Public Financial Holdings Limited 2025 Annual Report: Key Investor Insights

1. Return to Profitability and Dividend Resumption

Public Financial Holdings Limited (“PFHL” or “the Group”) has delivered a significant turnaround in its financial performance for the year ended 31 December 2025. The Group reported a profit after tax of HK\$79.7 million, a sharp recovery from a loss after tax of HK\$999.4 million in 2024, which was largely affected by a one-off goodwill impairment of HK\$810 million. Basic earnings per share for 2025 was HK\$0.07, compared to a loss per share of HK\$0.91 in 2024.

Importantly for shareholders, dividends have resumed: a first interim dividend of HK\$0.02 per share was paid in June 2025, and a second interim dividend of HK\$0.05 per share was declared in December 2025. The board has not recommended a final dividend, making the total dividend for 2025 HK\$0.07 per share (2024: Nil). Total dividends paid amounted to HK\$76.9 million. The resumption of dividend payments after a year of no dividends is a key positive signal for investors and may impact share valuation.

2. Financial Performance and Business Drivers

• Interest income decreased by 5.4% to HK\$1.94 billion, mainly due to lower market interest rates affecting loans and advances, as well as the HKD prime rate.
• Total interest expense decreased more sharply, by 26.3% to HK\$787.4 million, reflecting reduced funding costs on fixed deposits and improved funding mix.
• Operating income rose to HK\$1.44 billion from HK\$1.24 billion, with net interest income at HK\$1.15 billion (up from HK\$983 million).
• Operating expenses were HK\$957 million, a significant reduction from HK\$1.70 billion, mainly due to the absence of large impairment charges seen in 2024.
• Credit loss expenses decreased considerably to HK\$287 million from HK\$499 million.

The improvement in profitability was also attributed to prudent management of the net interest margin, cost controls, and a shift towards fee-based businesses. The Group continues to diversify revenue streams, focusing on long-term sustainable profit growth.

3. Business Segments and Key Investments

The Group’s main operating subsidiaries are Public Bank (Hong Kong) Limited, Public Finance Limited, and Winton (B.V.I.) Limited. The investment in Public Bank (Hong Kong) is of particular significance, representing HK\$6.59 billion or 78.2% of PFHL’s total assets. Public Bank (Hong Kong) focuses on retail and commercial banking, deposit-taking, stockbroking, bancassurance, and maintains a strategic balance between growth and risk.

Public Bank (Hong Kong) and its subsidiaries delivered a profit of HK\$153.4 million (return of 2.4% on PFHL’s investment), and contributed HK\$29.3 million in dividend income to the Group.

There are no material contingent liabilities or capital commitments, and no plans for significant capital expenditure or major investments in the near term—providing reassurance regarding the Group’s balance sheet and risk profile.

4. Digitalisation and ESG Initiatives

PFHL has aggressively pursued digital transformation. In 2025, it rolled out an enhanced mobile banking application for online customer onboarding and implemented electronic customer due diligence processes, reducing operational errors and processing time. The Group is committed to further digitalisation for productivity and cost efficiency.

On the ESG front, PFHL targets a Carbon-Neutral position for Scope 1 and Scope 2 emissions by 2030 and Net Zero Carbon by 2050. These sustainability goals and digital initiatives are likely to enhance the Group’s competitive position and appeal to ESG-focused investors.

5. Strong Corporate Governance and Risk Management

The Group emphasizes strong corporate governance, with full compliance with the Hong Kong Listing Rules and the Corporate Governance Code. Multiple specialised committees oversee areas including audit, risk, remuneration, and nomination. The Group’s governance policies focus on transparency, integrity, responsibility, and sustainability.

PFHL’s risk management framework covers credit, liquidity, market, and operational risks. The Group maintains a sound liquidity buffer (at least HK\$2 billion in eligible government securities) and a strong capital base, with capital adequacy and liquidity ratios well above statutory requirements.

6. Shareholder and Regulatory Developments

• As of 31 December 2025, Public Bank (Malaysia) and related parties remain the major shareholders, with a combined stake exceeding 73%.
• The public float is approximately 26.8%, and market capitalisation stood at HK\$1.49 billion (1,097,917,618 shares at HK\$1.36 per share).
• Amendments to the Company’s Bye-laws were approved in March 2025 to allow for treasury share holding, align with the latest regulatory requirements, and facilitate electronic communications.
• The Group confirmed full compliance with all applicable local and international regulations and has robust mechanisms for shareholders to call meetings, propose resolutions, and nominate directors.
• The next AGM is scheduled for 20 March 2026 at the Kowloon Shangri-La Hotel, Hong Kong.

7. Other Notable Points

• No share buybacks, sales, or treasury shares were conducted during the year, and there were no equity-linked agreements that could result in share issuance.
• Charitable donations increased substantially to HK\$5.04 million (2024: HK\$21,450), highlighting the Group’s commitment to social responsibility.
• Directors and substantial shareholders maintain significant interests in the company, with no reported changes that would impact control.

Conclusion: Key Potential Share Price Drivers

The return to profitability, resumption of dividends, strong risk and capital position, and commitment to digital transformation and ESG goals are all positive catalysts for the Group’s share price. The absence of material risks, new regulatory compliance, and a clear shareholder communications policy further strengthen the investment case. However, investors should note the highly concentrated shareholding structure and the Group’s cautious stance on new investments or capital expenditure.

The successful implementation of digital and sustainability initiatives, along with continued improvement in profitability and dividends, could drive further rerating of the shares.

Disclaimer: This article is based on the 2025 Annual Report of Public Financial Holdings Limited and is intended for informational purposes only. It does not constitute investment advice or a recommendation to buy or sell securities. Investors should conduct their own research or consult professional advisors before making investment decisions. Past performance is not indicative of future results.

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