Recently, fractal and subband coding were combined to achieve good picture quality at very low bit rates, and the technique was named predictive pyramid coding (PPC) [5]. In this paper, we improve PPC performance by utilizing the inter-subband correlation between different groups of subbands. As a result, we can reduce the bit rate by 0.0110.043 bpp without degrading the coded picture quality, or we can increase the coded picture quality by 0.290.63 dB without increasing the bit rate.