Public Financial Holdings Flags HK$1.9–2.0 Billion FY-2026 Loss on HK$1.96 Billion Goodwill Impairment

Bulletin Express
10/16

Public Financial Holdings Limited has issued a profit warning, projecting a loss after tax of HK$1.90–2.00 billion for the financial year ending 31 December 2026, a sharp reversal from the HK$80.00 million profit recorded in 2025.

The anticipated downturn is driven primarily by a full impairment of goodwill amounting to HK$1.96 billion. Management attributes the write-down to two factors: (1) a surge in long-term market interest rates since 3Q 2026, which increased the discount rate applied in goodwill testing; and (2) lower medium-term cash-flow forecasts due to higher funding costs and pressure on net interest margins, as much of the Group’s lending book is tied to fixed rates or to the relatively stable Hong Kong dollar Prime Rate.

The goodwill impairment, a non-cash item booked only at the Group level, will reduce consolidated assets and net assets by HK$1.96 billion, equivalent to roughly HK$1.80 per share. It will not affect operational cash flows or the regulatory capital positions of the Group’s key subsidiaries—Public Bank (Hong Kong) Limited and Public Finance Limited.

Notwithstanding the projected loss, capital buffers remain well above statutory requirements. The Public Bank (Hong Kong) Group’s consolidated Common Equity Tier 1 Capital Ratio and Total Capital Ratio exceed 25.50 percent and 26.50 percent, respectively, while the Liquidity Maintenance Ratio and Core Funding Ratio stand above 60 percent and 150 percent.

The profit warning constitutes a profit forecast under Rule 10 of the Hong Kong Takeovers Code and will be reviewed by the Company’s independent financial adviser and auditors. The figures are derived from unaudited management accounts for the nine months to 30 September 2026 and internal projections for 4Q 2026; they remain subject to further verification.

Investors are reminded that the planned privatisation of Public Financial Holdings by Public Bank Berhad via scheme of arrangement is still contingent on fulfillment of all conditions precedent and may not proceed. The Board advises shareholders and potential investors to exercise caution when dealing in the Company’s securities.

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