Public Bank Bhd. (PBK), Malaysia’s third- biggest lender by market value, reported a 4.1 percent increase in first-quarter profit as economic growth spurred domestic demand for loans.
Net income climbed to 968.3 million ringgit ($317 million), or 27.65 sen a share, in the three months ended March 31, from 930.2 million ringgit, or 26.56 sen a share, a year earlier, the lender said in a stock exchange filing today. It didn’t declare a quarterly dividend.
Malaysia’s economy has expanded by more than 4 percent for six straight quarters and is projected by the government to expand as much as 6 percent this year. This should benefit Kuala Lumpur-based Public Bank, which derived more than 90 percent of operating income last year from the Southeast Asian nation.
The bank “is expected to maintain its earnings momentum for the rest of 2013,” Chairman Teh Hong Piow said in a separate statement today. Growth in Malaysia’s economy this year will be “anchored by the continued resilience of domestic demand and supported by gradual improvement externally.”
Public Bank fell 0.1 percent to 16.30 ringgit before announcing its earnings during the midday trading break. Its shares have climbed 0.1 percent this year, underperforming a 0.7 percent advance in the benchmark FTSE Bursa Malaysia KLCI Index.
The Malaysian gauge is worst performer in Southeast Asia this year ahead of a tightly-fought general election early next month that could potentially see the first change in government in more than five decades.
The bank’s net interest income, the difference between what it makes from lending and pays on deposits, climbed 6.5 percent last quarter to 1.35 billion ringgit, according to the statement.
Net income from Islamic banking dropped 2.1 percent to 207.3 million ringgit, the filing showed. Allowances for impairment on loans more than doubled to 81.4 million ringgit, it said.
Malaysians will go to the polls on May 5. Prime Minister Najib Razak’s National Front coalition is seeking to extend its 55 years of unbroken rule in the face of a resurgent opposition led by Anwar Ibrahim.