Public Bank net rises 3% on financing gains

Public Bank Group achieved a net profit of US$339.3 million in the first half of 2009. While the bank’s net profit for the same period in 2008 was US$367.59 million, it included a one-off goodwill payment of US$56.55 million from ING Asia/Pacific Limited in respect of the Group’s regional bancassurance distribution alliance with ING.

Excluding the non-recurring one-off goodwill payment, the Group’s underlying operating net profit improved by 3 percent over the same period in 2008 despite the more challenging operating environment and the negative impact on net interest margin arising from the Overnight Policy Rate reductions between November 2008 and February 2009 totaling 1.5 percent.

On a quarter-to-quarter comparison, the Group turned in a profit before taxation of US$231.86 million in the second quarter of 2009, a healthy 10 percent growth from US$210.66 million in the first quarter of 2009.

The growth in the Group’s half-year profit was mainly due to continued healthy growth in net interest and financing income by US$50.89 million or 9 percent, driven by the Group’s expanding loan and deposits businesses and sustained strong asset quality, despite the negative impact of the OPR reductions on net interest margin and the lagging effect of deposits re-pricing. The improved net profit performance translates into an annualised net return on equity of 26 percent and earnings per share of US$.0993 for the first half of 2009.