● 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 banking 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
SRI LANKA EQUITY ANALYTICS
World Trade Center
Colombo
Sri Lanka
Email: sriventure@gmail.com
Web: www.srilankaequity.com
Saturday, November 14, 2009
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