Public Bank Bhd · MYX:PBBANK
Public Bank Bhd — FY2007 Earnings Presentation
31 slides from Public Bank Bhd's earnings presentation, Jan 21, 2008
Slide 1: Group Audited Financial Results for the Year Ended 31 Dec 2007
Group Audited Financial Results for the Year Ended 31 Dec 2007 Analysts Briefing By Dato’ Sri Tay Ah Lek Managing Director 21 January 2008
Slide 2: 24% Growth in Pre-Tax Profit to RM3.0 billion
24% Growth in Pre-Tax Profit to RM3.0 billion RM million Sen 3,003.6 65 3000 63.3 2,416.4 60 2500 2,059.4 2,123.9 2000 1,726.7 55 1,459.1 1500 52.1 50 1000 45 500 44.5 0 40 2005 2006 2007 PBT PAT EPS 2
Slide 3: Quarterly Net Profit
Quarterly Net Profit RM million 600 550 580 500 544 7% 450 524 4% 400 476 10% 7% 350 300 'Mar 07 'Jun 07 'Sep 07 'Dec 07 3
Slide 4: Market Capitalisation
Market Capitalisation RM billion RM 38.8 40 12 11.00 10 30 26.9 24.3 8 22.2 7.75 18.7 7.10 20 6.55 6 5.66 11.0 4 10 3.64 2 0 0 2002 2003 2004 2005 2006 2007 Market capitalisation Share price (local) 4
Slide 5: Financial Performance: Net profit up 23% to RM2.1b
Financial Performance Net profit up 23% to RM2.1b 4Q07 3Q07 % 2007 2006 % RM mil RM mil q-o-q RM mil RM mil y-o-y Net Interest Income 871.4 825.8 6 3,243.6 2,870.1 13 Islamic Banking Income 127.2 126.2 1 478.2 428.0 12 Other Operating Income 389.7 361.1 8 1,389.5 973.4 43 Other Operating Expenses 45
Slide 6: Quarterly Growth vs Preceding Quarter
Quarterly Growth vs Preceding Quarter 4Q07 3Q07 2Q07 1Q07 % q-o-q q-o-q q-o-q q-o-q Net Interest Income (include 5 5 4 1 IB income) Other Operating Income 8 3 21 9 Other Operating Expenses 8 (1) 10 4 Operating Profit 4 8 7 2 Loan Loss Allowances (12) 24 3 (18) Pre-Tax Profit 6 6 8 4 Net Profit 7 4 1
Slide 7: Key Financial Ratios: Net ROE 26.3%
Key Financial Ratios Net ROE 26.3% % % 2007 2006 y-o-y 4Q07 3Q07 q-o-q Cost Income Ratio (%) 33.1 32.7 1 33.0 32.2 3 Return on Assets (%) 1.9 1.9 0 1.9 1.9 2 Net Return on Equity* (%) 26.3 21.9 20 27.5 25.2 9 Overheads / Avg. Assets (%) 1.1 1.1 (2) 1.1 1.0 5 Net Interest Margin on 3.2 3.4 (6) 3.2 3.
Slide 8: Net Interest Margin
Net Interest Margin 4.0% 3.7 3.5 3.38 3.5% 3.18 3.0% 3.3 2.5% 2.9 2.64 2.45 2.0% 2004 2005 2006 2007 Net Int Margin Net Int Margin (excl. funds from NIDs and MMDs Issued) Net interest income and financing income grew by RM418 m or 13% due to : • strong loan growth (20.2% for the year) • Strong dep
Slide 9: Productivity & Efficiency
Productivity & Efficiency 2002 2003 2004 2005 2006 2007 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 Gross loan per employee 3,089 3,731 4,496 5,320 6,298 7,098 Deposit per employee 3,828 4,008 5,707 6,573 8,345 9,713 PBT per employee 100 115 149 161 180 210 % RM '000 250 40 210 180 200 161 149 36 150
Slide 10: PBT of Major Group Companies
PBT of Major Group Companies Variance (excluding dividend from subsidiaries) 2007 2006 RM mil RM mil RM mil % Public Bank 2,343.0 1,974.1 368.9 19 Public Mutual 182.9 97.3 85.6 88 Public Investment Bank 96.4 35.3 61.1 173 Public Bank (L) 28.1 17.7 10.4 59 Overseas Operations 435.6 331.0 104.6 32 10
Slide 11: Profit Contribution By Segments
Profit Contribution By Segments 2007 2006 Variance RM mil % RM mil % % Retail Operations 2,307.8 73 1,893.0 74 22 Treasury & Capital Market 390.2 12 477.8 19 (18) Operations Fund Management 182.9 6 97.3 4 88 Investment Banking 166.5 5 40.9 2 307 Corporate Lending 105.2 3 35.8 1 194 Others 13.6 1 7.9
Slide 12: Fund Management Business
Fund Management Business RM billion 40.0 % 40 33.5 30.0 28.39 27.9 28.9 27.6 30 26.3 20.0 16.19 20 12.08 13.12 9.88 10.0 8.23 5.80 10 3.07 4.10 2.36 2.06 1.10 0.0 0 2002 2003 2004 2005 2006 2007 Gross New Sales Net Asset Value Market Share (%) 12
Slide 13: Other Operating Income
Other Operating Income 2007 2006 % 4Q07 3Q07 % RM mil RM mil y-o-y RM mil RM mil q-o-q Fee Income 1,028.4 678.1 52 304.9 258.4 18 Non Fee Income 361.1 295.3 22 84.8 102.7 (17) Total 1,389.5 973.4 43 389.7 361.1 8 Included in fee income are: 2007 2006 % 4Q07 3Q07 % Fund Management Income RM mil RM mi
Slide 14: Other Operating Expenses
Other Operating Expenses 2007 2006 % 4Q07 3Q07 % RM mil RM mil y-o-y RM mil RM mil q-o-q Personnel Costs 960.6 811.5 18 258.1 238.5 8 Establishment Costs 306.4 287.1 7 71.8 78.3 (8) Marketing Expenses 278.8 165.9 68 84.4 71.7 18 Administration 147.9 134.1 10 43.9 33.9 29 Expenses Total 1,693.7 1,398
Slide 15: Loan Loss Allowances
Loan Loss Allowances RM million 308.6 0.8% 300.0 261.4 0.72% 201.9 221.3 196.9 200.0 0.4% 0.39% 0.35% 0.34% 100.0 0.21% 0.0 0.0% 2003 2004 2005 2006 2007 Credit Charge Credit Charge off % 15
Slide 16: Summary of Balance Sheet
Summary of Balance Sheet 2007 2006 Variance RM bil RM bil RM bil % Total Assets 174.2 147.8 26.4 17.9 Gross Loans and Advances: - including Islamic financing sold to Cagamas 101.4 84.4 17.0 20.2 - excluding Islamic financing sold to Cagamas 101.0 84.4 16.6 19.7 Domestic Gross Loans and Advances 90.5
Slide 17: Loans Growth of 20.2%
Loans Growth of 20.2% 2007 (%) PBB - including Islamic financing sold to Cagamas 20.2 - excluding Islamic financing sold to Cagamas 19.7 Industry Average* 10.5 Market Share: 2007(Nov) - 14.0% 2006 - 13.2% 2005 - 12.0% 2004 - 11.1% *Industry figures and market share are based on position as at 30 Nov
Slide 18: Loans Approved
Loans Approved RM billion 50 41.8 40 30 25.9 20 11.6 9.6 10.8 8.5 7.0 10 7.0 5.4 1.5 0 Total Vehicle SMEs Housing Corporate 2007 2006 Vehicle financing - RM1.1 b or 13% increase SMEs loans - RM4.6 b or 66% increase Housing loan - RM1.6 b or 30% increase Corporate loans - RM9.3 b or 620% increase 18
Slide 19: Loan by Purpose
Loan by Purpose 2007 % of total 2006 % of total Growth RM bil loans RM bil loans (%) Purchase of Landed Properties 45.2 44 37.3 44 21 - Residential 26.7 26 23.0 27 16 - Non-residential 18.5 18 14.3 17 29 Purchase of Transport 26.1 26 23.3 28 12 Vehicles Working Capital 17.2 17 13.5 16 27 Personal Us
Slide 20: Fixed Rate & Floating Rate Loans
Fixed Rate & Floating Rate Loans RM3.1b RM38.8b 3% 59% 38% RM59.5b Fixed Rate Floating Rate Initial fixed rate, thereafter floating rate Interest rate Impact: 1% hike in interest rate would result in a RM118m increase in the Group’s net interest income. Duration : Modified duration is 1.6 years.
Slide 21: Asset Quality: Net NPL Ratio 1.2%
Asset Quality Net NPL Ratio 1.2% 3-months classification 2007 2006 Gross NPL (RM mil) 1,404 1,578 Gross NPL ratio (%) 1.4 1.9 Net NPL ratio (%) 1.2 1.6 Loan loss coverage (%) 119.5 99.9 GP ratio (%) 1.5 1.6 GP/Net NPL (%) 121.9 99.9 % 3 2 2.7 1 2.1 2.3 2.1 1.9 1.9 1.9 1.7 1.6 1.6 1.7 1.5 1.4 1.2 0 D
Slide 22: NPL Ratio for Key Lending Sectors
NPL Ratio for Key Lending Sectors 2007 Gross NPL 2006 Gross NPL Key Lending Sectors RM mil % RM mil % Housing Loans 648 2.4 706 3.1 Hire Purchase 230 0.9 248 1.1 SME 250 1.3 295 1.7 22
Slide 23: Deposit Growth of 24.1%
Deposit Growth of 24.1% 2007 (%) PBB 24.1 Industry Average* 18.5 Market Share: 2007(Nov) - 14.3% 2006 - 14.2% 2005 - 13.2% 2004 - 12.4% *Industry figures and market share are based on position as at 30 November 2007. 23
Slide 24: Total Deposits Grew By 24%
Total Deposits Grew By 24% 2007 2006 Growth RM bil RM bil RM bil (%) Demand Deposits 14.0 11.3 2.7 24 Savings Deposits 16.9 14.8 2.1 14 Fixed Deposits 64.5 53.4 11.1 21 Others 0.8 0.3 0.5 103 96.2 79.8 16.4 20 NIDs 18.1 32.0 10.6 33 Money Market Deposits 24.5 - Total 138.8 111.8 27.0 24 2007 2006
Slide 25: Overseas Operations – 15% of the Group's Pre-tax Profit
Overseas Operations – 15% of the Group’s Pre-tax Profit Variance 2007 2006 mil mil mil % Pre-tax Profit ¾ Public Financial Holdings Limited Group – (HKD) 785.1 596.1 189.0 32 ¾ Cambodian Public Bank Ltd – (USD) 24.0 14.6 9.4 65 Loans Growth ¾ Public Bank (HK) Ltd - (HKD) 15,464 10,226 5,238 51 ¾Camb
Slide 26: Overseas Operations (cont.)
Overseas Operations (cont.) Expansion of Branch Network Number of Branches as at May 06* Dec 06 Dec 07 Mac 08 (Target) Hong Kong/China: 53 56 66 68 Public Finance - Hong Kong 40 40 41 41 PB(HK) - Hong Kong 12 15 23 25 - China 1 1 2 2 Cambodia 5 5 9 11 Laos 1 1 1 3 Vietnam 5 6 6 7 * Date of acquisiti
Slide 27: Dividend
Dividend Interim dividend (paid in Aug ’07) Total 25 sen Proposed: 75 sen • Final dividend per share 40 sen Total for 2007 • Special dividend 50 sen 10 sen per share 27
Slide 28: Dividend (cont.): Net dividend payout
Dividend (cont.) Net dividend payout 28
Slide 29: Capital Adequacy Ratio
Capital Adequacy Ratio 2007 2006 Variance Before Proposed Dividend RM mil RM mil RM mil % - Equity Capital 7,626.6 7,151.0 475.6 7 - Hybrid Capital 1,345.9 1,262.0 83.9 7 Total Tier 1 Capital 8,972.5 8,413.0 559.5 7 - General Allowance 1,523.0 1,318.5 204.5 16 - Subordinated Notes 2,469.8 2,627.8 (1
Slide 30: Prospects for Year 2008
Prospects for Year 2008 To maintain earning growth momentum leveraging on: ¾ continued strong loans & deposits growth; ¾ continued growth in net interest income; ¾ stable NPL. To build on existing strengths (Strong brand, market positions, capital strength and asset quality). Loan growth will
Slide 31: Thank you
Thank you