Company Coverage
Public Bank (PBK MK): 3Q26: Below Forecasts Due To NIM Pressure And Higher Credit Cost
HOLD (Maintained)
Current price:
Target price:
Upside:
Previous TP :
RM4.90
RM5.20
6.2%
RM5.45
Analyst
Highlights
3Q26 earnings were marginally below expectations due to higher-than-expected credit cost.
Maintain HOLD, with a lower target price of RM5.20 (1.64x 2027F P/B; ROE: 12.5%) from RM5.45 following our earnings revisions.
Even factoring in potential special dividends of up to RM3.5b, subject to BNM approval, the stock’s dividend yield remains broadly in line with peers. As such, we believe the current valuation adequately reflects its capital return prospects, which were the key catalyst to its share price performance.
Analysis
Marginally below expectations. Public Bank delivered 3Q26 net profit of RM1.77b (-3.8% yoy, -2.8% qoq), bringing 9M26 earnings to RM5.34b (flattish yoy). 3Q26 earnings came in below expectations, with 9M26 earnings accounting for 72% and 73% of our and consensus full-year estimates, respectively. The earnings shortfall was primarily attributable to higher-than-expected credit costs, largely pre-emptive in nature to account for potential macro shocks.
Highlights
3Q26 earnings were marginally below expectations due to higher-than-expected credit cost.
Maintain HOLD, with a lower target price of RM5.20 (1.64x 2027F P/B; ROE: 12.5%) from RM5.45 following our earnings revisions.
Even factoring in potential special dividends of up to RM3.5b, subject to BNM approval, the stock’s dividend yield remains broadly in line with peers. As such, we believe the current valuation adequately reflects its capital return prospects, which were the key catalyst to its share price performance.
Analysis
Marginally below expectations. Public Bank delivered 3Q26 net profit of RM1.77b (-3.8% yoy, -2.8% qoq), bringing 9M26 earnings to RM5.34b (flattish yoy). 3Q26 earnings came in below expectations, with 9M26 earnings accounting for 72% and 73% of our and consensus full-year estimates, respectively. The earnings shortfall was primarily attributable to higher-than-expected credit costs, largely pre-emptive in nature to account for potential macro shocks.
HOLD (Maintained)
Current price:
Target price:
Upside:
Previous TP :
RM4.90
RM5.20
6.2%
RM5.45
Analyst
IMPORTANT NOTICE - DISCLOSURES AND DISCLAIMERS
This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at this link, which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
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