Comparison of financial performance of Commercial Bank of Sri Lanka with competitors

1. Analysis of Financial
Performance
of
Commercial Bank of Ceylon
PLC
Presented by
Nilam Hallaldeen

2. Our Focus Areas
The Company
Banking Sector
Non Financial Information
Financial Analysis
Conclusion
www.company.com

3. The company
• Started as Eastern Bank Ltd
Product Range
• Business Structure
Overseas
• Awards & Achievements
8%
Corporate
• Strategic Direction 40%
Personal
52%
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4. Banking Sector - 2008
• 22 Licensed commercial banks & 14
specialized banks
• Market Share
• Deposits - Rs. 200 billion
• Loans & Advances - Rs. 180 billion 13%
• Total Assets - Rs. 254 billion
• Industry Dynamics
• High Inflation
• High Interest rates
• High Expenditure
• Statutory Reserve Requirement Reduction
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5. Non Financial Information
Commercial Sampath HNB NTB
Branches 181 114 177 38
Staff 4041 2364 4395 1615
ATMs 346 171 260 47
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6. Non Financial Information
Commercial Sampath HNB NTB
Staff/Branch 22 21 25 43
Income/Employee 11 9 8 6
Income/Branch 243 195 210 270
Profit/Employee 1.0 0.6 0.7 0.3
Profit/Delivery
12 8 12 11
centre
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7. Financial Analysis
Company
LOGO
• Profitability Ratios
• Asset Management Ratios
• Market Investor Ratios
• Liquidity Ratios
• Debt Management ratios
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8. Profitability Ratios
Company
LOGO
• Net Interest Margin
• Return on Shareholders’ Fund (ROE)
• Return on Assets
• Year on Year Growth
• Cost to Income
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9. Net Interest Margin
Company
LOGO
6
Commercial
Sampath
Net Interest Margin %
5
HNB
NTB
4
3
2
1
0
2004 2005 2006 2007 2008
Financial Year
www.company.com

10. Return on Shareholders’ Fund (ROE)
Company
LOGO
25 Commercial
Return on Shareholders’ Fund
Sampath
HNB
20
NTB
15
(ROE) %
10
5
0
2004 2005 2006 2007 2008
Financial Year
www.company.com

11. Return on Assets
Company
LOGO
1.8
Commercial
1.6 Sampath
Return on Assets %
1.4 HNB
NTB
1.2
1
0.8
0.6
0.4
0.2
0
2004 2005 2006 2007 2008
Financial Year
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12. Income Growth
Company
LOGO
100
Commercial
Sampath
80 HNB
NTB
Income Growth %
60
40
20
0
2004 2005 2006 2007 2008
-20
Financial Year
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13. Cost to Income Ratio
Company
LOGO
70
Commercial
Cost to Income Ratio %
60 Sampath
HNB
50 NTB
40
30
20
10
0
2004 2005 2006 2007 2008
Financial Year
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14. Asset Management Ratios
Company
LOGO
• Advance to Deposit & Refinance
• Capital Adequacy
• Tier I Capital
• Tier II Capital
• Non Performing Loans (Assets)
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15. Advance to Deposit & Refinance
Company
LOGO
71
90 NTB
2008
87 HNB
Sampath
Financial Year
2007
Commercial
2006
2005
2004
0 20 40 60 80 100
Advance to Deposit & Refinance %
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16. Capital Adequacy Ratio- Tier I Capital
Company
LOGO
12 Commercial
Capital Adequacy Ratio – Tier I
11
Sampath
10 HNB
NTB
8
8
6
%
Statutory
Requirement
4
2
0
2004 2005 2006 2007 2008
Financial Year
www.company.com

17. Capital Adequacy Ratio- Tier I & II Capital
Company
LOGO
18 Commercial
Capital Adequacy Ratio- Tier I 16% Sampath
16
HNB
14 13%
NTB
12
Statutory
10 Requirement
& II %
8
6
4
2
0
2004 2005 2006 2007 2008
Financial Year
www.company.com

18. Non - Performing Loans
Company
(Assets)
LOGO
12
Commercial
Sampath
Non - Performing Loans
10
HNB
NTB
8
(Assets) %
Industry Average = 6.2
6
4
2
0
2004 2005 2006 2007 2008
Financial Year
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19. Liquidity Ratios
Company
LOGO
• Liquid Fund to Liabilities
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20. Liquid Fund to Liabilities
45
Liquid Fund to Liabilities % Commercial
40 Sampath
35 HNB
NTB
30
25
20
CBSL
15 Recommendation
10
5
0
2004 2005 2006 2007 2008
Financial Year
www.company.com

21. Market / Investor Ratios
Company
LOGO
• Earnings per Share (EPS)
• Dividends per Share (DPS)
• Price Earning Ratio (P/E)
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22. Earnings per Share (EPS)
Company
LOGO
25
Commercial
Sampath
Earnings per Share (EPS)
20 HNB
NTB
15
10
5
0
2004 2005 2006 2007 2008
Financial Year
www.company.com

23. Dividends per Share (DPS)
Company
LOGO
8
Commercial
Dividends per Share (DPS) %
7 Sampath
HNB
6
NTB
5
4
3
2
1
0
2004 2005 2006 2007 2008
Financial Year
www.company.com

24. Price Earning Ratio (P/E)
Company
LOGO
60
Price Earning Ratio (P/E) Commercial
Sampath
50
HNB
NTB
40
30
20
10
0
2004 2005 2006 2007 2008
Financial Year
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25. Debt Management Ratios
Company
LOGO
• Debt to Equity
• Interest Cover
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26. Debt to Equity
Company
LOGO
0.70
Commercial
0.60 Sampath
HNB
0.50
Debt to Equity
NTB
0.40
0.30
0.20
0.10
0.00
2004 2005 2006 2007 2008
Financial Year
www.company.com

27. Interest Cover
Company
LOGO
16
Commercial
14 Sampath
HNB
12
NTB
Interest Cover
10
8
6
4
2
0
2004 2005 2006 2007 2008
Financial Year
www.company.com

28. The Way forward
Company
LOGO
• Enhancing the customer convenience
• Building high performance culture
• Expanding to international market
(Specially in South Asia)
• Prudent growth
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29. Conclusion
Company
LOGO
• The average growth rate of COMB is
expected to be 12% during next five
years.
• The required return on equity is forecasted
to be 22% in next five years.
• Commercial bank is expected to maintain
a payout ratio of 40% during the next five
years.
www.company.com