Public Bank Net Profit Forecast Lowered by $100m Due to Hong Kong Subsidiary Loss

Public Bank Bhd is projected to see a 5.5% decline in net profit for 2026, reaching approximately $1.7 billion. This downward revision is primarily driven by an anticipated loss of $242.6 million to $254.9 million at its Hong Kong subsidiary, Public Financial Holdings (PFH).

The loss stems from a $249.7 million goodwill write-off, with Public Bank’s share estimated at $183.3 million. Despite this impairment, the bank’s core business remains profitable, with underlying net profit expected to grow by 2.4%.

Capital ratios are forecast to remain stable between

Management indicates that the write-off will not impact operating cash flow or the financial stability of core banking operations. Capital ratios are forecast to remain stable between 14% and 15%, supporting the bank's commitment to a 60% dividend payout ratio and planned special dividends through 2028.

Public Bank continues its strategy to privatize PFH for approximately $93 million, with completion expected by the first half of 2027. Risks to the earnings outlook include potential loan growth deceleration, asset quality deterioration, and heightened market competition.