Public Bank sees minimal credit exposure to US Tariff risks

New Straits Times

08-05-2025

KUALA LUMPUR: Public Bank Bhd sees minimal credit exposure to potential United States (US) tariff risks, estimating that less than three per cent of its total loans may be affected with asset quality expected to remain stable.
Managing director and chief executive officer Tan Sri Tay Ah Lek said the bank acknowledged shareholders' concerns over the ongoing uncertainty surrounding US trade policies and their implications on Malaysia's economy and the bank.
"As for Public Bank, our credit exposure to borrowers who may be directly impacted is not significant.
"It is estimated that less than three per cent of total loans may be affected. Hence, asset quality is expected to remain stable," he said during a question-and-answer session at the bank's 59th annual general meeting (AGM) today.
Tay noted that the banking sector is unlikely to face direct fallout from potential US tariffs, but may be affected indirectly if broader economic conditions deteriorate as a result of trade tensions.
He added that the tariff hikes are currently on hold, offering temporary relief.
"We are confident that we will continue to sail through the current uncertainty from a position of strength.
"As for our regional operations, the respective governments are currently negotiating and exploring strategies to mitigate the potential adverse impact," he said.
While the final outcome remains uncertain, Tay said the bank has already taken precautionary measures to ensure greater prudence in its lending activities.
In another development, Tay said Public Bank is targeting a higher dividend payout of 60 per cent of the group's net profit for the financial year 2025 (FY2025), depending on the financial performance, capital conservation and also subject to regulatory approval.
In FY2024, the bank paid total dividends of RM4.08 billion, representing 57 per cent of its net profit, or 21 sen per share.
During the AGM, shareholders approved all five resolutions tabled.
It was chaired by chairman Lai Wan and attended by the board of directors, members of senior managements and shareholders.