Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Equity Bottom-Up

<ul>
<li>HDFC Bank results to FYE24 are improving and we retain it as a buy, with pre-provision returns improving slightly QoQ and best in peer group NPL ratio and coverage</li>
<li>Bank of Baroda is our core value Indian bank pick, for its undemanding valuations, healthy ROE and potential for NPL improvements</li>
<li>Bandhan bank is a potential contrarian pick for its value attributes; we are cautious on State Bank of India for its delinquency risks, low core capital ratio </li>
</ul>


HDFC Bank results to FYE24 are improving and we retain it as a buy, with pre-provision returns improving slightly QoQ and best in peer group NPL ratio and coverage
Bank of Baroda is our core value Indian bank pick, for its undemanding valuations, healthy ROE and potential for NPL improvements
Bandhan bank is a potential contrarian pick for its value attributes; we are cautious on State Bank of India for its delinquency risks, low core capital ratio 


Indian Banks Screener FYE24, Part 1: We like Quality Name HDFC Bank, Baroda Is the Value Pick

Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

<ul>
<li>Canara Bank has seen stunning profit expansion over the past several years </li>
<li>Lower NPLs can drive lower credit costs to support profit expansion further</li>
<li>ROE moved from 11.7% to 17.3% over the past several years</li>
</ul>


Canara Bank has seen stunning profit expansion over the past several years 
Lower NPLs can drive lower credit costs to support profit expansion further
ROE moved from 11.7% to 17.3% over the past several years


Canara Bank - Radically Lower NPLs and Sharply Expanding Net Profit

India BFSI - Long-Short - Equity Research Analyst

Raj S, CA, CFA

Artoval Advisors

Art’o’val stands for Art of Valuation. Artoval Advisors LLP is a professionally run advisory firm catering to various financial advisory services including Valuation, Investment Research, Training, Accounting, CFO Services and other ancillary services.

We are passionate about what we do and strongly believe in working with our clients as their extended teams. With Artoval Advisors as their trusted partner, our clients find it easy to achieve efficiency in service delivery without compromising on quality.

True Art of Valuation

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hdfc-bank-ltd-4b6b7a92-9087-468d-9dbe-ab169e77f014" target="_blank" data-smartkarma-citation="entities:558:1" rel="noopener">HDFC Bank (HDFCB IN)</a> has been the most successful bank in India over the last two decades, delivering best-in-class performance consistently; Things changed drastically with the merger with HDFC Ltd.</li>
<li>The negatives outweigh the positives in the near-term from the merger; the synergies, which are significant, are long-term in nature and hence would take time to play out.</li>
<li>We remain long-term believers, but it is a "Short" in the short-term as we expect further -20% correction in valuations</li>
</ul>



HDFC Bank (HDFCB IN) has been the most successful bank in India over the last two decades, delivering best-in-class performance consistently; Things changed drastically with the merger with HDFC Ltd.
The negatives outweigh the positives in the near-term from the merger; the synergies, which are significant, are long-term in nature and hence would take time to play out.
We remain long-term believers, but it is a "Short" in the short-term as we expect further -20% correction in valuations


HDFC Bank (HDFCB IN): Initiating Coverage – Long Term Compounder; But "Short" For Now

IDFC First Bank Limited / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/idfc-first-bank-limited" target="_blank" data-smartkarma-citation="entities:26934:1" rel="noopener">IDFC First Bank Limited (IDFCBK IN)</a>  has built a banking franchise that holds the best promise among the mid-sized banks in India for long-run outperformance.</li>
<li>A high-yielding and retail-oriented loan book, track record of pristine asset quality, superior funding profile boosting best-in-class retail deposit base, and incrementally improving unit economics.</li>
<li>We value the stock as a long-term Buy, with 35% upside in near-term, as the bank continues to realize the benefits of its increasing scale on its earnings profile.</li>
</ul>



IDFC First Bank Limited (IDFCBK IN)  has built a banking franchise that holds the best promise among the mid-sized banks in India for long-run outperformance.
A high-yielding and retail-oriented loan book, track record of pristine asset quality, superior funding profile boosting best-in-class retail deposit base, and incrementally improving unit economics.
We value the stock as a long-term Buy, with 35% upside in near-term, as the bank continues to realize the benefits of its increasing scale on its earnings profile.


2024 High Conviction Idea: IDFCBK IN: Best-In-Class Midsize Bank in India; Long-Term Performance

Thematic (Sector/Industry)

<ul>
<li>There are few banking systems in the world or in Asia-Pacific that show such a steady but significant reduction in bad loans as in India. </li>
<li>Credit costs can remain subdued for sometime with better NPL levels and this can also lead the way to better loan volume, as loan officers take on more risk.</li>
<li>Banking penetration remains incredibly low in India compared with almost all countries in the region, and this means that there can be sustained robust growth.</li>
</ul>


There are few banking systems in the world or in Asia-Pacific that show such a steady but significant reduction in bad loans as in India. 
Credit costs can remain subdued for sometime with better NPL levels and this can also lead the way to better loan volume, as loan officers take on more risk.
Banking penetration remains incredibly low in India compared with almost all countries in the region, and this means that there can be sustained robust growth.


India Banks - Far Better Credit Metrics Seem Real, With Exceptional Long-Term Loan Growth Outlook

India

Punjab National Bank provides financial services such as corporate and personal banking, industrial finance, agricultural finance, financing of trade and international banking. The Company provides services to domestic conglomerates, medium and small industrial units, exporters, non-resident Indians and multinational companies.

Canara Bank Ltd. provides a full range of banking services throughout India. The Group's activities include retail banking, commercial and personal banking, investment management, treasury & NRI services, cash management and assorted ATM facilities.

Bank of Baroda owns and operates commercial banks in India.  The Group's banks provide the traditional forms of banking services, including CD's, Credit Card services and a variety of car loans, in addition to gold banking and a range of insurance services.  The Group also owns IBU International Finance Limited, an international banking company in Hong Kong.

Union Bank of India Limited provides a full range of banking services throughout India. The Company's activities include retail banking, commercial and personal banking, investment management, treasury and NRI services, cash management and assorted ATM facilities. Union Bank has an online tele-banking facility for all its core banking customers.

IDBI Bank Limited provides a range of banking and financial services. The Bank's services include fund-based operations, such as venture capital and fee-based activities, which include merchant banking and debenture trusteeship.

Indian Overseas Bank operates some 1,429 banking branches in India, as well as six branches in overseas locations.  The Group's banks provide loan and deposit schemes, Internet banking, and a full range of banking services.

YES BANK Limited provides banking services. The Bank offers deposits, personal loans, e-banking, trade finance, corporate, and business banking services. YES BANK serves the food and agribusiness, life sciences, healthcare, biotechnology, telecommunications, media, information technology, and infrastructure development industries in India.

UCO Bank provides a full range of banking services throughout India. UCO Bank operates over 1,700 banking branches in India, as well as four branches in overseas locations.

Indian Bank is a full service bank owned by the Government of India. The Bank offers a wide range of services including a foreign currency banking unit at Colombo and specialized overseas branches at Chennai, Bangalore, and Mumbai exclusively for handling foreign exchange  transactions arising out of export, import, remittances and non resident Indian business.

Bank of India, through its subsidiaries, provides corporate, commercial, personal banking, retail, rural, and development banking.  The Group specializes its services towards corporate and medium businesses, in addition to upmarket retail customers.

CIMB Group Holdings Berhad provides commercial banking and related financial services. The Company and its subsidiaries, operate as a regional universal bank offering a full range of financial products and services, covering corporate and investment banking, consumer banking, treasury, insurance and asset management.

Bank of the Philippine Islands, through its subsidiaries, provides commercial banking services. The Company's products includes ATM, debit card system, credit card, electronic cash card, internet platform and other services.

BDO Unibank Inc provides banking services. The Bank offers saving accounts, investment, loans, credit and debit cards, remittance, insurance, and trade financing services. BDO Unibank serves customers in Philippines.

Bank for Investment and Development of Vietnam provides commercial banking services. The Company offers deposits, personal loans, e-banking, guarantees, and trade finance for customers, corporate, and financial institutions. Bank for Investment also offers foreign exchange, money market, derivatives, and debt market services.

Bank of Nanjing Co., Ltd. operates commercial banking businesses. The Company offers deposits, loans, settlement, discounting, financial bond issuance, government bond underwriting, bank guarantee, and other related financial services. Bank of Nanjing provides services for enterprises and individuals.

First Financial Holding Co., Ltd. is a holding company.  Through its subsidiaries, the Company accepts deposits, provides loans and discount, letters of credit, and guarantee services, invests in marketable securities, provides securities brokerage and investment services, as well as provides insurance services.

E.Sun Financial Holding Company Ltd. is a holding company.  Through its subsidiaries, the Company provides banking, brokerage and dealer services.

Bank of Beijing Company Ltd. attracts deposits and offers commercial banking services.  The Bank offers short-, medium- and long-term loans, insurance, foreign exchange, international settlement, government bonds, and other products and services.

Shinkin Central Bank is a central bank for shinkin banks nationwide, operating as a cooperative financial institution.  The Bank has developed businesses in a variety of fields that contribute the shinkin banking industry.  The Bank's services include enhancement of the credit standing, efficient use of shikin bank's surplus funds, and settlement of domestic exchange transaction.

Taiwan Cooperative Financial Holding, through subsidiaries, offers financial services.  The Company offers commercial banking, asset management, bills finance, and securities brokerage services.

IndusInd Bank Limited is a Mumbai-based Indian new generation bank established in 1994. The Bank provides a range of banking and financial services including  wholesale banking, credit monitoring, risk management, tele-banking, investment banking and commercial lending. IndusInd Bank operates branches throughout India as well as an office in Dubai and London.

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Indusind Bank (IIB IN)

Indian Banks Screener FYE24, Part 1: We like Quality Name HDFC Bank, Baroda Is the Value Pick

We provide new 4QFYE24 data on 4 of the 10 Indian banks that have reported in our enlarged peer group; we rate HDFC Bank a buy, as well as Baroda...

Victor Galliano

Canara Bank - Radically Lower NPLs and Sharply Expanding Net Profit

Radically lower NPLs and sharply higher net profit can continue with benign credit costs, especially as Loss Loans are down a lot. ROE and ROA are...

Daniel Tabbush

HDFC Bank (HDFCB IN): Initiating Coverage – Long Term Compounder; But "Short" For Now

HDFC Bank has been the most successful bank in India for long, but things changed drastically with the merger with HDFC Ltd. The negatives outweigh...

Raj S, CA, CFA

2024 High Conviction Idea: IDFCBK IN: Best-In-Class Midsize Bank in India; Long-Term Performance

Outlook on IDFC First Bank's profitability and market valuation is moving towards the top quadrant consisting of the best banking peers in India,...

Raj S, CA, CFA

India Banks - Far Better Credit Metrics Seem Real, With Exceptional Long-Term Loan Growth Outlook

India's banks are seeing consistent and strong reduction of NPLs, which appears to be real, not cosmetic. There is vast scope for more loan...

Daniel Tabbush

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