COMB.N0000 (Commercial Bank of Ceylon PLC)

Good counter to look at for patience investors who doesn't like hot potatos..
(Current price around 98)

That is true and not easy to manipulate either.

Topcat wrote:Good counter to look at for patience investors who doesn't like hot potatos..
(Current price around 98)

Is there a right issue coming ?

spw19721 wrote:Is there a right issue coming ?

I think its not mandotory for comb as their financials are ok. But if they decide they can go for a right.

Thanks mate..

COMB is the number one private bank in SL.The business is rock solid.

Short term capital gain is not much compared to turnaround companies such as in Manufacturing sector.

This share specially the "X" is for patience investor who is looking for longterm wealth creation by compounding.

pathfinder wrote:COMB is the number one private bank in SL.The business is rock solid.

Short term capital gain is not much compared to turnaround companies such as in Manufacturing sector.

This share specially the "X" is for patience investor who is looking for longterm wealth creation by compounding.

Thanks, but too much selling

subash wrote:

pathfinder wrote:COMB is the number one private bank in SL.The business is rock solid.

Short term capital gain is not much compared to turnaround companies such as in Manufacturing sector.

This share specially the "X" is for patience investor who is looking for longterm wealth creation by compounding.

Thanks, but too much selling

@Subash -Selling is a blessing for an investor,If you are not trying to time the market don't consider about selling.

Good advice pathfinder

pathfinder wrote:

subash wrote:

pathfinder wrote:COMB is the number one private bank in SL.The business is rock solid.

Short term capital gain is not much compared to turnaround companies such as in Manufacturing sector.

This share specially the "X" is for patience investor who is looking for longterm wealth creation by compounding.

Thanks, but too much selling

@Subash -Selling is a blessing for an investor,If you are not trying to time the market don't consider about selling.

Thanks pathfinder

Topcat wrote:

spw19721 wrote:Is there a right issue coming ?

I think its not mandotory for comb as their financials are ok. But if they decide they can go for a right.

They recently made a statement of cancelling the debenture issue proposed of 75 million stating that bank has enuf capital. The rights issue requirement is to meet BASEL III capital adequacy hence its looks like they are self sufficient.

wellcome back small

New voting shares (19,225,046 ) = 2% of N shares , to be listed in 2020 through employees share option .

How will affect the share price? As I remember CDB sinked to 60 levels till moppong up excess quantity .

spw19721 wrote:New voting shares (19,225,046 ) = 2% of N shares , to be listed in 2020 through employees share option .

How will affect the share price? As I remember CDB sinked to 60 levels till moppong up excess quantity .

Drop to 80

spw19721 wrote:New voting shares (19,225,046 ) = 2% of N shares , to be listed in 2020 through employees share option .

How will affect the share price? As I remember CDB sinked to 60 levels till moppong up excess quantity .

]

Can you check this again?

The last disclosure is an amended one from February 2019 and only mentioned the number of options to be granted and not shares to be listed. Commercial Bank has a continuing ESOP.

Admin wrote:

spw19721 wrote:New voting shares (19,225,046 ) = 2% of N shares , to be listed in 2020 through employees share option .

How will affect the share price? As I remember CDB sinked to 60 levels till moppong up excess quantity .

]

Can you check this again?

The last disclosure is an amended one from February 2019 and only mentioned the number of options to be granted and not shares to be listed. Commercial Bank has a continuing ESOP.

Yes I got it wrong .Didnt see the previous disclosure .Seems like their ESOP is continuing process & shouldnt have much impact on share price.Thanks for the clue....

Date of initial announcement:
31 Jan 2020
Dividend per share (Rs.):
Voting :3.000
Non-voting :3.000
Type of dividend:
Second interim
Financial year:
2019
Shareholder approval:
Not required
XD date:
12 Feb 2020
Payment date:
24 Feb 2020
Share transfer book:
Open

It says second interim,Is there a final too?

Last time they gave a script dividend if my memory serves right.

Commercial Bank net up 20-ct in March on forex gains

ECONOMYNEXT – Profits at Commercial Bank of Ceylon, Sri Lanka’s largest private bank by assets grew 20 percent to 3.76 billion rupees partly helped by foreign exchange gains despite slow low growth and a 6 billion rupees loan loss provision.

Commercial Bank reported earnings of 3.66 rupees for the quarter. Commercial Bank stock closed at 54.80 rupees, up 4.70 rupees.

Interest income grew 1.18 percent to 32.3 billion rupees, interest expenses fell 1.4 percent helping the bank grow net interest income 5.47 percent to 12.7 billion rupees.

Loans grew 2.63 percent to 917 billion rupees from December March 2020.

The bank provided 6.6 billion rupees for bad loans, up from 1.8 billion rupees a year earlier.

Sri Lanka’s central bank cut rates and printed money in March/April 2018 and July/August triggering runs on the rupee.

The currency collapse lend to a contraction in domestic demand and bad loans as sales fell at companies and costs also rose due to the currency collapse.

Fee and commission income was flat at 2.4 billion rupees.

There was a loss of 2.3 billion rupees in trading which includes forex losses (on borrowings) but also gains of 6.6 billion rupees on other income indicating forex gains or profits of rupee dollar swaps that give protection for borrowings.





Many Sri Lankan banks have borrowed dollars and passed on the risk to the central bank through swaps, helping show a higher volume of high risk gross official reserves, analysts say.

Gross assets grew 4.97 percent to 1.36 billion rupees while net assets grew only 0.7 percent to 137 billion rupees. (Colombo/May16/2020)

COMB and SAMP gave a lifetime opportunity for an investor

Sri Lanka’s Combank to target financial products for women with IFC

ECONOMYNEXT – Commercial Bank of Ceylon, Sri Lanka’s largest private bank by assets, will offer financial products designed for women and women owned businesses backed by Washington-based International Finance Corporation.

“Sri Lankan women are recognized as highly entrepreneurial, owning nearly a quarter of the micro, small and medium sized enterprises in the country,” IFC said.

“Most are micro-sized enterprises, with the number of women owned business falling drastically as the business size increases.

“While over 80 percent of women have an account at a financial institution, only 17 percent have borrowed money.”

IFC said it will help Commerical Bank develop specially-designed products and services for women, especially those who own small and medium sized businesses (SMEs).

The advisory assistance to ComBank comes from IFC’s Banking on Women (BOW) program, which is supported by the government of Australia under the IFC-DFAT Women in Work program. It comes as Coronavirus crisis is hurting businesses.

“This engagement becomes even more critical as the world faces an unprecedented crisis straining public health system and constraining economic activity,” Rosy Khanna, Regional Director for Financial Institutions Group for IFC Asia and the Pacific said.

“Therefore, it becomes even more vital that we scale up access to finance for women and women-led small and medium sized enterprises, who will bear the brunt of this ensuing liquidity crisis.

S Renganathan, Chief Executive Officer of ComBank said the bank had previously led several initiatives to boost access to female entrepreneurs and new partnership will broaden their horizons further.

“…[W]e also hope that this will send a strong signal to other financial institutions in the market on the significance of increased and improved access to financial services as a means of bridging a critical gap in the country,” Khanna said.


IFC said one million small and medium enterprises of which 14 percent were women owned had generated 2.25 million jobs and contributed 52 percent to gross domestic product.

But over 30 percent of SMEs have unmet financing needs, with a financing gap estimated at 13.7 billion dollars.

In June, IFC invested $100 million in ComBank, 50 million US dollars through IFC’s 8 billion US dollar COVID-19 fast track financing facility, and another 50 million dollars through a private placement of shares.(Colombo/July14/2020)

Sri Lanka’s Commercial Bank expects 5-6 percent credit growth 2020, buys ISBs

ECONOMYNEXT – Sri Lanka’s Commercial Bank of Ceylon, the island’s largest private bank is expecting 5-6 percent credit growth in 2020 but stronger growth the following year, a top official has said.

Chairman Dharma Dheerasinghe was quoted in Bloomberg Newswires as saying that credit demand will pick up next year with stronger overall economic growth expected.

Dheerasinghe said credit demand was seen from the export sector, manufacturing and domestic wholesale and retail trade. The bank was ready to lend. Import trade and personal banking was weak.

With the overall economy also set to pick up next year, loans growth was expected strengthen.

Commercial Bank had bought sovereign bonds when prices fell, he said.

Sri Lanka’s sovereign bond prices fell as the rupee fell sharply in March and April.

Prices have since recovered. (Colombo/Aug08/2020)

COMB/COMB.X Research paper by CT CLSA SECURITIES

BUY
12M N:
Price Target : Rs.103.7
±% Potential : +31.6

3Q2020 Results Update
❑ COMB reported a 3Q2020 net profit of Rs.3,693mn (EPS of Rs.3.5; -25% YoY) broadly in
line with our expected EPS of Rs.3.6, YoY earnings were slightly impacted due to relatively
higher impairment charges. Capital gains on FI Trading for 3Q2020 stood at Rs.2.5bn.
❑ On 17 Nov 2020, through its fiscal budget for 2021E, the Gov’t of Sri Lanka proposed to
enact the corporate income tax reduction for banks by -400bps to 24% for banks w.e.f. 1
Jan 2020 whilst also proposing a 0.25% Covid tax on revenue for corporates.
❑ COMB’s NP forecasts for 2020E and 2021E are revised up by +8% and +4% to
Rs.14,915mn (-18% YoY EPS contraction) and to Rs.21,692mn (+43% YoY EPS growth, off a
low base) respectively. Revisions are largely attributable to revised spreads, fund growth,
ETR, impairment and opex assumptions.
❑ During October 2020, COMB received new capital worth Rs.9.22bn into its CET-I capital
with freshly issued 115mn shares to IFC (and its related parties) making its cumulative
shareholding increase to ~14.7%.
❑ The Voting share of COMB underperformed the ASPI during the past month, three months
and YoY by -3%, -19% and -21% (non voting underperformed by -3%, -18% and -22%)
respectively.
❑ On revised earnings, COMB voting share trades on par with the sector on PE (and book)
multiples of 5.7X (PBV - 0.59X) for 2020E and 4.0X (PBV - 0.54X) for 2021E. The less liquid
non voting share trades at a 15% discount to the voting share.
❑ We maintain COMB’s rating at a Buy with target price set at Rs.103.7 for its Voting share
based on average of estimated PBV and Residual Income models which indicate a 12M
upside potential of +31.6%
COMB-N share is valued at Rs.110.3 based on residual income model with target cost
of equity set at 18.0%. On a PBV basis we derive a value of Rs.97.2 on a forward PBV
multiple of 0.72X.

Commercial Bank of Ceylon
COMB.N0000
Share Price    7 Day       1 Year
           83.6 -       0.1% 3.8%

Second-quarter 2021 earnings released.

The company reported a strong second-quarter result with improved earnings, revenues and profit margins.

Second quarter 2021 results:

Revenue: LK₨15.7b (up 21% from 2Q 2020).
Net income: LK₨5.51b (up 53% from 2Q 2020).
Profit margin: 35% (up from 28% in 2Q 2020). 
The increase in margin was driven by higher revenue.

Over the last 3 years on average, earnings per share has increased by 2% per year but the company’s share price has fallen by 10% per year, which means it is significantly lagging earnings.

Commercial Bank of Ceylon
COMB.N0000
Share Price     7 Day 1 Year

                 85.3 0.7% 6.3%

The price target increased to LK₨106.

Up from LK₨93.51, the current price target is an average from 3 analysts.
• New target price is 24% above the last closing price of LK₨85.30.
• Stock is up 6.3% over the past year.