Nations Trust Bank's (NTB) net profit has grown by 5% YoY to LKR181.2 mn in 4Q2009 supporting the 2009 net earnings to grow by 16% YoY to LKR 686.1 mn.
The net profit growth in the last quarter is in line with our forecast and was mainly driven by a 23% YoY increase in net interest income and a 8% YoY reduction in operating cost.
NTB enjoys a cost/income ratio of 59% and the bank is well capitalized with Tier I CAR at 11.89% and Tier II CAR at 16.11%.
Despite NTB having a market share of near 3%, we believe the bank is poised to grow on the back of industry wide upside. Therefore, we are maintaining our forecast 2010E net profit at LKR969.7 mn (up 41% YoY) and projected 2011E net earnings at LKR1,296.9 mn (up 34% YoY)
The share is attractive on 8.9X forecast 2010E net profit, 6.6X projected net 2011E earnings, 1.2X PBV. BUY.
Sri Lanka Equity Analytics
World Trade Centre
Colombo, Sri Lanka
Email: info@srilankaequity.com
Web: www.srilankaequity.com
Tuesday, March 2, 2010
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