Sri Lanka Equity Forum
Dear Reader,

Registration with the Sri Lanka Equity Forum would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
Sri Lanka Equity Forum

Discussion Forum for Stock Market Investors in Sri Lanka

සිංහල පරිවර්තනය
Contribute
Submit Post

Latest topics

» Shares to Buy
by Teller Today at 7:04 pm

» Year end dull market
by chandike73 Today at 6:20 pm

» ALLIANCE FINANCE COMPANY PLC (ALLI.N0000)
by KavinduTM Today at 3:47 pm

» POSITIVE ECONOMIC & POLITICAL STABILITY
by Kipling Today at 1:22 pm

» CSE RULES (CSE වල දැනට තියන නීති ගැන)
by ThilinaM Today at 12:04 pm

» RENUKA CAPITAL PLC (KZOO.N0000)
by ThilinaM Today at 11:54 am

» Seylan right issue
by ThilinaM Today at 11:45 am

» Company එකක් DELIST කරන...
by ThilinaM Today at 11:40 am

» EAST WEST PROPERTIES PLC (EAST.N0000)
by Invest2018 Today at 10:25 am

» What's going on about vone
by glad Today at 9:09 am

» SEYLAN BANK PLC (SEYB.N0000)
by Intrinsicvalue Today at 6:29 am

» Central bankers trigger crises, don’t admit or learn from mistakes: economist at Sri Lanka forum
by fireshelter Yesterday at 11:18 pm

» Sri Lanka targets US$6,500 per capita income by 2025
by fireshelter Yesterday at 11:15 pm

» RENUKA AGRI FOODS PLC (RAL.N0000)
by fireshelter Yesterday at 10:45 pm

» GALADARI HOTELS (LANKA) PLC (GHLL.N0000)
by fireshelter Yesterday at 10:42 pm

» Banking Sector
by PDH Yesterday at 8:16 pm

» Dhammika Perera Aquire ALUF @23 Now at 50%Discount
by NZ BOY Yesterday at 2:02 pm

» Key to staying in the trading game for Day Traders
by NANDANA2012 Yesterday at 11:30 am

» LANKA IOC PLC (LIOC.N0000)
by Teller Yesterday at 10:35 am

» Investment Advice
by Gajaya Yesterday at 9:17 am

» කාලෙකට පස්සෙ එන අවස්තාවක් උදා වෙලා කියලයි - හැබැයි අවදානම තියනවා
by Kipling Sat Dec 14, 2019 9:31 pm

POPULAR COMPANIES
A

ABANS ELECTRICALS PLC

ACCESS ENGINEERING PLC Hot

ACL CABLES PLC

ACL PLASTICS PLC

ACME PRINTING & PACKAGING PLC

AGSTAR PLC

AITKEN SPENCE HOTEL HOLDINGS PLC

AITKEN SPENCE PLC

ANILANA HOTELS AND PROPERTIES PLC

ARPICO INSURANCE PLC

ASIA ASSET FINANCE PLC

ASIA CAPITAL PLC

B

BAIRAHA FARMS PLC

BALANGODA PLANTATIONS PLC

BIMPUTH FINANCE PLC

BLUE DIAMONDS JEWELLERY WORLDWIDE PLC

B P P L HOLDINGS PLC

BROWNS BEACH HOTELS PLC

BROWNS INVESTMENTS PLC

C

CARGO BOAT DEVELOPMENT COMPANY PLC

CENTRAL INDUSTRIES PLC

CEYLON COLD STORES PLC

CEYLON GRAIN ELEVATORS PLC Hot

CEYLON TEA BROKERS PLC

CEYLON TOBACCO COMPANY PLC

CHEVRON LUBRICANTS LANKA PLC

COLOMBO FORT LAND & BUILDING PLC

COMMERCIAL BANK OF CEYLON PLC

CITRUS LEISURE PLC Hot

COMMERCIAL CREDIT AND FINANCE PLC

D

DANKOTUWA PORCELAIN PLC

DFCC BANK PLC

DIALOG AXIATA PLC

DIALOG FINANCE PLC

DIPPED PRODUCTS PLC

DISTILLERIES COMPANY OF SRI LANKA PLC

DUNAMIS CAPITAL PLC

E

EAST WEST PROPERTIES PLC Hot

EASTERN MERCHANTS PLC

EXPOLANKA HOLDINGS PLC

E-CHANNELLING PLC

F

FIRST CAPITAL HOLDINGS PLC

G

GALADARI HOTELS (LANKA) PLC

GUARDIAN CAPITAL PARTNERS PLC

H

HATTON NATIONAL BANK PLC

HAYLEYS PLC

HAYLEYS FABRIC PLC

HAYLEYS FIBRE PLC Hot

HEMAS HOLDINGS PLC

HIKKADUWA BEACH RESORT PLC

HNB ASSURANCE PLC

HVA FOODS PLC

J

JANASHAKTHI INSURANCE COMPANY PLC

JOHN KEELLS HOLDINGS PLC Hot

JOHN KEELLS HOTELS PLC

L

LANKA ASHOK LEYLAND PLC

LANKA IOC PLC

LANKEM CEYLON PLC

LANKEM DEVELOPMENTS PLC

LAUGFS GAS PLC

LAUGFS POWER LIMITED

LOLC FINANCE PLC

LOLC HOLDINGS PLC

LUCKY LANKA MILK PROCESSING COMPANY PLC

M

MELSTACORP PLC

N

NATIONAL DEVELOPMENT BANK PLC

NATION LANKA FINANCE PLC

NESTLE LANKA PLC

O

ORIENT FINANCE PLC

OVERSEAS REALTY (CEYLON) PLC

P

PANASIAN POWER PLC

PEOPLE'S LEASING & FINANCE PLC

PIRAMAL GLASS CEYLON PLC

PRIME FINANCE PLC

R

RAIGAM WAYAMBA SALTERNS PLC

RENUKA AGRI FOODS PLC

RENUKA CAPITAL PLC

RENUKA HOLDINGS PLC

RICHARD PIERIS AND COMPANY PLC

RICHARD PIERIS EXPORTS PLC Hot

ROYAL CERAMICS PLC

S

SAMPATH BANK PLC

SEYLAN BANK PLC

SIERRA CABLES PLC

SINGHE HOSPITALS PLC Hot

SMB LEASING PLC

SOFTLOGIC HOLDINGS PLC

SOFTLOGIC LIFE INSURANCE PLC

SRI LANKA TELECOM PLC

SWISSTEK (CEYLON) PLC Hot

T

TEEJAY LANKA PLC

TESS AGRO PLC

THREE ACRE FARMS PLC

TOKYO CEMENT COMPANY (LANKA) PLC Hot

U

UNION BANK OF COLOMBO PLC

V

VALLIBEL FINANCE PLC

VALLIBEL ONE PLC Hot

VALLIBEL POWER ERATHNA PLC

W

WASKADUWA BEACH RESORT PLC

Advertise

You are not connected. Please login or register

Sri Lanka Equity Forum » Stock Market Talk » Banking Sector

Banking Sector

Go to page : 1, 2, 3  Next

Go down  Message [Page 1 of 3]

1Banking Sector Empty Banking Sector on Sat Apr 16, 2011 6:33 pm

seyon


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Hi Friends

This brief analysis is connected to my previous analysis (https://forum.srilankaequity.com/t2231-banking-sector-analysis-combhnbseybntbsambdfcchdfcndbpapc-and-mbsl) and this analysis in briefing the financials comparing with previous year and including main features (key balances and numbers) of the retail largest banks. I excluded the DFCC,NDB and HDFC , as their scope is mainly focus on development banking. Further I give certain measures ( KPI- Key Performance Indicators) to interpret  the performance. I do not restrict with these KPI, if u have additional measures related to banking industry, Pls share with us..

This is good time to discuss about banking sectors, as expected to see the first quarter results with the new improvement due to tax saving and economic growth. Here we have veteran analyzers with different views, which would help us to have good investment decision and to sharing our knowledge and views.  

Following are the my selected KPIs  
* Interest Margin
* % of Other Income Out of Operating Profit Operational Cost to Income Ratio
* % Loan Loss Provision out of Total Non Performing Loan
* NPL Raito
* PER
* PBV
* Number of Employees (comment in terms of total assets)


This is My View……………….

When I do the analysis of banks (SEYB,NTB,SAMP,PABC) KPIs ,I took the indicators of COMB and HNB as industry norms ( I may be wrong) as these two banks are relatively strength in the banking industry and analyzed COMB and HNB by comparing each others.    

1.SEYB…

Interest Margin – Line with industry

% of Other Income Out of Operating Profit- Very High, out of that 1Bn bad debt written back and recovered  

Operational Cost to Income Ratio – Very high % comparing with other banks

% Loan Loss Provision out of Total Non Performing Loan – Comparably High  

NPL Raito  - Highest Ratio in the Banking Sectors ( this might be improved due to the recent restructured program taken place in the bank and Bank strategic target to reduce to 10% during the year.)  

PER  - Trading @ 15X which is slightly low comparing  with other retails banks. This impact is due to the recent Rights issue  

PBV- Very Low… This also may be due to the recent Rights issue  

Number of Employees – Very High

2.NTB

Interest Margin – Line with industry

% of Other Income Out of Operating Profit- Very High, out of that 1.3Bn  reported as fees and other income ( no details given) this may
be due to the unrealized gain on fair value adjustment.  

Operational Cost to Income Ratio – Very high % amongst other banks

% Loan Loss Provision out of Total Non Performing Loan – Comparably High, However comparing with previous year good improvement.  

NPL Raito – Good, line with industry…  

PER - Trading @ 18x,  Fairly trading @ Industry average

PBV  - Line with Industry

Number of Employees - Comparably high

3.SAMP

Interest Margin – Line with industry

% of Other Income Out of Operating Profit- Slightly High, out of that Capital Gain on Sale of LBFL shares 654Mn , Bad Debt Recoveries
1.2Bn and Recovery of Impairment of Investment 1.3Bn. Hence Recovery of impairment and Capital gain are non recurring items amounts to Rs.2Bn.    

Operational Cost to Income Ratio – Par with industry
% Loan Loss Provision out of Total Non Performing Loan – Very High reporting @ 12%  due to the bank made additional specific credit
loss provisions of Rs. 1,344.9 Mn, over and above the amounts recommended by the Central Bank of Sri Lanka ignoring collateral values.  

NPL Raito – Good, and Well managed

PER - Trading @ 14x, is Low comparing with other bank, However, taking out the non recurring income Rs.1.3Bn, then PE would be trading above the average.  

PBV  - Line with Industry

Number of Employees – Fairly ok. We could see there were new recruitment about  300 staff due to addition of 30 new branches during the year.  

4.PABC

Interest Margin – Slightly high margin with other banks  

% of Other Income Out of Operating Profit- Fairly Good  

Operational Cost to Income Ratio – Par with industry

% Loan Loss Provision out of Total Non Performing Loan – Improved comparing with previous year.  Par with the industry  

NPL Raito – Above the industry average, however it is improved comparing with previous year.

PER - Trading @ 21x, is high comparing with other bank.

PBV  - Line with Industry

Number of Employees –  Comparably High..

5.HNB

Interest Margin – Par with industry

% of Other Income Out of Operating Profit-  Comparing with COMB contribution is high, that is due to the capital gain of sales quoted investment amounts 600Mn

Operational Cost to Income Ratio – Reporting @76% comparing with COMB, ratio is high

% Loan Loss Provision out of Total Non Performing Loan – Well Maintained at very low level  

NPL Raito – Reporting at 5% , Very lower level

PER - Trading @ 20x, is high comparing with other bank.

PBV  - Line with Industry

Number of Employees – Little bit high compare to COMB employees with the total assets.
 

6.COMB

Interest Margin – Par with industry

% of Other Income Out of Operating Profit- Reporting at 33%, Lowest contribution to operational profit.  

Operational Cost to Income Ratio – Reporting @ 61% very lowest amongst the banks.

% Loan Loss Provision out of Total Non Performing Loan – Well Maintained at very low level  

NPL Raito – Reporting at 7% , a little bit higher compare to HNB

PER - Trading @ 19x

PBV  - Line with Industry

Ok, there can be some differ view on the interpretation and comparison of KPI or additional measures to be brought to have good analysis.

So Pls share ur thoughts and views on the KPI or If u have some additional / different measures to be adopted… Pls contribute that with the analysis

Thanks in advance

Find the attachment of Brief Analysis of Banking Sector



Last edited by seyon on Sat Apr 16, 2011 7:45 pm; edited 2 times in total

2Banking Sector Empty Re: Banking Sector on Sat Apr 16, 2011 6:39 pm

RockStock


Manager - Equity Analytics
Manager - Equity Analytics
thanks for the great work

3Banking Sector Empty Re: Banking Sector on Sat Apr 16, 2011 6:49 pm

milanka

milanka
Vice President - Equity Analytics
Vice President - Equity Analytics
Seyon: there are few other KPI's discussed in this research report. One of them is CASA - Current A/c to Savings accounts ratio. You may add relevent KPI's to your report. Thanks for the Analysis anyway.

http://www.ft.lk/2011/04/11/licensed-commercial-banking-sector-riding-the-growth-wave/

http://forum.srilankaequity.com/u188

4Banking Sector Empty Re: Banking Sector on Sat Apr 16, 2011 6:55 pm

tubal


Vice President - Equity Analytics
Vice President - Equity Analytics
I do appreciate Seyon's hard work. Well done.
buf if you ask me (and no one is asking me :-) ), unimaginative brokers are promoting the banking sector and most investors are falling hook line and sinker for it. When the interims start coming out, we will find that once you deduct the extra-ordinary items, eps growth is very ordinary.

You will also find that the central banks increase in the reserve ratio will have a negative impact on the banks bottom line.

5Banking Sector Empty Re: Banking Sector on Sat Apr 16, 2011 7:57 pm

Rocky

Rocky
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@tubal wrote:I do appreciate Seyon's hard work. Well done.
buf if you ask me (and no one is asking me :-) ), unimaginative brokers are promoting the banking sector and most investors are falling hook line and sinker for it. When the interims start coming out, we will find that once you deduct the extra-ordinary items, eps growth is very ordinary.

You will also find that the central banks increase in the reserve ratio will have a negative impact on the banks bottom line.

Agree with tubal to some extent. Banking sectors has seen better days.
In my opinion Sampath is the most secure investment though you will not lose with others mentioned above.

Prudency in showing higher provisions for bad debts is not a negative sign. Actually, to the contrary it gives an investor more confidence.

Profits will be marginal though. Cannot expect anything exceptional.

6Banking Sector Empty Re: Banking Sector on Sat Apr 16, 2011 8:05 pm

seyon


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
@tubal wrote: When the interims start coming out, we will find that once you deduct the extra-ordinary items, eps growth is very ordinary.

You will also find that the central banks increase in the reserve ratio will have a negative impact on the banks bottom line.

That is true I agreed tubal.. This we could see from SAMP out of 3.3Bn bottom line Rs.2bn reported by non recurring income. However COMB and HNB are very attractive in terms of bottom line... What do u say...


7Banking Sector Empty Re: Banking Sector on Sat Apr 16, 2011 8:14 pm

seyon


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
hybrid_OS wrote:
@tubal wrote:I do appreciate Seyon's hard work. Well done.
buf if you ask me (and no one is asking me :-) ), unimaginative brokers are promoting the banking sector and most investors are falling hook line and sinker for it. When the interims start coming out, we will find that once you deduct the extra-ordinary items, eps growth is very ordinary.

You will also find that the central banks increase in the reserve ratio will have a negative impact on the banks bottom line.

Agree with tubal to some extent. Banking sectors has seen better days.
In my opinion Sampath is the most secure investment though you will not lose with others mentioned above.

Prudency in showing higher provisions for bad debts is not a negative sign. Actually, to the contrary it gives an investor more confidence.

Profits will be marginal though. Cannot expect anything exceptional.

Hi hybrid

For the SAMB don"t u think the opening of 30 branches during the year of 2010 will impact the cost income ratio negatively in coming quarters. Then this impact would hit the bottom line...

How do u look into this...


8Banking Sector Empty Re: Banking Sector on Sat Apr 16, 2011 10:51 pm

UKboy

UKboy
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Great work seyon,
Eventhough NTB produced one billion rupee profits in last year, cse.alpha ( slstock earlier) mentioned an interesting issue regarding NTB share capital which could easily be missed (by our retailors).

http://forum.srilankaequity.com/t2343-ntb-2011-warrants-converted-to-shares

9Banking Sector Empty Re: Banking Sector on Sat Apr 16, 2011 11:38 pm

stockanalytic

stockanalytic
Manager - Equity Analytics
Manager - Equity Analytics
hi seyon, good work.
but I don't expect banking mega rally soon.
For a long time, we are expecting banking rally. If rally initiated by someone, their will be huge selling pressure within 5% capital gain. So, rally should break these selling orders. Therefore we need big hand investers to do this. Otherwise rally will rest for a while, and then it will start again (like BRWN)
Now our retailers are with illiquid shares. we need big fishes for banking rally. Banking shares are comparatively higher amount with CDs account and their capitalization also high. (CDs % of shares= COMB- 95.5% SAMP-88.9% NTB- 83.9% HNB- 82.6% NDB-80.9% DFCC- 97.7% MBSL- 99.4%) Big market capitalization with higher number of shares is very difficult to get price appreciation with current market condition (mainly depends on retailers). But, I am expecting near future rally (manipulated rally) with SEYB (they need rally to oversubscribe the Rights).

10Banking Sector Empty Re: Banking Sector on Sun Apr 17, 2011 2:27 am

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics
@seyon wrote:

2.NTB
Interest Margin – Line with industry


% of Other Income Out of Operating Profit- Very High, out of that 1.3Bn reported as fees and other income ( no details given) this may
be due to the unrealized gain on fair value adjustment.

Operational Cost to Income Ratio – Very high % amongst other banks
% Loan Loss Provision out of Total Non Performing Loan – Comparably High, However comparing with previous year good improvement.
NPL Raito – Good, line with industry…
PER - Trading @ 18x, Fairly trading @ Industry average
PBV - Line with Industry
Number of Employees - Comparably high

Seyon, good work.

Regarding NTB isn;t the current PE ( before warrants inclusion).

NTB PE = 77/5.4=14.25 not 18 .

11Banking Sector Empty Re: Banking Sector on Sun Apr 17, 2011 2:58 am

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics
@stockanalytic wrote:hi seyon, good work.
but I don't expect banking mega rally soon.
For a long time, we are expecting banking rally. If rally initiated by someone, their will be huge selling pressure within 5% capital gain. So, rally should break these selling orders. Therefore we need big hand investers to do this. Otherwise rally will rest for a while, and then it will start again (like BRWN)
Now our retailers are with illiquid shares. we need big fishes for banking rally. Banking shares are comparatively higher amount with CDs account and their capitalization also high. (CDs % of shares= COMB- 95.5% SAMP-88.9% NTB- 83.9% HNB- 82.6% NDB-80.9% DFCC- 97.7% MBSL- 99.4%) Big market capitalization with higher number of shares is very difficult to get price appreciation with current market condition (mainly depends on retailers). But, I am expecting near future rally (manipulated rally) with SEYB (they need rally to oversubscribe the Rights).

Regarding SEYB,

I am not sure on this ( please don;t quote me) , but am not sure whether SEYB hassupport some pre arrangement with institutional/HNW support to subscribe for their rights completely at their offered prices if the retailers fail. If by XR date if the SEYB price don;t not go up to make the right issue attractive that means there is no push. In turn it could mean what I said before. The way SEYB have acted with a 1 Rs Dividend then rights issue and then and delayed announcement of right issues dates it appears that way right now. If you look at OSEA and LITE, the right issues would have been failure as OSEA was trading at right price of 15 and LITE at 8. SO essentially the right issue would have been unsuccessfull in our eye. At least in the OSEA case I heard that their mother company bought all( most) remaining OSEA rights on a pre arragement. Am wondering the same for SEYB???

I really HOPE NOT, as a small investor as I already lost considerable money on SEYB due to this right issue. I hope they will protect their smaller time investors like myself and many. I know after talking to some on the forum they loss money on SEYB too right now. After this loss if they want even more money from me ( for rights) hmm...?


Note : To be unbiased, if n ot for this right issue mess to date, I believe SEYB to be a good long term bank with low PBV and decent earning with improving financials. It was attractive before the right issue. The right issue with influx of more capital should make the bank stringer for the future.

12Banking Sector Empty Re: Banking Sector on Sun Apr 17, 2011 9:30 am

seyon


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
@slstock wrote:

Seyon, good work.

Regarding NTB isn;t the current PE ( before warrants inclusion).

NTB PE = 77/5.4=14.25 not 18

Yes before the warrant conversion PE is correct, However, the resent drop in the share price due to the warrant conversion. that is the reason i added the warrants shares for my calculation. This good point to be noted that capital infusion from warrant conversion will boost the coming quarter earnings. Hence Forwarded PE would be 14 ( 2010 Annual EPS -4.8 ( Bank only) Expected Earning growth due to the conversion 15% ( 15% contribution to stated capital from warrant conversion), so forwarded annualized EPS only adjusted earning growth from new capital infusion from warrant, is 4.8* 115%) then forwarded PE would be trading at 14x)....

Am i correct Slstock...

13Banking Sector Empty Re: Banking Sector on Sun Apr 17, 2011 9:40 am

seyon


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
@slstock wrote:

Regarding SEYB,

I am not sure on this ( please don;t quote me) , but am not sure whether SEYB hassupport some pre arrangement with institutional/HNW support to subscribe for their rights completely at their offered prices if the retailers fail. If by XR date if the SEYB price don;t not go up to make the right issue attractive that means there is no push. In turn it could mean what I said before. The way SEYB have acted with a 1 Rs Dividend then rights issue and then and delayed announcement of right issues dates it appears that way right now. If you look at OSEA and LITE, the right issues would have been failure as OSEA was trading at right price of 15 and LITE at 8. SO essentially the right issue would have been unsuccessfull in our eye. At least in the OSEA case I heard that their mother company bought all( most) remaining OSEA rights on a pre arragement. Am wondering the same for SEYB???

I really HOPE NOT, as a small investor as I already lost considerable money on SEYB due to this right issue. I hope they will protect their smaller time investors like myself and many. I know after talking to some on the forum they loss money on SEYB too right now. After this loss if they want even more money from me ( for rights) hmm...?


Note : To be unbiased, if n ot for this right issue mess to date, I believe SEYB to be a good long term bank with low PBV and decent earning with improving financials. It was attractive before the right issue. The right issue with influx of more capital should make the bank stringer for the future.

Do u think after XR price even come down below the right issue price.. But I am little bit confident with the 1st quarter numbers there would be push up in the share price due to the bank performance. that may be the reason they delayed the right issue announcement.

14Banking Sector Empty Re: Banking Sector on Sun Apr 17, 2011 10:09 am

StocksWatch

StocksWatch
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Thanks for your hard work seyon. This is really useful. + rep from me.

15Banking Sector Empty Re: Banking Sector on Sun Apr 17, 2011 10:13 am

Aamiable


Vice President - Equity Analytics
Vice President - Equity Analytics
Thanks seyon rep from me.. Smile Very Happy Smile Very Happy

16Banking Sector Empty Re: Banking Sector on Sun Apr 17, 2011 2:06 pm

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics
@seyon wrote:
@slstock wrote:

Seyon, good work.

Regarding NTB isn;t the current PE ( before warrants inclusion).

NTB PE = 77/5.4=14.25 not 18

Yes before the warrant conversion PE is correct, However, the resent drop in the share price due to the warrant conversion. that is the reason i added the warrants shares for my calculation. This good point to be noted that capital infusion from warrant conversion will boost the coming quarter earnings. Hence Forwarded PE would be 14 ( 2010 Annual EPS -4.8 ( Bank only) Expected Earning growth due to the conversion 15% ( 15% contribution to stated capital from warrant conversion), so forwarded annualized EPS only adjusted earning growth from new capital infusion from warrant, is 4.8* 115%) then forwarded PE would be trading at 14x)....

Am i correct Slstock...

Well we first need to go with Group Eps not Bank.

If we go with PE after warrants I get the below

PAT: 1084225000
new warrants= 20,963,943
Total Shares : 209,643,340+20,963,943=230607283
EPS:1084225000/230607283=4.70
PE: 77/4.7=16.38

Though the EPS got diluted due to warrants their Capital will grow further ( each share was converted at Rs 35). This infusion will be good for future as you identified due to good management. Unlike other warrant issues NTB warrants were a carefully though out process.

17Banking Sector Empty Work Sheet for RCL, CERA, LWL, & TILE on Sun Apr 17, 2011 2:15 pm

worthiness


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Do you have the worksheet for the above.

Database on banking sector is so meaningful.
I believe it should be read in Billions...isn't it?

Thanks

18Banking Sector Empty Re: Banking Sector on Sun Apr 17, 2011 2:22 pm

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics
@seyon wrote:
@slstock wrote:

Regarding SEYB,

I am not sure on this ( please don;t quote me) , but am not sure whether SEYB hassupport some pre arrangement with institutional/HNW support to subscribe for their rights completely at their offered prices if the retailers fail. If by XR date if the SEYB price don;t not go up to make the right issue attractive that means there is no push. In turn it could mean what I said before. The way SEYB have acted with a 1 Rs Dividend then rights issue and then and delayed announcement of right issues dates it appears that way right now. If you look at OSEA and LITE, the right issues would have been failure as OSEA was trading at right price of 15 and LITE at 8. SO essentially the right issue would have been unsuccessfull in our eye. At least in the OSEA case I heard that their mother company bought all( most) remaining OSEA rights on a pre arragement. Am wondering the same for SEYB???

I really HOPE NOT, as a small investor as I already lost considerable money on SEYB due to this right issue. I hope they will protect their smaller time investors like myself and many. I know after talking to some on the forum they loss money on SEYB too right now. After this loss if they want even more money from me ( for rights) hmm...?


Note : To be unbiased, if n ot for this right issue mess to date, I believe SEYB to be a good long term bank with low PBV and decent earning with improving financials. It was attractive before the right issue. The right issue with influx of more capital should make the bank stringer for the future.

Do u think after XR price even come down below the right issue price.. But I am little bit confident with the 1st quarter numbers there would be push up in the share price due to the bank performance. that may be the reason they delayed the right issue announcement.

It is unlikely after XR the price will again ( it already did) come down below XR price ( in SEYB.N case). Right now SEYB.N is just above Rights price. Though there is a good possiblity of a price hike before the XR ( I hope so also for my sake ) what I was pointing out was that I hope it will not be like the OSEA /LITE right issue where the share price was almost the same as right issue price where making it un attractrive for retailers to go for the rights.

Sadly for a bank with good growth financials this right issue was not the best timed for small investors like us.( at least until now) . Lets hope there will be a upward trend in view of the bank future growth. IF there is some overall financial rally this could go up with it anyway.

19Banking Sector Empty Re: Banking Sector on Sun Apr 17, 2011 7:32 pm

seyon


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
@slstock wrote:
@seyon wrote:
@slstock wrote:

Seyon, good work.

Regarding NTB isn;t the current PE ( before warrants inclusion).

NTB PE = 77/5.4=14.25 not 18

Yes before the warrant conversion PE is correct, However, the resent drop in the share price due to the warrant conversion. that is the reason i added the warrants shares for my calculation. This good point to be noted that capital infusion from warrant conversion will boost the coming quarter earnings. Hence Forwarded PE would be 14 ( 2010 Annual EPS -4.8 ( Bank only) Expected Earning growth due to the conversion 15% ( 15% contribution to stated capital from warrant conversion), so forwarded annualized EPS only adjusted earning growth from new capital infusion from warrant, is 4.8* 115%) then forwarded PE would be trading at 14x)....

Am i correct Slstock...

Well we first need to go with Group Eps not Bank.

If we go with PE after warrants I get the below

PAT: 1084225000
new warrants= 20,963,943
Total Shares : 209,643,340+20,963,943=230607283
EPS:1084225000/230607283=4.70
PE: 77/4.7=16.38

Though the EPS got diluted due to warrants their Capital will grow further ( each share was converted at Rs 35). This infusion will be good for future as you identified due to good management. Unlike other warrant issues NTB warrants were a carefully though out process.

Thanks Slstock... I took only the bank nos... Yes u are correct, group performance to be considered to analyze value...

Thanks again for pointing out...

Happy Trading

20Banking Sector Empty Re: Banking Sector on Sun Apr 17, 2011 9:19 pm

tubal


Vice President - Equity Analytics
Vice President - Equity Analytics
@seyon wrote:
@tubal wrote: When the interims start coming out, we will find that once you deduct the extra-ordinary items, eps growth is very ordinary.

You will also find that the central banks increase in the reserve ratio will have a negative impact on the banks bottom line.

That is true I agreed tubal.. This we could see from SAMP out of 3.3Bn bottom line Rs.2bn reported by non recurring income. However COMB and HNB are very attractive in terms of bottom line... What do u say...



Not trying to knock down Seyon's work, but I think looking solely at the bottom line is a big mistake. As we have already discussed banks and indeed many companies in the CSE have artificially inflated bottomlines. Inflated due to mark to market adjustments or sales of their investments.

Usually whenever you find an artificially inflated bottom line you can find 25 press releases saying how wonderful that company is doing (yeah, you read the ones that LOLC, Browns et al sent out). They never mention capital gains or mark to market adjustments.

Sometimes you see companies that have dramatic declines in their bottom line from the previous year. They are often followed by 50 press releases that mention the previous year had extra ordinary items in P&L and when you deduct them, the company has actually seen 2.5% growth in profitability. You will see many of them in the coming weeks.


Sponsored content


Back to top  Message [Page 1 of 3]

Go to page : 1, 2, 3  Next

Permissions in this forum:
You cannot reply to topics in this forum