Public Bank Bhd · MYX:PBBANK
Public Bank Bhd — H1 2007 Earnings Presentation
31 slides from Public Bank Bhd's earnings presentation, Jul 17, 2007
Slide 1: Group Unaudited Financial Results for the 1st Half Year Ended 30 June 2007
Group Unaudited Financial Results for the 1st Half Year Ended 30 June 2007 Analysts Briefing By Dato’ Sri Tay Ah Lek Managing Director 17 July 2007
Slide 2: Half Year Net Profit Hit RM1 billion
Half Year Net Profit Hit RM1 billion RM million Sen 1500 1,408.0 35 1,160.8 1,007.7 1,000.3 1000 30 845.3 716.7 29.8 500 25 25.6 0 21.9 20 Jun 05 Jun 06 Jun 07 PBT PAT EPS 2
Slide 3: Quarterly Net Profit
Quarterly Net Profit RM million 550 500 450 400 436 445 476 524 2% 7% 10% 350 300 'Sep 06 'Dec 06 'Mar 07 'Jun 07 3
Slide 4: Financial Performance – Net profit up 18% to RM1.0b
Financial Performance – Net profit up 18% to RM1.0b 2Q07 1Q07 % YTD Jun 07 YTD Jun 06 % RM mil RM mil q-o-q RM mil RM mil y-o-y Net Interest Income 783.8 762.6 3 1,546.4 1,376.4 12 Islamic Banking Income 119.3 105.5 13 224.8 209.4 7 Other Operating Income 349.4 289.2 21 638.6 463.3 38 Other Operatin
Slide 5: Quarterly Growth vs Preceding Quarter
Quarterly Growth vs Preceding Quarter 2Q07 1Q07 4Q06 3Q06 % q-o-q q-o-q q-o-q q-o-q Net Interest Income (include 4 1 2 3 IB income) Other Operating Income 21 9 8 (5) Other Operating Expenses 10 4 5 2 Operating Profit 7 2 2 1 Loan Loss Allowances 3 (18) (17) 11 Pre-Tax Profit 8 4 7 (1) Net Profit 10
Slide 6: Key Financial Ratios
Key Financial Ratios % % Jun 2007 Jun 2006 y-o-y 2Q07 1Q07 q-o-q Cost Income Ratio (%) 33.7 32.8 3 34.0 33.5 1 Return on Assets (%) 1.8 1.9 (4) 1.8 1.8 4 Net Return on Equity* (%) 24.2 21.5 13 24.6 22.9 8 Overheads / Avg. Assets (%) 1.1 1.1 (4) 1.1 1.0 8 Net Interest Margin on 3.2 3.4 (7) 3.1 3.3 (6
Slide 7: Net Interest Margin
Net Interest Margin 4.0% 3.7 3.6 3.5 3.4 3.4 3.5% 3.2 3.0% 3.3 2.5% 3.0 2.9 2.8 2.6 2.4 2.0% Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Net Int Margin Net Int Margin (excl. funds from NIDs Issued) Net interest income and financing income grew by RM186 m or 12% due to : • strong loan growth (8.5% fo
Slide 8: PBT of Major Group Companies
PBT of Major Group Companies Variance (excluding dividend from subsidiaries) Jun 2007 Jun 2006 RM mil % RM mil RM mil Public Bank 1,144.7 945.9 198.8 21 Public Mutual 71.2 41.7 29.5 71 Public Investment Bank 39.8 14.4 25.4 176 Public Bank (L) 14.0 9.7 4.3 44 Overseas Operations 173.6 163.1 10.5 6 of
Slide 9: Profit Contribution By Segments
Profit Contribution By Segments Jun 2007 Jun 2006 Variance RM mil % RM mil % % Retail Operations 1,087.3 73 820.4 70 33 Treasury & Capital Market 206.8 14 265.4 23 (22) Operations Fund Management 71.2 5 41.7 4 71 Corporate Lending 69.0 5 22.2 2 211 Investment Banking 52.4 3 16.4 1 220 Others 4.5 (*)
Slide 10: Fund Management Business
Fund Management Business RM billion % 30.00 36.1 40 33.5 27.9 28.9 22.07 27.6 30 26.3 20.00 16.19 12.08 20 9.88 10.00 8.23 5.80 5.35* 10 4.10 2.36 3.07 2.06 1.10 0.00 0 2002 2003 2004 2005 2006 ' Jun 07 Gross New Sales Net Asset Value Market Share * 6 months 10
Slide 11: Other Operating Income
Other Operating Income Jun 2007 Jun 2006 % 2Q07 1Q07 % RM mil RM mil y-o-y RM mil RM mil q-o-q Fee Income 378.9 293.2 29 197.8 181.1 9 Non Fee Income 259.7 170.1 53 151.6 108.1 40 Total 638.6 463.3 38 349.4 289.2 21 of which: Fund Management Income Jun 2007 Jun 2006 % 2Q07 1Q07 % RM mil RM mil y-o-y
Slide 12: Other Operating Expenses
Other Operating Expenses Jun 2007 Jun 2006 % 2Q07 1Q07 % RM mil RM mil y-o-y RM mil RM mil q-o-q Personnel Costs 464.0 391.7 18 249.6 214.4 16 Establishment Costs 156.3 142.0 10 78.8 77.5 2 Marketing Expenses 122.7 61.4 100 59.4 63.3 (6) Administration 70.1 76.4 (8) 37.7 32.4 16 Expenses Total 813.1
Slide 13: Loan Loss Allowances
Loan Loss Allowances 1. Loans secured by properties >5 years New Policy Aging of Loans 5 to 7 years > 7 years Collateral Value Assigned 50% of Realisable 0% of Realisable (Property) Value Value Net Recoveries 2007 –(RM19.7 million) (6 months) Net Specific Allowance 2006 – RM29.2 million Net Specific
Slide 14: Loan Loss Allowances (contd.)
Loan Loss Allowances (contd.) RM million 308.6 0.8% 300.0 261.4 0.72% 201.9 221.3 200.0 0.4% 0.39% 0.35% 0.34% 91.4 100.0 * 0.21% 0.0 0.0% 2003 2004 2005 2006 Jun 2007 Credit Charge Credit Charge off % * annualised 14
Slide 15: Financial Summary: Balance Sheet
Financial Summary: Balance Sheet Jun 2007 Dec 2006 Variance RM bil RM bil RM bil % Total Assets 161.9 147.8 14.1 9.5 Gross Loans and Advances 91.6 84.4 7.2 8.5 Domestic Gross Loans and Advances 82.2 76.3 5.9 7.7 Deposits from Customers 123.2 111.8 11.4 10.2 Shareholders’ Funds 9.1 9.0 0.1 0.2 Net As
Slide 16: Loan Growth, Loan Mix & Asset Quality
LOAN GROWTH, LOAN MIX & ASSET QUALITY
Slide 17: Loans Growth
Loans Growth Jun 2007 (%) (Annualised) PBB (8.5% in 6 months) 17.0 Industry Average* 6.4 *extrapolated based on 5 months loan growth in 2007 Market Share: Jun 2007 - 13.8% 2006 - 13.2% 2005 - 12.0% 17
Slide 18: Loans Approved
Loans Approved RM billion 20 17.1 16 13.4 12 8 5.6 4.5 4.2 3.1 3.4 3.1 4 1.2 1.1 0 Total Vehicle SMEs Housing Corporate 2007 2006 Vehicle financing - RM0.3 b or 7% increase SMEs loans - RM2.2 b or 65% increase Housing loans - <RM0.1 b or 2% increase Corporate loans - RM0.1 b or 9% increase 18
Slide 19: Loan by Purpose
Loan by Purpose Jun 2007 % of Dec 2006 % of Growth total total RM bil RM bil (%) loans loans Purchase of Landed 40.6 44 37.3 44 9 Properties - Residential 24.5 27 23.0 27 7 - Non-residential 16.1 18 14.3 17 13 Purchase of Transport 24.6 27 23.3 28 6 Vehicles Working Capital 14.8 16 13.5 16 10 Person
Slide 20: Fixed Rate & Floating Rate Loans
Fixed Rate & Floating Rate Loans RM4.3b RM34.7b 5% 38% 57% RM52.6b Fixed Rate Floating Rate Initial fixed rate, thereafter floating rate Interest rate Impact: 1% hike in interest rate would result in a RM131m increase in the Group’s net interest income. Duration : Modified duration is 1.58 years
Slide 21: Asset Quality
Asset Quality 3-month classification Jun 2007 Dec 2006 Gross NPL (RM mil) 1,560 1,578 Net NPL ratio (%) 1.5 1.6 Loan loss coverage (%) 104.8 99.9 GP ratio (%) 1.5 1.6 GP/Net NPL (%) 105.6 99.9 % 3 2 2.7 1 2.1 2.3 2.1 1.9 1.7 1.9 1.9 1.7 1.6 1.6 1.5 0 Dec'04 Jun'05 Dec'05 Jun'06 Dec'06 Jun '07 Gross
Slide 22: NPL Ratio for Key Lending Sectors
NPL Ratio for Key Lending Sectors Jun 2007 Gross NPL Dec 2006 Gross NPL Key Lending Sectors RM mil % RM mil % Housing Loans 690 2.8 706 3.1 SME 323 1.8 318 1.8 Hire Purchase 253 1.0 248 1.1 Total Key Lending Sectors 1,266 1.9 1,272 2.0 22
Slide 23: Continued Growth in Core & Wholesale Deposits
CONTINUED GROWTH IN CORE & WHOLESALE DEPOSITS
Slide 24: Deposits Growth
Deposits Growth Jun 2007 (%) (Annualised) PBB (10.2% in 6 months) 20.4 Industry Average* 18.6 *extrapolated based on 5 months deposit growth in 2007 Market Share: Jun 2007 - 14.3% 2006 - 14.2% 2005 - 13.2% 2004 - 12.4% 24
Slide 25: Total Deposits Grew By 10%
Total Deposits Grew By 10% Jun 2007 Dec 2006 Growth RM bil RM bil RM bil (%) Demand Deposits 12.2 11.3 0.9 8 Savings Deposits 15.8 14.8 1.0 7 Money Market Deposits 8.0 - 8.0 N/A Fixed Deposits 59.7 53.4 6.3 12 Others 0.4 0.4 (*) 15 96.1 79.9 16.2 20 NIDs 27.1 31.9 (4.8) (15) Total 123.2 111.8 11.4 1
Slide 26: Proposed Interim Dividend of 25% Less 27% Tax
PROPOSED: INTERIM DIVIDEND OF 25% LESS 27% TAX AMOUNTING TO RM612.5 MILLION 26
Slide 27: Impact Of The Proposed Dividend On CAR
Impact Of The Proposed Dividend On CAR JUN 2007 Dec 2006 (After Interim Dividend) (Before Interim Dividend) (After Final Dividend) Variance RM mil RM mil RM mil RM mil % - Equity Capital 6,529.3 7,141.8 6,176.0 965.8 16 - Hybrid Capital 1,152.2 1,260.3 1,089.9 170.4 16 Total Tier 1 Capital 7,681.5 8
Slide 28: Prospects for the 2nd Half of 2007
Prospects for the 2nd Half of 2007 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 g
Slide 29: Prospects for the 2nd Half of 2007 (contd.): Expansion of Branch Network
Prospects for the 2nd Half of 2007 (contd.) Overseas Operations: Expansion of Branch Network Number of Branches as at May 06* Dec 06 Jun 07 Dec 07 Hong Kong/China: 53 56 64 70 Public Finance - Hong Kong 40 40 41 41 PB(HK) - Hong Kong 12 15 21 25 - China 1 1 2 4 Cambodia 5 5 7 10 Laos 1 1 1 3 * Date
Slide 30: Prospects for the 2nd Half of 2007 (contd.): Overseas Loan Growth
Prospects for the 2nd Half of 2007 (contd.) Overseas Operations: Loan Growth Variance Jun 2007 Dec 2006 Loan Growth HKD/USD HKD/USD HKD/USD % mil mil mil Public Bank (Hong Kong) (HKD) 12,649 10,226 2,423 24 Cambodian Public Bank (USD) 212 158 54 34 30
Slide 31: Thank you
Thank you