Commercial Bank of Ceylon PLC (COMB.N0000) – 2014 results

Melissa Pereira Tue Jun 09, 2015 5:26 pm

COMB records solid growth in loan book and net interest income: COMB’s gross loan portfolio grew 23% YoY (well above the industry average of 14% YoY), supported by the improved performance of both corporate and personal loan portfolios. As a result, net interest income increased 5% YoY in 2014, despite the 76bps drop in NIMs to 4.1%. Non-interest income, up 14% YoY, also supported top-line growth.

 Asset quality continued to improve: COMB’s impairment charges reduced to LKR4.9bn in 2014 from LKR5.2bn a year earlier, while the gross NPA ratio declined to 3.5% in 2014 from 3.9% in 2013 owing to slow non-performing advances and improved credit quality.

 Bottom line up 6% YoY: COMB posted net income of LKR11.2bn, recording a 6% YoY increase, while EPS improved to LKR12.95 in 2014 from LKR12.22 in 2013.

 Valuation: We maintain our current valuation multiples of 1.9x-2.2x P/B, and rolling over to 2015E BVPS and EPS values yields a valuation range of LKR163-191. COMB’s share price has run up significantly along with the recent market upswing. The BFI sector P/BV has increased to 1.7x from 1.4x in 2014 and the sector P/E has increased to 13x, from 9x a year ago, rising ahead of the market P/E to 19x from 16x in March 2014.

Please refer link for more details

- https://drive.google.com/open?id=0B6oYIOgoj7LDZW5WMlhoTTZJTWs&authuser=0