Public Bank Bhd
KLSE:PBBANK
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Intrinsic Value
The intrinsic value of one PBBANK stock under the Base Case scenario is 5.33 MYR. Compared to the current market price of 4.43 MYR, Public Bank Bhd is Undervalued by 17%.
The Intrinsic Value is calculated as the average of DCF and Relative values:
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Public Bank Bhd
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Fundamental Analysis
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Public Bank Bhd, established in 1966, has emerged as one of Malaysia's most prominent and reliable financial institutions, consistently demonstrating robust performance and solid growth. The bank was founded with a vision to provide affordable banking services to the masses, and it has successfully evolved into a market leader in retail banking and financing. With its comprehensive suite of services, ranging from personal banking to corporate financing, Public Bank has cultivated a reputation for excellent customer service and prudently managed risk, contributing to its impressive profitability and low non-performing loan ratios. The bank's conservative lending practices, coupled with a stro...
Public Bank Bhd, established in 1966, has emerged as one of Malaysia's most prominent and reliable financial institutions, consistently demonstrating robust performance and solid growth. The bank was founded with a vision to provide affordable banking services to the masses, and it has successfully evolved into a market leader in retail banking and financing. With its comprehensive suite of services, ranging from personal banking to corporate financing, Public Bank has cultivated a reputation for excellent customer service and prudently managed risk, contributing to its impressive profitability and low non-performing loan ratios. The bank's conservative lending practices, coupled with a strong capital base, have positioned it well in the competitive landscape, attracting investors looking for stability and growth.
As an investor eyeing opportunities within the financial sector, Public Bank Bhd stands out for its consistent dividend payouts and commitment to shareholder value. Its strategic focus on expanding its customer base through innovative products and digital banking initiatives, paired with a dedication to enhancing operational efficiency, sets a solid foundation for future growth. The bank's resilience is further evidenced by its adaptability in navigating economic challenges, supported by a strong management team skilled in balancing risk and reward. With a rich history of delivering sustainable earnings and a poised outlook for continued expansion, Public Bank Bhd presents an appealing option for investors seeking a reliable and well-established player in the banking sector.
Public Bank Berhad, one of the largest banks in Malaysia, operates through several core business segments that contribute to its overall financial performance. Here are the primary segments:
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Retail Banking:
- This segment caters to individual customers and small-to-medium enterprises (SMEs). It provides a wide range of banking products and services including savings accounts, fixed deposits, personal loans, housing loans, and credit cards.
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Corporate Banking:
- Public Bank offers various services tailored for corporate clients. This includes working capital financing, term loans, trade financing, and treasury services. The segment serves larger enterprises and helps facilitate their operational financing needs.
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Investment Banking:
- In this area, Public Bank provides services such as underwriting, mergers and acquisitions advisory, and capital markets services. It focuses on helping businesses raise capital and providing strategic financial advice.
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Islamic Banking:
- Public Bank also offers Islamic banking products and services that comply with Shariah law. This includes accounts, financing products, and investment services that align with Islamic principles.
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Insurance and Wealth Management:
- The bank provides insurance products, including life and general insurance, and wealth management services, which encompass investment products, portfolio management, and advisory services for high-net-worth individuals.
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Asset Management:
- Through its subsidiaries, Public Bank engages in asset management by offering unit trusts and investment funds, catering to individual and institutional investors looking for diversified investment options.
These segments collectively enable Public Bank Berhad to serve a diverse clientele while maintaining a strong presence in the Malaysian banking landscape. The bank's focus on prudent risk management and customer service has contributed to its sustained growth and profitability over the years.
Public Bank Bhd, one of the leading financial institutions in Malaysia, has several unique competitive advantages over its rivals:
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Strong Retail Banking Focus: Public Bank has a well-established retail banking operation, which contributes significantly to its revenue. Its focus on consumer banking services allows it to capture a large market share, particularly in housing loans and personal financing.
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Low Operating Costs: The bank has a reputation for operating efficiently with lower costs compared to many of its competitors. This efficiency allows Public Bank to offer competitive pricing on loans and better returns on deposits.
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Asset Quality: Public Bank has maintained a low non-performing loan (NPL) ratio, reflecting strong credit risk management. This strong asset quality enhances its profitability and investor confidence.
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Brand Reputation and Trust: With a long-standing history and a solid reputation in the Malaysian banking sector, Public Bank enjoys high customer trust and loyalty. This brand equity is a significant advantage in attracting and retaining customers.
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Diverse Product Offering: Public Bank has a comprehensive range of financial products and services that cater to various customer segments, from retail consumers to corporate clients, thus diversifying its revenue streams.
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Strong Capital Position: The bank has consistently maintained a strong capital base, which provides a buffer during economic downturns and supports further growth and expansion initiatives.
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Technological Advancements: Public Bank has invested in enhancing its digital banking services, enabling it to compete effectively against fintech and other digital banking services. This focus on technology helps improve customer experience and operational efficiency.
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Geographic Presence: While primarily focused on Malaysia, Public Bank also has a presence in other countries, which helps in diversifying its revenue streams and accessing new markets.
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Customer-Centric Approach: Public Bank emphasizes strong customer service and relationship management, which enhances customer satisfaction and retention rates.
These advantages position Public Bank Bhd favorably against its competitors within the Malaysian banking sector and contribute to its overall stability and growth.
Public Bank Bhd, like many financial institutions, is likely to face a variety of risks and challenges in the near future. Below are some potential areas of concern:
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Economic Uncertainty: Fluctuations in economic conditions due to factors such as inflation, interest rates, and geopolitical tensions can impact lending and borrowing activities.
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Credit Risk: An increase in non-performing loans (NPLs) due to a potential economic downturn can significantly affect profitability. The bank must manage its credit portfolio wisely to mitigate this risk.
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Regulatory Changes: Regulatory environments can change, affecting capital requirements, consumer protection laws, and compliance obligations. Keeping up with these changes and ensuring compliance is crucial.
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Digital Disruption: The rise of fintech companies and digital banking can pose a competitive threat. Public Bank needs to innovate and enhance its digital offerings to retain and attract customers.
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Cybersecurity Threats: As banking increasingly moves online, the risk of cyber-attacks becomes more significant. Ensuring robust cybersecurity measures will be essential to protect customer data and maintain trust.
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Market Competition: Intense competition from both traditional banks and new entrants in the market can impact Public Bank’s market share and profitability.
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Interest Rate Fluctuations: Changes in interest rates can affect net interest margins. This risk requires careful asset-liability management.
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Operational Risks: This includes risks related to internal processes, systems, and people. Improving operational resilience and efficiency is vital for sustained performance.
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Geopolitical Issues: Any regional or global political instability could have adverse impacts on economic stability, affecting banking operations and customer behavior.
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Environmental, Social, and Governance (ESG) Factors: Increasing focus on sustainability and responsible banking practices necessitates a strategic response to integrate ESG factors into business operations and lending practices.
To navigate these challenges, Public Bank Bhd will need to employ robust risk management strategies, invest in technology, and maintain strong governance practices. Regularly reviewing and adapting its business model will be key to maintaining a competitive edge in the evolving banking landscape.
Balance Sheet Decomposition
Public Bank Bhd
Net Loans | 406.9B |
Investments | 94.4B |
PP&E | 2.5B |
Intangibles | 2.6B |
Other Assets | 19.1B |
Total Deposits | 439B |
Short Term Debt | 2.3B |
Long Term Debt | 17.3B |
Other Liabilities | 10.8B |
Wall St
Price Targets
PBBANK Price Targets Summary
Public Bank Bhd
According to Wall Street analysts, the average 1-year price target for PBBANK is 5.27 MYR with a low forecast of 4.44 MYR and a high forecast of 5.88 MYR.
Dividends
Current shareholder yield for PBBANK is .
Shareholder yield represents the total return a company provides to its shareholders, calculated as the sum of dividend yield, buyback yield, and debt paydown yield. What is shareholder yield?
Profile
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Description
Public Bank Bhd.engages in the provision of commercial banking services. The company is headquartered in Kuala Lumpur, Wilayah Persekutuan. The Company’s segments include Hire Purchase, Retail Operations, Corporate Lending, Treasury and Capital Market Operations, Investment Banking, Fund Management, and Others. The firm provides a suite of financial products and services, which includes personal banking, commercial banking, Islamic banking, investment banking, share broking, trustee services, nominee services, sale, and management of unit trust funds as well as bancassurance and general insurance products. The company provides domestic consumer banking, including residential property financing, passenger vehicle hire purchase financing, personal consumer financing, credit and debit cards, share margin financing, and customer deposits. The company provides PB Dual Currency Investment (PB DCI), which is a short-term currency-linked structured product investment.
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The intrinsic value of one PBBANK stock under the Base Case scenario is 5.33 MYR.
Compared to the current market price of 4.43 MYR, Public Bank Bhd is Undervalued by 17%.