from ING during the quarter pursuant to this strategic alliance,” it said.

Highlights of the group’s Q1 results:

* Net profit attributable to shareholders increased by 51% as compared to the corresponding quarter ended 31 March 2007, contributed by strong growth of 46% in operating profit. * Annualised net return on equity for Q1 improved to 34.0% as compared to 26.3% for the financial year ended Dec 31, 2007.

* Earnings per share increased by 51% to 21.4 sen in the first quarter of 2008 as compared to 14.2 sen a year ago.

* Non-interest income grew by 93% during the quarter.

* Total loans and advances grew by RM5.6bil or an annualised rate of 22% during Q1of 2008 to reach RM106.6bil as at the end of March 2008.

* Total customer deposits rose at an annualised rate of 16.4% to RM144.5bil as at the end of March 2008. * Net non-performing loan ratio further improved from 1.2% as at the end of December 2007 to 1.1% as at the end of March 2008 and was about one third that of the banking industry’s net NPL ratio of 3.1%.

* The Group’s risk-weighted capital ratio remains strong at 12.2% as at the end of March 2008.