However, profits before provisioning and taxes came in at Rs.5.5bn, 4% lower than CAL's estimate of Rs. 5.8bn, on the back of narrowing margins and slower asset growth.
The recurring earnings have beaten CAL's forecast largely due to 23% higher than expected provision reversals and a lower than expected tax charge.
For now, we maintain our FY13 forecast and reiterate a Buy on PLC based on a FY13 PE of 4.6x and PBV of 0.8x. However, we intend to run sensitivities on FY13 profits based on PLC's NPLs, currently at 0.7% (vs. 1.3% in 2011), likely being unsustainably low.