● National Development Bank's (NDB) net profit has risen by a sharp 75% YoY to LKR615.9 mn in 3Q2009 enabling the cumulative 1-3Q2009 net earnings to increase by 50% to LKR1,600.2 mn.
● The net profit growth in 3Q2009 is ahead of our forecast and was driven by other income (including equity income, capital gains, fee income and forex income) growing by 75% YoY, net interest income increasing by 16% YoY and a 18% YoY dip in total provisioning cost.
● The bank has grown its deposit base by 52% YoY to LKR43.5 bn, continues to benefit from the highest quality loan book with net NPL ratio of 0.88% and is well capitalized with Tier 1 capital adequacy ratio (CAR) of 19.3% and Total CAR of 22.9%.
● Further with other income (mainly capital gains from the Treasury portfolio and equity income) having grown faster than initially projected, the forecast 2009 net profit is revised up by 26% to LKR2,130 mn whilst the projected 2010 net earnings (expected to be derived chiefly from core bank ing income) is maintained at LKR1,951 minute
● Therefore the share continues to be good value trading on 7.0X expected 2009 EPS, 7.6X forecast 2010 EPS and 1.1X PBV.
Wednesday, November 25, 2009
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