2012 BANKING SECTOR EARNINGS UPDATE
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2012 BANKING SECTOR EARNINGS UPDATE
Antonym Fri Mar 08, 2013 10:04 am
The larger banks outperformed smaller banks in 2012 as the 18% credit ceiling restricted loan growth and rising interest rates tightened net interest margins for the aggressive smaller banks.
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.
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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