Larger banks continued to improve net interest margins benefiting from their larger CASA base and access to foreign funding whilst branch consolidation led to an improvement in cost-to-income ratios.
Asset quality of COMB and HNB also improved in 2012 due to reducing NPL's and increasing provision coverage.
SL banks still look attractive with a 0.9x-1.7x P/BV, 6-11x PER and 3-7% dividend yields on 2012 financials. CAL maintains a BUY on COMB and HNB.
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