3 Things Investors Should Know About Malaysia’s 2nd Largest Bank, Public Bank Berhad

There are really only three banks in Singapore’s stock market, namely, DBS Group Holdings Ltd (SGX: D05), Oversea-Chinese Banking Corp Limited (SGX: O39), and United Overseas Bank Ltd (SGX: U11).

But across the causeway from Singapore, there are many other banks listed in Malaysia’s stock market, Bursa Malaysia. One such bank is Public Bank Berhad (KLSE: 1295.KL), Malaysia’s second largest bank by market capitalistion.

Here are three pieces of information about Public Bank that investors may find useful:

1. Consistent profitability over the past decade

One of the biggest financial and economic stories of the past 10 years was the Great Financial Crisis of 2007-09. During that episode, many Western banks collapsed or were on the brink of failing.

Public Bank's profit table
Source: S&P Global Market Intelligence

But, as you can see in the table above, Public Bank had remained solidly profitable from 2005 to 2015. In that time frame, the bank also managed to grow its profit by nearly 250%, representing a compound annual growth rate of an impressive 13.2%.

2. A history of growing dividends

Public Bank has also been sharing the spoils with its investors. Its ordinary dividend has increased in nearly each year over the past decade, rising from RM0.288 per share in 2005 to RM0.56 per share in 2015.

Public Bank's dividend table
Source: S&P Global Market Intelligence

The bank has a dividend yield of 2.9% with its 2015 dividend and current share price of RM19.44.

3. A historically low valuation

Public Bank currently has a price-to-book ratio of 2.4. This is high when compared to the three aforementioned banks in Singapore (they have PB ratios of 1 or less) as well as other big banks in Malaysia such as  CIMB Group Holdings Bhd (KLSE:1023.KL), which is priced at less than 1 times book value.

But, the chart below shows that Public Bank’s PB ratio at the moment is actually near a five-year low.

Public Bank price-to-book (PB) ratio since 4 July 2011
Source: S&P Global Market Intelligence

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.