Citizens Development and Business Finance PLC (CDB) released its earnings for the quarter ending June 2015 today. The report shows that net interest income declined 2% from previous quarter while EPS decline by 10%. Compared to the same period last year though, CDB grew net interest income by 3% and EPS by 25%.
CDB reported EPS as 4.01/- which is in fact before deducting non-controlling interests. EPS attributable to the equity holders according to our calculation was 3.99/-
Loan book grew by almost Rs. 2b during the quarter while deposit base showed a slight decline. The deficit has been covered by other interest bearing borrowings.
Similar to few other finance institutions, total capital ratio (11.3%) has been declining over the last few quarters and is hovering just above the minimum requirement of 10% while Core capital is comfortably above its minimum requirement. Although interest margin has seen a decline, CDB has managed to achieve a ROE of 19.6% during the quarter (as reported) against 17.8% for the previous quarter. NPL remained at 3.2% while no branch additions have been reported.
CDB has shown consistent earnings and growing dividends and had paid 3.50/- per share earlier this month.
CDB closed at 106.90/- [-1.10] which is 1.4x book value and 7.6x LTM EPS with a 3.3% DY.
