RM1bil impairment unlikely to affect Public Bank's capital-return plan

Public Bank Bhd's RM1 billion goodwill impairment at its Hong Kong operations is unlikely to significantly impact its RM3.5 billion capital-return plan, according to CIMB Securities Sdn Bhd. The non-cash charge could reduce the bank's consolidated earnings per share and net assets per share by four sen each for the financial year 2026.

Despite the impairment, CIMB Securities expects limited impact on Public Bank's regulatory capital, dividend capacity, and underlying operations, as goodwill is already deducted when calculating Common Equity Tier 1 capital. The research firm maintains a Buy rating on Public Bank but lowered its target price to RM5.35 from RM5.50 due to downward revisions to earnings forecasts and a weaker net interest margin outlook.

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