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>We add value plays Bandhan and UBI to the buy list alongside HDFC Bank and Baroda, turning neutral from negative on SBI. Bandhan is our core Indian bank pick, UBI benefits from improving return trends</li></ul>

We add value plays Bandhan and UBI to the buy list alongside HDFC Bank and Baroda, turning neutral from negative on SBI. Bandhan is our core Indian bank pick, UBI benefits from improving return trends

Indian Banks Screener FYE24, Part 2: Bandhan and UBI added to the buy list

Specialist in Indian Banking and Economic Research

Hemindra Hazari

<ul>
<li>The rejection by shareholders of an independent director's re-appointment reveals the growing influence of proxy advisory firms on institutional investors</li>
<li>Indian corporate boards appear ill-prepared to engage with stakeholders to provide valuable feedback </li>
<li>Stakeholders Relationship Committee of the Board needs to reactivated and re-oriented to engage with stakeholders to improve governance</li>
</ul>


The rejection by shareholders of an independent director's re-appointment reveals the growing influence of proxy advisory firms on institutional investors
Indian corporate boards appear ill-prepared to engage with stakeholders to provide valuable feedback 
Stakeholders Relationship Committee of the Board needs to reactivated and re-oriented to engage with stakeholders to improve governance


Need to Reactivate the Stakeholders’ Relationship Committee in the Wake of the IndusInd Bank Fiasco

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>Foreign investors sold ~5.7m shares of <a href="https://www.smartkarma.com/entities/indusind-bank-ltd" target="_blank" data-smartkarma-citation="entities:1558:1" rel="noopener">Indusind Bank (IIB IN)</a> from July to September. That selling has pushed foreign room above the key 15% threshold.</li>
<li>With foreign room crossing 15%, passive trackers will need to buy a chunk of <a href="https://www.smartkarma.com/entities/indusind-bank-ltd" target="_blank" data-smartkarma-citation="entities:1558:1" rel="noopener">Indusind Bank (IIB IN)</a> stock at the end of November.</li>
<li>There will be positioning on <a href="https://www.smartkarma.com/entities/indusind-bank-ltd" target="_blank" data-smartkarma-citation="entities:1558:1" rel="noopener">Indusind Bank (IIB IN)</a> though it appears some of that was taken off in the last couple of days.</li>
</ul>


Foreign investors sold ~5.7m shares of Indusind Bank (IIB IN) from July to September. That selling has pushed foreign room above the key 15% threshold.
With foreign room crossing 15%, passive trackers will need to buy a chunk of Indusind Bank (IIB IN) stock at the end of November.
There will be positioning on Indusind Bank (IIB IN) though it appears some of that was taken off in the last couple of days.


IndusInd Bank (IIB IN): Passive Buying Coming Up as Foreign Room Crosses Key Threshold

<ul>
<li>
<a href="https://www.smartkarma.com/entities/indusind-bank-ltd" target="_blank" data-smartkarma-citation="entities:1558:1" rel="noopener">Indusind Bank (IIB IN)</a> reported 51% attrition in FY2023 from 37% in FY2022</li>
<li>In the annual report the directors completely ignored acknowledging or discussing the attrition apart from the mandatory disclosure</li>
<li>The sharply rising attrition indicates poor human resource policies in recruitment and training which adversely impact cost management</li>
</ul>



Indusind Bank (IIB IN) reported 51% attrition in FY2023 from 37% in FY2022
In the annual report the directors completely ignored acknowledging or discussing the attrition apart from the mandatory disclosure
The sharply rising attrition indicates poor human resource policies in recruitment and training which adversely impact cost management


Indusind Bank: When Half the Staff Left, Why Didn’t Independent Directors Think It Worth Mentioning?

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>There is renewed interest in HDFC Bank given potential for stock index re-balancing as well as an acquisition for one of its subsidiaries </li>
<li>The story with HDFC Bank is strong regardless of these new ancillary positives, where growth is incredibly stable, and credit metrics shine</li>
<li>We remind that the amalgamation of HDFC Finance remains new, and gains are still not fully reflected, but a look at costs/assets shows progress</li>
</ul>


There is renewed interest in HDFC Bank given potential for stock index re-balancing as well as an acquisition for one of its subsidiaries 
The story with HDFC Bank is strong regardless of these new ancillary positives, where growth is incredibly stable, and credit metrics shine
We remind that the amalgamation of HDFC Finance remains new, and gains are still not fully reflected, but a look at costs/assets shows progress


HDFC Bank - Rebalancing & MUFG Acquisition Benefit, Ongoing NPL Stability & Profit Strength

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 2: Bandhan and UBI added to the buy list

We add value plays Bandhan and UBI to the buy list alongside HDFC Bank and Baroda, turning neutral from negative on SBI. Bandhan is our core Indian...

Victor Galliano

Need to Reactivate the Stakeholders’ Relationship Committee in the Wake of the IndusInd Bank Fiasco

Indian companies need to reactivate the Stakeholders Relationship Committee to engage with immediate stakeholders to improve governance and to...

Hemindra Hazari