Jun 2013) and marginal improvement in net interest margins. The company’s core profits grew
22% YoY to LKR 1.4bn benefiting from higher net interest income (+21% YoY), a growing insurance
business (+17% YoY) and reduction in cost-to-income ratios**. CAL anticipates FY14E core profits
to grow 11% YoY to LKR 5.7bn and net profits to decline 5% YoY to LKR 2.9bn, factoring in the
recently imposed cap on penal interest rate and higher impairment charges. CAL maintains a
HOLD on PLC due to stable core profits (+11% YoY) and an 8% dividend yield for FY14E.
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