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PBBANK 1295 PUBLIC BANK BERHAD to take a hit in 2023-2024 on weaker loan growth?

The firm said it had lowered Public Bank's earnings by 4.3 per cent and 4.8 per cent respectively for 2023 and 2024, as inflationary pressures due to elevated commodity prices, higher wages and weaker consumption might drive down business risk appetite an

KUALA LUMPUR: Public Bank Bhd's earnings and non-interest income are expected to take a hit in 2023 and 2024 on weaker loan growth, Affin Hwang Capital said.

The firm said it had lowered Public Bank's earnings by 4.3 per cent and 4.8 per cent respectively for 2023 and 2024, as inflationary pressures due to elevated commodity prices, higher wages and weaker consumption might drive down business risk appetite and hurt consumer sentiment.

"Prior to this, we had factored in the impact of two rate hikes for 2022 (25 basis points each) last February, and we believe that the catalyst had been priced in," it said in a note today.

In the first quarter (Q1), Public Bank reported a flat pre-tax profit at RM1.4 billion, within the firm's and consensus estimates.

Affin Hwang said the results were driven by the impact of considerably lower provisions.

At the net profit level, the impact of the prosperity tax further weighed down earnings to RM1.4 billion.

Affin Hwang has maintained its "Hold" call on Public Bank, with a lower target price of RM4.80 from the previous RM5.40.

"Public Bank remains the most defensive among peers.

"In the second half of 2022, net credit cost and overheads may likely creep up, loan growth may moderate while competition in loans and deposits may intensify," it said.


https://www.nst.com.my/business/2022/05/800952/public-bank-take-hit-2023-2024-weaker-loan-growth

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