Public Bank improves by 4.5% via financing income

Public Bank achieved a pre-tax profit of US$984.7 million and net profit of US$747 million for 2009. This happened on the back of a strong 10.2 percent growth in net interest and financing income. In the previous year, the Group’s pre-tax profit of US$1.002 billion included a significant one-off goodwill income of US$59.3 million in respect of the bancassurance distribution alliance with ING Asia/Pacific Limited. Excluding this one-off income, the Group's underlying operating pre-tax profit improved by 4.5 percent.

The Public Bank Group's improved profit was mainly due to continued strong growth in net interest and financing income by 129 million or 10.2 percent to stand at US$1.39 billion in 2009, 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. This was mainly driven by loan growth and core customer deposits growth which remained strong at 14.4 percent and 14.8 percent respectively, whilst the Group's net non-performing loans ratio continued to be capped at below 1 percent.

Other operating income amounted to US$415 million in 2009, an increase of 11.4 percent, excluding the US$59.3 million one-off goodwill income from ING recorded in the previous year's other operating income. The growth was mainly due to higher income from the unit trust management business and investment income from securities held.