Aug 2006 Financial News

Ansa Merchant Bank Releases Half Year Results

Aug 29, 2006

For the Half Year ended June 30, 2006 Ansa Merchant Bank Limited (AMBL) reported Earnings Per Share (EPS) of $0.58, which was 6.45% down on the comparable period for 2005.

Total Income increased by a substantial 31.87% to $228.54 million; however this was neutralized by a sharp 50.43% increase in Total Expenses, from $114.71 million to $172.56 million. Thus, Operating Income fell to $55.97 million, a drop of 4.46% or $2.6 million.
The increase in Total Expenses was due to extraordinary and unexpected claims from the Company’s General Insurance Operation. The Chairman has stated that this level of claims is not expected to continue into the second half of the year.

The Effective Tax Rate for the period stood at 12.19% compared to 11.36% as at the Half Year ended 2005. The Profit after Tax amounted to $49.13 million and while this was down 5.40% on last year’s comparable figure, the Chairman found it to be satisfactory.

The Chairman is also pleased with the 17% growth in the Investment Portfolio for the half year. This he said was achieved by strengthening the relationships with the Company’s North American and European advisors and maximizing regional opportunities, without compromising AMBL’s risk profile.

The Board of Directors is confident that the second half will produce good results and as such have maintained an Interim Dividend of $0.10. This will be paid on October 27, 2006 to shareholders on the Register on October 16, 2006. The Ex-Dividend Date for this stock is October 10, 2006.


The share price of AMBL currently stands at $19.49. Based on the current results and our expectations for the second half of the year, we have revised our Forecasted EPS to $1.20. At the current market price and our Forecasted EPS, this share is trading at a multiple of 16.24 times. Given that this share usually trades in the band of 15 to 18 times, we recommend a HOLD at this time.


Gia Singh
WISE Research Team