PUBLIC BANK - the country's largest bank by market capitalisation, does not expect the rising cost of living to significantly impact its loans growth or asset quality. It forecasts similar loans growth rate in the 2H-CY08 as the 12% experienced in 1HE Jun 2008, giving an annualised 24% loans growth.


At the same time, it expects to preserve asset qualitydue to pre-emptive measures including loan rescheduling by lengthening the repayment period and reducing some interest rates " .... on a case-by-case basis ....".


MD - TAY AH LEK - addressing reporters on Jul 16, 2008 after the Bank's 1HE Jun 30, 2008 results said the bank had to date restructured 5,000 such loan accounts. In 2H-FY08, the pre-emptive measures would continue but a smaller number of such accounts was expected.

For 2QE Jun 30, 2008, PUBLIC BANK reported 13.2% rise in Net Profit y-o-y after Minority Interest to RM593.5m whilePBT was up 8% to RM791.6m. In comparison, its 1Q-FY08 saw 51% growth in Net Profit after Minority Interest to RM717.4m and a 44% growth in PBT to RM970.6m.

TAY was also in favour of the present accommodative monetary strategy of low and stable interest rates. " .... The interest rate outlook continues to remain low and stable and we expect any change in the overnight policy rate to be gradual .... We still need the present accommodative monetary strategy to support growth. (In fact) it has supported growth very well so far ...." he added.

Meanwhile, TAY said PUBLIC BANK's hire-purchase rate of 4.2% at present was too low to be sustainable in current money market conditions where the equivalent rate was above 5%. However, " .... such rates are continuously reviewed ..."adding that there was no time frame and it would also depend on competition, demand and the money market.

As at end-Jun 2008, non-performing loans (NPLs) stood atRM1.22 bil with the Bank's net NPL falling below 1% for the first time at 0.93%. Loan loss coverage ratio as at end-Jun 2008 was 150%, versus the industry average of 78% at end-May, 2008.(By KLSETRACKER.com)