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PLC EPS 1 FOR SIX MONTHS ..EXPECT EPS AROUND 1.8 NET ASSET 19
Central bank’s move to reduce deposit rates is a positive for NIMs
NIMs were up for the fifth straight quarter coming in at 9.98% (+149 bps YoY, +23 bps QoQ). The recent reduction in deposit rates is expected to ease the pressure from NIMs and we forecast NIMs to be 8.89% in FY20E.
We adjust our forecasts and revise our target price to LKR 15
PLC currently trades at FY20E P/B of 0.6x, compared to a peer average of 0.5x. The premium is justified given PLC’s strong capital position which is a long term positive. We made slight adjustments to our earnings forecast to factor in the impact from slow tourism sector. We value PLC in line with the market at 0.6x FY20E BV leading to a target price of LKR 15/share . Including our forecast dividend of LKR 1.25/share,
Central bank’s move to reduce deposit rates is a positive for NIMs
NIMs were up for the fifth straight quarter coming in at 9.98% (+149 bps YoY, +23 bps QoQ). The recent reduction in deposit rates is expected to ease the pressure from NIMs and we forecast NIMs to be 8.89% in FY20E.
We adjust our forecasts and revise our target price to LKR 15
PLC currently trades at FY20E P/B of 0.6x, compared to a peer average of 0.5x. The premium is justified given PLC’s strong capital position which is a long term positive. We made slight adjustments to our earnings forecast to factor in the impact from slow tourism sector. We value PLC in line with the market at 0.6x FY20E BV leading to a target price of LKR 15/share . Including our forecast dividend of LKR 1.25/share,
