一个不能被忽略的蓝筹股:PBBANK

回顾大众银行2007常年报告精华

Release of Public Bank 2007 Annual Report

The Public Bank 2007 Annual Report has been sent out to shareholders of Public Bank on 4 February 2008, together with the Notice of the 42nd Annual General Meeting of Public Bank to be held on 26 February 2008. A financial summary of the 2007 Annual Report was sent together with the 2007 Annual Report for the convenience of shareholders.

I am pleased to highlight some of the contents of the Public Bank 2007 Annual Report.

Letter to Stakeholders

In the Letter to Stakeholders in the 2007 Annual Report, the Board of Directors has provided a summary of the Public Bank Group’s financial performance, its strategic business direction, its commitment to the delivery of superior shareholder value as well as caring for the Group’s customers, staff and the community it serves.

Total assets of the Public Bank Group increased by 17.8% to reach RM174.2 billion as at the end of 2007. The strong expansion of the balance sheet was driven by strong organic business growth in both the Group’s domestic operations as well as its overseas operations. The Group’s net return on equity has improved from 21.9% in 2006 to 26.3% in 2007.

Delivery of superior shareholder value is highlighted as follows:

The interim dividend of 25 sen per Public Bank share paid in August 2007, together with the final dividend of 40 sen and special dividend of 10 sen proposed by the Board of Directors, will mean that Public Bank shareholders will receive net dividends totaling RM1.85 billion for 2007, representing 87% of the Public Bank Group’s net profit attributable to equity holders.
Since 2004, Public Bank has maintained a high dividend payout ratio of close to or over 90% of the Group’s net profit attributable to equity holders.

A shareholder who purchased 1,000 Public Bank (Local) shares at RM4.54 per Public Bank (Local) share at the beginning of 2003 and held it for 5 years to the end of 2007 would have received gross dividends totaling RM3,955 over the 5-year period and would have 1,250 Public Bank (Local) shares as at the end of 2007. This is equivalent to an exceptionally high annual return on investment of 36.4% for each of the 5 years from 2003 to 2007 based on the share price of RM11.00 per Public Bank (Local) share as at the end of 2007.

A shareholder who bought 1,000 Public Bank shares when it was listed in 1967, and assuming the shareholder had subscribed for all the rights issues to date and had not sold any of the Public Bank shares would have 129,730 Public Bank shares worth RM1,427,030 based on the Public Bank (Local) share price of RM11.00 at the end of 2007 and received a total gross dividend of RM487,902 over the 40-year period. This works out to a remarkable annual rate of return on investment of 20.6% for each of the 40 years since Public Bank was listed in 1967.

Corporate Governance

The Board of Directors of Public Bank not only adheres to the principles of corporate governance but well exceeds mandatory requirements, particularly in terms of the extent and timeliness of corporate disclosure and financial reporting.

The release of the 2007 Annual Report on 4 February 2008 is 12 days earlier as compared to the release of the 2006 Annual Report on 16 February 2007 and is well in advance of the deadline set by the Listing Requirements of Bursa Malaysia Securities Berhad of 30 June 2008.
Public Bank’s culture of accountability, transparency, integrity, professionalism and responsible corporate conduct had been recognised in 2007 by the following awards:

Public Bank was ranked No. 1 in corporate governance amongst the top 500 companies listed on Bursa Malaysia Securities Berhad, for the third consecutive year, in the Corporate Governance Survey Report 2007, a joint study by the Minority Shareholder Watchdog Group and the Nottingham University Business School.

Public Bank received the Platinum Award in the Overall Excellence Award (for the most outstanding annual report of the year) in the National Annual Corporate Report Awards (“NACRA”) 2007, the Platinum Award for the Best Annual Report in Bahasa Malaysia as well as the NACRA 2007 Industry Excellence Award for the Finance Sector.

Public Bank received the Malaysian Business Corporate Governance Award 2006 by Malaysian Business magazine for the fifth consecutive year.

Chairman’s Review

The Chairman’s Review covers an analysis of the Public Bank Group’s financial performance, the Group’s performance benchmarked against the Malaysian banking industry as well as against leading regional banking groups, the capital management initiatives undertaken, the ratings of Public Bank and a comprehensive review of the Group’s business operations.
Highlights from the Chairman’s Review include the following:

The Public Bank Group achieved a growth of 24.3% in pre-tax profit to reach RM3.00 billion in 2007. The Group’s net profit attributable to shareholders increased by 23.0% to RM2.12 billion, driven by continued strong loan and deposit growth, further improvement in asset quality and strong growth in fee-based income.

The Group’s net return on equity rose to 26.3% in 2007 compared to 21.9% in 2006, and earnings per share improved to 63.3 sen from 52.1 sen in 2006.

The Group’s gross loans increased by RM17.1 billion to stand at RM101.4 billion as at the end of 2007, representing a growth rate of 20.2% as compared to 8.8% for the banking industry in 2007. As a result, the Group’s domestic market share of loans increased to 14.4% as at the end of 2007 as compared to 13.2% as at the end of 2006.

The Group’s customer deposits rose by RM27.0 billion or 24.1% in 2007 to reach RM138.8 billion as at the end of 2007, with individual depositors accounting for 70% of the Group’s demand, savings and fixed deposits.

The Group’s asset quality improved further in 2007 and was evidenced by the deccrease in the Group’s gross non-performing loans (“NPL”) by RM174 million or 11.0% in 2007 despite the strong loan growth. The Group’s gross and net NPL ratios improved to 1.4% and 1.2% respectively as at the end of 2007 as compared to 1.9% and 1.6% respectively a year earlier.
The Group’s wholly-owned unit trust management subsidiary, Public Mutual, increased its net asset value of funds under management by 75% during the year to RM28.4 billion as at the end of 2007 and commanded a strong market share of 40.0% as at the end of 2007, up from 27.6% as at the beginning of 2006. Total unit trust sales also surged to a record high of RM13.1 billion in 2007, more than three times the total unit trust sales achieved in 2006 through the launch of 21 new funds in 2007, bringing the number of funds managed by Public Mutual to 55 funds as at the end of 2007.

The Group’s profit from its overseas operations recorded a 32% increase to RM436 million in 2007, with Public Financial Holdings Group in Hong Kong and Cambodian Public Bank in Cambodia being the main contributors, registering growth in pre-tax profit of 32% and 65% respectively. The Group’s commercial bank in Hong Kong, Public Bank (Hong Kong) Limited achieved strong loan and deposit growth of 51% and 44% respectively. Cambodian Public Bank also recorded impressive growth in loan and deposit of 130% and 59% respectively as a result of rapid expansion of its lending and deposit-taking activities.

The Group entered into a 10-year exclusive bancassurance distribution agreement with the ING Group to provide life insurance and health insurance products and investment-linked insurance products to the customers of the Group in Malaysia and in Hong Kong. This agreement came into effect on 1 January 2008 and the Group was paid a goodwill payment of EUR41.2 million, equivalent to approximately RM200 million by ING Group. This regional strategic alliance is expected to boost the Group’s fee-based commission income in the medium-to-longer-term.
The strong capital position of the Public Bank Group was reflected in its risk-weighted capital ratio of 13.6% as at the end of 2007 which was well above the statutory requirement of 8.0%.
Public Bank has a AAA rating from Rating Agency Malaysia (“RAM”) which is the highest rating given by RAM. Public Bank is one of the only two Malaysian banks with a single A rating by Standard & Poor’s and is assigned a Bank Financial Strength Rating of C from Moody’s Investors Service.

Tan Sri Dato’ Sri Dr. Teh Hong Piow

Chairman

Press Release 4 February 2008