LBR,Thursday 11 August 2011)
Sri Lanka’s Commercial Bank, the largest private commercial bank in the island is expected to post a 79 percent year on year net income growth for the June quarter 2011, forecasts brokerage Heraymila Securities.
The Sri Lankan unit of the Dubai based firm expects Commercial Bank to post earnings per share of 5.57 rupees for the quarter, up from 3.12 rupees a year ago, on the back of growth in core banking income, better recoveries, tax reductions, and improving asset quality.
“Recent price correction has begun to tickle our interest in this stock. But we believe COMB needs to re-rate down further for a compelling investment case,” said Heraymila Securities in its 2Q 2011 earnings preview for the bank.
Heraymila expects the bank to post 2.17 billion rupees in net income for the June quarter, and core banking income is projected at 5.09 billion rupees, up 19 percent year on year.
The house is forecasting 30 percent loan growth and 14 percent deposit growth for the period, while non performing loan ratio is set to reach 3.8 percent, down from four percent a year back.
Commercial Bank accounted for nearly 10 percent of the island’s banking sector assets in 2010.
The bank has a network spanning close to 200 branches island-wide, while plans to add 10 to 15 new branches in 2011 are on the cards.
It also has a presence in Bangladesh which accounted for approximately 10 percent of assets and 15 percent of net income in 2010.