Financial performance commercial bank
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Analysis of Financial Performance
of Commercial Bank of Ceylon
PLC
Presented by Nilam Hallaldeen
www.company.com
Our Focus Areas
The Company
Banking Sector
Non Financial Information
Financial Analysis
Conclusion
www.company.com
• Started as Eastern Bank Ltd
• Business Structure
• Awards & Achievements
• Strategic Direction
The company
Corporate40%
Personal52%
Overseas8%
Product Range
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• 22 Licensed commercial banks & 14 specialized banks
• Market Share
• Deposits - Rs. 200 billion
• Loans & Advances - Rs. 180 billion
• Total Assets - Rs. 254 billion
• Industry Dynamics
• High Inflation
• High Interest rates
• High Expenditure
• Statutory Reserve Requirement Reduction
Banking Sector - 2008
13%
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Non Financial Information
Commercia
l Sampath HNB NTB
Branches 181 114 177 38
Staff 4041 2364 4395 1615
ATMs 346 171 260 47
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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 centre
12 8 12 11
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Company LOGO
Financial Analysis
• Profitability Ratios
• Asset Management Ratios
• Market Investor Ratios
• Liquidity Ratios
• Debt Management ratios
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Company LOGO
Profitability Ratios
• Net Interest Margin
• Return on Shareholders’ Fund (ROE)
• Return on Assets
• Year on Year Growth
• Cost to Income
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Company LOGO
Net Interest Margin
2004 2005 2006 2007 20080
1
2
3
4
5
6 Com-mercial Sampath HNB
Financial Year
Net
Inte
rest
Marg
in %
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Company LOGO
Return on Shareholders’ Fund (ROE)
2004 2005 2006 2007 20080
5
10
15
20
25 Commercial Sampath HNBNTB
Financial Year
Retu
rn o
n S
hare
hold
ers
’ Fu
nd
(R
OE)
%
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Company LOGO
Return on Assets
2004 2005 2006 2007 20080
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8 Com-mercial Sampath HNB
Financial Year
Retu
rn o
n A
ssets
%
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Company LOGO
Income Growth
2004 2005 2006 2007 2008
-20
0
20
40
60
80
100 Com-mercial Sampath HNB
Financial Year
Incom
e G
row
th %
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Company LOGO
Cost to Income Ratio
2004 2005 2006 2007 20080
10
20
30
40
50
60
70Com-mercial
Sampath
Financial Year
Cost
to I
ncom
e R
ati
o %
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Company LOGO
Asset Management Ratios
• Advance to Deposit & Refinance
• Capital Adequacy
• Tier I Capital
• Tier II Capital
• Non Performing Loans (Assets)
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Company LOGO
Advance to Deposit & Refinance
2004
2005
2006
2007
2008
0 10 20 30 40 50 60 70 80 90100
8790
71 NTB
HNB
Sampath
Commercial
Advance to Deposit & Refinance %
Fin
an
cia
l Y
ear
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Company LOGO
Capital Adequacy Ratio- Tier I Capital
2004 2005 2006 2007 20080
2
4
6
8
10
12
11
8
Com-mercial Sampath HNB
Financial Year
Cap
ital A
deq
uacy R
ati
o –
Tie
r I
%
Statutory Requiremen
t
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Company LOGO
Capital Adequacy Ratio- Tier I & II Capital
2004 2005 2006 2007 20080
2
4
6
8
10
12
14
16
18
13%
16%Com-mercial Sampath HNB
Financial Year
Cap
ital A
deq
uacy R
ati
o-
Tie
r I
& I
I %
Statutory Requirement
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Company LOGO
Non - Performing Loans (Assets)
2004 2005 2006 2007 20080
2
4
6
8
10
12 Com-mercial Sampath HNB
Financial Year
Non
- P
erf
orm
ing
Loan
s
(Assets
) %
Industry Average = 6.2
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Company LOGO
Liquidity Ratios
• Liquid Fund to Liabilities
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Liquid Fund to Liabilities
2004 2005 2006 2007 20080
5
10
15
20
25
30
35
40
45 Com-mercial Sampath HNB
Financial Year
Liq
uid
Fu
nd
to L
iab
ilit
ies %
CBSL Recommendation
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Company LOGO
Market / Investor Ratios
• Earnings per Share (EPS)
• Dividends per Share (DPS)
• Price Earning Ratio (P/E)
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Company LOGO
Earnings per Share (EPS)
2004 2005 2006 2007 20080
5
10
15
20
25 Com-mercial Sampath HNB
Financial Year
Earn
ing
s p
er
Sh
are
(EP
S)
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Company LOGO
Dividends per Share (DPS)
2004 2005 2006 2007 20080
1
2
3
4
5
6
7
8 Commercial Sampath HNBNTB
Financial Year
Div
iden
ds p
er
Sh
are
(D
PS
) %
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Company LOGO
Price Earning Ratio (P/E)
2004 2005 2006 2007 20080
10
20
30
40
50
60 Com-mercial Sampath HNB
Financial Year
Pri
ce E
arn
ing
Rati
o (
P/E
)
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Company LOGO
Debt Management Ratios
• Debt to Equity
• Interest Cover
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Company LOGO
Debt to Equity
2004 2005 2006 2007 20080.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70Com-mercial Sampath HNB
Financial Year
Deb
t to
Eq
uit
y
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Company LOGO
Interest Cover
2004 2005 2006 2007 20080
2
4
6
8
10
12
14
16 Com-mercial Sampath HNB
Financial Year
Inte
rest
Cover
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Company LOGO
The Way forward
• Enhancing the customer convenience
• Building high performance culture
• Expanding to international market (Specially in South Asia)
• Prudent growth
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Company LOGO
Conclusion
• 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.
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