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163Chairman’s Review – OverviewBenchmarking Against Banking Industry’s PerformanceProductivityIn an environment of intense competition and narrowingnet interest margin, only the most efficient banks will beable to deliver consistently strong shareholder returns.The Public Bank Group with its reputed disciplinedapproach to cost management continued to review andimprove its business processes to further enhanceefficiency and productivity.The Group’s pre-tax profit per employee, gross loans peremployee and deposits per employee grew by 3.9%,10.9% and 11.9% to RM290,000, RM11.2 million andRM12.8 million respectively as at the end of 2012 andcontinued to rank No. 1 in terms of productivity peremployee amongst its domestic commercial banking peers.Asset QualityThe Public Bank Group has consistently maintained itstop ranking position in terms of asset quality amongst itsdomestic peers.The Group’s gross impaired loans ratio continued itsdownward trend to 0.7% as at the end of 2012 from0.9% a year ago, which was approximately one-third theindustry average of 2.0% as at the end of 2012.The Group’s loan loss coverage stood at 126.0% as atthe end of 2012, an improvement from 113.8% as at theend of 2011 and higher than the industry average of100.9% as at the end of 2012.The tables below compare the key financial indicators of the Public Bank Group with those of the key domestic banks inMalaysia as well as leading regional banks in the Asia Pacific (“AP”) region.Comparison Against Key Domestic BanksBanksNet Returnon Equity%Cost toIncomeRatio%GrossImpairedLoans Ratio%LoanLossCoverage%Public Bank Group 24.5 30.5 0.7 126.0MalaysiaMalayan Banking Berhad 16.3 48.7 1.9 104.7CIMB Group Holdings Berhad 16.3 55.8 4.2 84.0RHB Capital Berhad 15.0 45.5 3.1 70.3Hong Leong Bank Berhad 16.0 44.2 1.6 134.3AMMB Holdings Berhad 14.7 42.4 2.2 121.8* The key financial indicators of the other key domestic banks in Malaysia are based on their latest published results.The Public Bank Group continued to be in the forefront amongst its banking peers in Malaysia in terms of profitability, assetquality and cost efficiency with the highest return on equity of 24.5% and lowest gross impaired loans ratio of 0.7% as wellas lowest cost to income ratio of 30.5%.