Public Bank tops banking peers with 12.2pct ROE
KUALA LUMPUR: Public Bank Bhd delivered the strongest results among its peers in the second quarter (Q2) of 2026, as Malaysia's banking sector posted stronger earnings despite persistent pressure on net interest margins (NIMs).
Public Bank Bhd outperformed its banking peers in the second quarter of 2026, boasting the highest return on equity at 12.2%, according to CIMB Securities Sdn Bhd. The Malaysian bank's core net profit increased by 3.7% year-on-year in Q2 and 2% in the first half of 2026. Its asset quality remained robust, with a gross impaired loan ratio of 0.54%, and its cost-to-income ratio of 35.1% was the lowest among its peers.
Hong Leong Bank Bhd followed closely, with its pre-provision operating profit rising 13.6% quarter-on-quarter and 8.6% year-on-year in 2026, supported by strong loan growth and cost efficiency. Other banks, including Affin Bank Bhd, missed expectations, with Affin Bank's net credit cost exceeding guidance. The firm anticipates positive fund-based income growth in Q3, driven by a healthy credit pipeline and domestic investment activity, but notes that tighter funding conditions could make loan growth more challenging.
CIMB Securities forecasts steady NIMs of 2% in both 2026 and 2027, and 2.01% in 2028, attributing this to an improving funding mix and pricing discipline.
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