JKSB Full Year Highlights_LB Finance PLC (LFIN)_FY16
​LFIN reported a 70% YoY increase in full year earnings for FY16, exceeding our forecast of Rs. 3.1bn on the back of a stronger than expected fourth quarter performance, in which profit grew by 93% YoY, helped partly by write backs of over provisioning for impairment (following refinements to system driven impairment calculations) and a 15% YoY decline in tax expenses. Full year bottom line growth for FY16 was driven largely by 1) a moderate increase in net interest income (+12% YoY), stemming from healthy loan book growth amid a contraction in NIMs; and 2) a sharp reduction in impairment charges (-79% YoY) supported by i) better debt recovery/collections coupled with an overall improvement in asset quality (LFIN’s NPL ratio dropped below 3.5% for FY16 vs. 5.15% in FY15); and ii) a lower LGD (Loss Given Default) ratio, due to an increase in market prices of secondhand vehicles. Net loan book growth of 28% for full year FY16 was primarily driven by a strong increase in vehicle leasing disbursements.
•JKSB is one of 15 founding members of the Colombo Stock Exchange with roots in share trading dating back to 1896, and is a subsidiary of John Keells Holdings PLC (JKH), the largest listed entity on the Colombo Stock Exchange with a market capitalization of US$ 1.3bn.
•JKSB’s core client base is Foreign Institutional Investors, Local Institutions and HNWI’s
•JKSB has a co-branded Research tie up with CIMB and a Research Referral agreement with Credit Suisse, along with trade execution relationships with several other global and regional securities firms.
•JKSB’s trade execution partners include Credit Suisse, CIMB, Merrill Lynch, Exotix, Daiwa, Convergex, Deutsche Asia Securities and Morgan Stanley
•JKSB is a research contributor to Bloomberg on ‘KEEL’
•The JKSB Research Universe covers 72 stocks across 15 sectors, with most Research efforts focused on approximately 45 of the more liquid counters.
•The JKSB Universe constitutes 67% of total market cap and approximately 80% of turnover at the CSE.
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