Case Study on Commercial Bank and Sampath Bank of Sri Lanka
Added on 2022-05-23
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Table of Contents
Commercial Bank Background.............................................................................................. 2
Sampath Bank Background ................................................................................................... 2
Financial Industry in Sri Lanka ............................................................................................. 3
Common Stock Valuation Models......................................................................................... 4
Zero Growth Model/ Constant Dividend Model ................................................................. 4
Constant Dividend Growth Model ..................................................................................... 4
Supernormal Growth Model .............................................................................................. 4
Commercial Bank Stock valuation ........................................................................................ 5
Sampath Bank Stock Valuation ............................................................................................. 6
Conclusion ............................................................................................................................ 8
References ............................................................................................................................ 8
Table of Contents
Commercial Bank Background.............................................................................................. 2
Sampath Bank Background ................................................................................................... 2
Financial Industry in Sri Lanka ............................................................................................. 3
Common Stock Valuation Models......................................................................................... 4
Zero Growth Model/ Constant Dividend Model ................................................................. 4
Constant Dividend Growth Model ..................................................................................... 4
Supernormal Growth Model .............................................................................................. 4
Commercial Bank Stock valuation ........................................................................................ 5
Sampath Bank Stock Valuation ............................................................................................. 6
Conclusion ............................................................................................................................ 8
References ............................................................................................................................ 8
2
Commercial Bank Background
Commercial Bank of Ceylon PLC is Sri Lanka's largest private sector commercial bank, as
well as the country's third largest bank overall. In terms of total assets, which totaled $1.2
billion, as of the conclusion of the year, the country's GDP was Rs. 1.736 trillion (USD 9.285
billion) 2020. It is the only private-sector bank with this designation Sri Lanka's Central Bank
has identified Sri Lanka is classified as a higher-tier domestic system important Financial
Institution (D-SIB).
This bank began as Eastern Bank in 1920, when it opened a branch on Chatham Street in
Fort. During the 1930s and 1940s, Barclays Bank purchased Eastern Bank's stock. Chartered
Bank purchased Barclays Bank's shares, as well as the shares of the principal shareholders'
family, in 1957. In 1969, Chartered Bank merged with Eastern Bank of Ceylon to form
Commercial Bank of Ceylon Ltd, a local bank in Ceylon.
In 1969, the late Justice V. Manikkavasakar became the first Chairman of Commercial Bank
of Ceylon Plc. Former Chief Justice Sripavan has served on the Board of Directors as a Non-
Executive Director since April 2017.
Commercial Bank is the only Sri Lankan bank to have been recognized among the World's
Top 1000 Banks on a consistent basis since 2008, and has won numerous international and
local honors in recent years. Commercial Bank has around 265 branches in Sri Lanka and
employs approximately 5,000 people.
Sampath Bank Background
Sampath Bank PLC was founded in 1986 and listed on the Colombo Stock Exchange's main
board in 1987. Since its beginnings Sampath Bank is still going strong to expand, with an
ever-increasing role a key part in the country's economic development Sri Lankans and its
people.
With 229 locations, 391 ATMs, and an unparalleled number of digital channels, there are a
plethora of banking options available today. 4,011 employees, and customer in more than 2.6
million dollars and a market capitalization of more than a billion dollars. Sampath Bank is the
largest bank in India, with a market capitalization of Rs 68.6 billion.
Sampath Bank was granted the titles of ‘Best Commercial Bank 2017' and ‘Best Commercial
Bank 2018' in recognition of its industry-leading status.
Commercial Bank Background
Commercial Bank of Ceylon PLC is Sri Lanka's largest private sector commercial bank, as
well as the country's third largest bank overall. In terms of total assets, which totaled $1.2
billion, as of the conclusion of the year, the country's GDP was Rs. 1.736 trillion (USD 9.285
billion) 2020. It is the only private-sector bank with this designation Sri Lanka's Central Bank
has identified Sri Lanka is classified as a higher-tier domestic system important Financial
Institution (D-SIB).
This bank began as Eastern Bank in 1920, when it opened a branch on Chatham Street in
Fort. During the 1930s and 1940s, Barclays Bank purchased Eastern Bank's stock. Chartered
Bank purchased Barclays Bank's shares, as well as the shares of the principal shareholders'
family, in 1957. In 1969, Chartered Bank merged with Eastern Bank of Ceylon to form
Commercial Bank of Ceylon Ltd, a local bank in Ceylon.
In 1969, the late Justice V. Manikkavasakar became the first Chairman of Commercial Bank
of Ceylon Plc. Former Chief Justice Sripavan has served on the Board of Directors as a Non-
Executive Director since April 2017.
Commercial Bank is the only Sri Lankan bank to have been recognized among the World's
Top 1000 Banks on a consistent basis since 2008, and has won numerous international and
local honors in recent years. Commercial Bank has around 265 branches in Sri Lanka and
employs approximately 5,000 people.
Sampath Bank Background
Sampath Bank PLC was founded in 1986 and listed on the Colombo Stock Exchange's main
board in 1987. Since its beginnings Sampath Bank is still going strong to expand, with an
ever-increasing role a key part in the country's economic development Sri Lankans and its
people.
With 229 locations, 391 ATMs, and an unparalleled number of digital channels, there are a
plethora of banking options available today. 4,011 employees, and customer in more than 2.6
million dollars and a market capitalization of more than a billion dollars. Sampath Bank is the
largest bank in India, with a market capitalization of Rs 68.6 billion.
Sampath Bank was granted the titles of ‘Best Commercial Bank 2017' and ‘Best Commercial
Bank 2018' in recognition of its industry-leading status.
3
In Sri Lanka, the ‘Best Retail Bank 2017' was awarded by World Finance Magazine,
established in the United Kingdom, for the fourth year in a row Moreover, Sampath Bank has
won for the fourth time in five years. Has been named "Sri Lanka's Best Bank “awarded the
prestigious Euro Money Awards for Business Excellence 2017.
Financial Industry in Sri Lanka
Commercial Bank and Sampath Bank operate in the financial sector. Sri Lanka's financial
industry, like that of other countries, is made up of both formal and informal sectors. Other
markets, such as the capital market and the money market, have a limited role in allowing the
efficient and effective allocation and deployment of resources in the economy, whereas
banking institutions dominate the formal financial sector. The informal financial sector, on
the other hand, is unorganized and mostly provides short-term lending services based on
personal relationships. According to studies, the informal sector plays a significant role as a
source of income credit for consumption loans to low-income families (CBSL 2005).
A sound and robust financial system relies on the efficient operations and stability of
important financial institutions and markets. As a result, many steps have been made to
assure strong financial positions, effective risk management, and corporate governance, as
well as to increase the availability of fast and accurate financial data in key financial
institutions. Financial markets are still being liberalized and expanded to allow for more
sophisticated cross-border trade and financial flows and activities. The gradual development
of the payment and settlement systems infrastructure has continued to support the proper
functioning of the financial system. The CBSL continually examines the essential
components of the financial system and their interaction with the real economy to detect
systemic risks and implement policies for crisis prevention and resolution in order to
maintain financially stable conditions.
In Sri Lanka, the ‘Best Retail Bank 2017' was awarded by World Finance Magazine,
established in the United Kingdom, for the fourth year in a row Moreover, Sampath Bank has
won for the fourth time in five years. Has been named "Sri Lanka's Best Bank “awarded the
prestigious Euro Money Awards for Business Excellence 2017.
Financial Industry in Sri Lanka
Commercial Bank and Sampath Bank operate in the financial sector. Sri Lanka's financial
industry, like that of other countries, is made up of both formal and informal sectors. Other
markets, such as the capital market and the money market, have a limited role in allowing the
efficient and effective allocation and deployment of resources in the economy, whereas
banking institutions dominate the formal financial sector. The informal financial sector, on
the other hand, is unorganized and mostly provides short-term lending services based on
personal relationships. According to studies, the informal sector plays a significant role as a
source of income credit for consumption loans to low-income families (CBSL 2005).
A sound and robust financial system relies on the efficient operations and stability of
important financial institutions and markets. As a result, many steps have been made to
assure strong financial positions, effective risk management, and corporate governance, as
well as to increase the availability of fast and accurate financial data in key financial
institutions. Financial markets are still being liberalized and expanded to allow for more
sophisticated cross-border trade and financial flows and activities. The gradual development
of the payment and settlement systems infrastructure has continued to support the proper
functioning of the financial system. The CBSL continually examines the essential
components of the financial system and their interaction with the real economy to detect
systemic risks and implement policies for crisis prevention and resolution in order to
maintain financially stable conditions.
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