PUBLIC Bank Bhd recorded an all-time high net profit of RM3.48 billion last year, which is 14.3 per cent more than the RM3.05 billion recorded in 2010, thanks to higher income from its Islamic banking business. This is despite the bank having to contend with operational cost swelling five per cent to RM108.4 million from hiring more people to cope with higher business volume. In its filing to the stock exchange, Public Bank attributed the improved profits to higher net interest and net income from Islamic banking business by nine per cent to RM464.6 million. An eight per cent growth, or RM87.1 million, in net fee and commission income also contributed to the satisfactory bottomline. Public Bank also justified the good performance to lower impairment allowance on loans by 10 per cent to RM65.5 million, despite the 1.5 per cent collective impairment allowance set aside for the strong loan growth. "In view of the Public Bank Group's strong performance for the year, we are pleased to announce a second interim single-tier dividend of 28 sen," said the bank's founder and chairman Tan Sri Dr Teh Hong Piow. "Together with the first interim single-tierdividend of 20 sen that was paid in August last year, the total dividend for 2011 is 48 sen," he said in a statement yesterday. Public Bank's balance sheet growth indicators remained healthy. Gross loans as at the end of 2011 stood at RM177.7 billion, representing a growth of 13.5 per cent from a year ago. Domestic loan book grew at a faster pace of 14.1 per cent. Customer deposits grew by 13.3 per cent to RM200.4 billion as at the end of 2011, while domestic customer deposits grew by 14.7 per cent. As Malaysia's third largest domestic bank by market capitalisation, Public Bank is supported by large domestic depositor base of more than 4.5 million customers. Teh said both fixed and savings deposits grew by 10.4 per cent, outperforming the Malaysian banking industry's growth rate of 9.8 per cent and 7.9 per cent, respectively. Public Bank also continues to command the highest market share for the private sector unit trust business. Teh said the bank's wholly owned unit Public Mutual showed commendable performance by growing its net assets to RM44.8 billion, accounting for an overall market share of 44 per cent. On current outlook for the year, Teh said global economic conditions was likely to be increasingly challenging. However, he added that growth momentum in Asia, including Malaysia, would be supported by resilient domestic demand. However, he added that growth momentum in Asia, including Malaysia, would be supported by resilient domestic demand. When commenting on Public Bank's overseas investments, Teh said the bank had hedged its foreign currency exposure. "We are not expected to be susceptible to foreign exchange fluctuations." On home loans, Teh assured investors that the introduction of new preemptive regulatory measures, including the loan-to-value ratio cap on financing of the third residential property and guidelines on responsible financing, were unlikely to impact its growth in the domestic retail operations as its existing stringent lending practices had already incorporated such measures. Public Bank's domestic hire purchase segment is dependent on the growth of the automotive industry in Malaysia. In 2012, the automotive industry is expected to experience minimal to flat growth in vehicle sales. However, Teh said the bank was hopeful of moderate growth and maintaining its lead market share position in the passenger vehicle financing business.