KUALA LUMPUR: The country’s third largest bank by assets, Public Bank Bhd, saw net profit rise 3.7% to RM678.23mil for the quarter ended Dec 31 compared with a year ago on higher loans and deposits growth. Revenue for the quarter came in at RM2.49bil.
For the financial year ended Dec 31, 2009 (FY09), net profit was down 2.47% to RM2.51bil on revenue of RM9.71bil, which was 7.47% lower than FY08 after taking into consideration a one-off goodwill income of RM200mil in respect of the bancassurance distribution alliance with ING Asia/Pacific Ltd.
Excluding the one-off income, the bank’s underlying operating pre-tax profit improved by 4.5% for FY09 compared with FY08.
According to analysts, the bank’s net profit was above market expectations. The market had projected a net profit of RM2.41bil but net profit for FY09 came in 4.14% higher.
Earnings per share (EPS) for FY09 stood at 73.3 sen with the EPS for the quarter under review at 19.7 sen, representing a quarter-on-quarter uptrend with net return on equity at 26.1%. The bank also declared a second interim cash dividend of 25 sen less 25% tax and a share dividend to be distributed from treasury shares on the basis of one share for every 68 existing shares held.
OSK Research Sdn Bhd analyst Keith Wee said in a report that restraint in future dividend payout and concerns over the need for additional capital and hence more subdued returns on equity growth would likely cap share price performance in the immediate to medium term.
He said the bank’s management had indicated that future dividend payout ratios could be at a more realistic 50% to 55% (versus the 79.3% payout in FY09) due to the lean core equity capital and potential increase in new regulatory requirements under Basel III.
According to chairman Tan Sri Teh Hong Piow, whose note on the financial results was read by managing director Tan Sri Tay Ah Lek at a media briefing yesterday, the bank’s improved profit was attributable to continued strong growth in net interest and financing income, up10.2% to RM4.71bil.
Teh said this was despite the negative impact on net interest margins arising from the reduction in the overnight policy rate on three occasions between November 2008 and February 2009.
He added that loans grew by 14.4% to RM137.6bil supported by domestic loans and advances, which expanded strongly by 16.8% driven mainly by residential property, passenger car and commercial financing to small medium enterprises (SMEs), making up 78% of the loan portfolio as at the end of 2009.
Teh said domestic loan approvals and loan applications for the year advanced 21.9% and 26.3% respectively compared with FY08. “Housing loan approvals were particularly strong, recording an increase of 39.3% in 2009,” he said.
Meanwhile, Tay said there were no immediate plans to acquire any banks despite the current spate of news on mergers and acquisitions in the local banking scene.
“We plan to open new branches in 2010, with two more in Hong Kong, one in Shenzhen, five in Cambodia, two in Vietnam and one in Laos,” he said, adding that overseas operations contributed 7.2% to pre-tax profit last year.
Tay said there were plans to increase overseas contributions to 15% over a three- to five-year period. “Overall, the bank is targeting loans growth and advances of 14% to 15% or RM20bil for 2010 with contributions from residential property, passenger car and SME financing remaining the main sources of growth,” he said.
Tay said net interest margins were expected to remain stable due to a stable interest rate environment, steady demand for loans and ample liquidity in the system. “We expect the overnight policy rate to remain low as inflation is low and there is a need to support the economic recovery,” he said.
Tuesday, February 2, 2010
Public Mutual: Malaysian equity market fairly valued
MALAYSIA'S stock market valuations look stretched but builders and exporters may shine, helped by a recovering economy at home and abroad, said Malaysian fund manager Public Mutual.
The country's biggest private fund management firm, with RM34.3 billion in assets under management, is bullish about equities in China, Australia and Singapore, said chief executive officer Yeoh Kim Hong.
"In terms of valuations, the local market is fairly valued," said Yeoh.
Malaysia was one of the worst-performing stock markets in Asia last year, ranked fourth from the bottom. The country's benchmark share index is trading near its 10-year average price-to-earnings ratio of 16.7 times, Yeoh said in an e-mail interview.
Public Equity Fund, which invested mainly in Malaysian stocks, outperformed the FTSE Bursa Malaysia KLCI index over the past 12 months, with a total return of 59.4 per cent, compared with the index's 48.4 percent return during the same period, data on Public Mutual's website showed.
For 2010, investment themes are expected to be centred around the country's economic performance, said Yeoh."Investment themes in Malaysia include beneficiaries of the pick-up in construction activities, resources stocks as a hedge against inflation and selected export driven stocks on the back of a recovery in global demand," said Yeoh.
Trade-dependent Malaysia may see its gross domestic product (GDP) expand by 5 per cent in 2010 after shrinking by an estimated 3 per cent in 2009, a Reuters poll on 15 economists showed this month. Public Mutual holds 30 million shares in palm oil exporter IOI Corp on the Malaysian stock exchange, Thomson Reuters data showed.
It also owns 8.6 million shares in IJM Corp, the country's largest construction company by assets. Elsewhere in Asia, Yeoh said her firm likes China, Australia and Singapore. "Despite the Chinese government's recent tightening measures to slow credit growth, we are optimistic about the long term prospects for Chinese stocks," said Yeoh. "We are also positive about the outlook for Australia and Singapore which are positioned to benefit from the anticipated global economic recovery," she said.
In terms of sectors, Public Mutual prefers consumer, infrastructure and natural resources stocks in the region, she said. Yeoh said her firm will be selective in investing in Asia's telecommunications sector, which had underperformed in emerging as well as developed markets in the past year. "Broadly, the growth prospects for telecommunications companies are constrained as penetration rates are
generally high in most major markets," she said. "Telecommunications stocks tend to be perceived as yield plays and laggards during an economic recovery," she added.
Public Mutual has about 60 million shares in Malaysia's Axiata, which owns telecommunications assets in many fast-growing markets such as Sri Lanka, Indonesia and India.
The fund manager also owns 5.96 million shares in DiGi.com, the smallest mobile provider in Malaysia. -Reuters
NOTE:Copyright © The New Straits Times Press (Malaysia) Berhad, Balai Berita 31, Jalan Riong, 59100 Kuala Lumpur, Malaysia.
The country's biggest private fund management firm, with RM34.3 billion in assets under management, is bullish about equities in China, Australia and Singapore, said chief executive officer Yeoh Kim Hong.
"In terms of valuations, the local market is fairly valued," said Yeoh.
Malaysia was one of the worst-performing stock markets in Asia last year, ranked fourth from the bottom. The country's benchmark share index is trading near its 10-year average price-to-earnings ratio of 16.7 times, Yeoh said in an e-mail interview.
Public Equity Fund, which invested mainly in Malaysian stocks, outperformed the FTSE Bursa Malaysia KLCI index over the past 12 months, with a total return of 59.4 per cent, compared with the index's 48.4 percent return during the same period, data on Public Mutual's website showed.
For 2010, investment themes are expected to be centred around the country's economic performance, said Yeoh."Investment themes in Malaysia include beneficiaries of the pick-up in construction activities, resources stocks as a hedge against inflation and selected export driven stocks on the back of a recovery in global demand," said Yeoh.
Trade-dependent Malaysia may see its gross domestic product (GDP) expand by 5 per cent in 2010 after shrinking by an estimated 3 per cent in 2009, a Reuters poll on 15 economists showed this month. Public Mutual holds 30 million shares in palm oil exporter IOI Corp on the Malaysian stock exchange, Thomson Reuters data showed.
It also owns 8.6 million shares in IJM Corp, the country's largest construction company by assets. Elsewhere in Asia, Yeoh said her firm likes China, Australia and Singapore. "Despite the Chinese government's recent tightening measures to slow credit growth, we are optimistic about the long term prospects for Chinese stocks," said Yeoh. "We are also positive about the outlook for Australia and Singapore which are positioned to benefit from the anticipated global economic recovery," she said.
In terms of sectors, Public Mutual prefers consumer, infrastructure and natural resources stocks in the region, she said. Yeoh said her firm will be selective in investing in Asia's telecommunications sector, which had underperformed in emerging as well as developed markets in the past year. "Broadly, the growth prospects for telecommunications companies are constrained as penetration rates are
generally high in most major markets," she said. "Telecommunications stocks tend to be perceived as yield plays and laggards during an economic recovery," she added.
Public Mutual has about 60 million shares in Malaysia's Axiata, which owns telecommunications assets in many fast-growing markets such as Sri Lanka, Indonesia and India.
The fund manager also owns 5.96 million shares in DiGi.com, the smallest mobile provider in Malaysia. -Reuters
NOTE:Copyright © The New Straits Times Press (Malaysia) Berhad, Balai Berita 31, Jalan Riong, 59100 Kuala Lumpur, Malaysia.
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