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>Of the six Malaysian banks screened, we keep value plays <a href="https://www.smartkarma.com/entities/rhb-bank-bhd" target="_blank" data-smartkarma-citation="entities:24161:1" rel="noopener">RHB Bank Bhd (RHBBANK MK)</a> and <a href="https://www.smartkarma.com/entities/cimb-group-holdings-bhd" target="_blank" data-smartkarma-citation="entities:68:1" rel="noopener">CIMB Group Holdings (CIMB MK)</a> on the buy list</li>
<li>RHB Bank is our top pick for its second from top post-provision profitability, for its high CET1 ratio not inhibiting its ROE, and for its undemanding PE and PBV valuations</li>
<li>CIMB remains our deep value pick with its solid CET1 ratio and premium pre-provision returns, despite its weaker credit quality; its modest valuations include a very attractive PEG ratio</li>
</ul>


Of the six Malaysian banks screened, we keep value plays RHB Bank Bhd (RHBBANK MK) and CIMB Group Holdings (CIMB MK) on the buy list
RHB Bank is our top pick for its second from top post-provision profitability, for its high CET1 ratio not inhibiting its ROE, and for its undemanding PE and PBV valuations
CIMB remains our deep value pick with its solid CET1 ratio and premium pre-provision returns, despite its weaker credit quality; its modest valuations include a very attractive PEG ratio


Malaysian Banks Data to June 2023 Screener; Stick with RHB Bank and CIMB

Thematic (Sector/Industry)

<ul>
<li>Among the large-cap EM Asia banks, we recommend CCB in China, HDFC Bank in India, Bank Mandiri in Indonesia and Hana Financial in South Korea</li>
<li>In LatAm, we turn positive on Banco do Brasil, for its big value attributes and lesser political risk; we turn cautious on Bradesco and stay cautious on Banorte in Mexico</li>
<li>Two large-cap names to watch are Credicorp in Peru and Standard Bank of South Africa; both have challenging macro-economic backdrops but sound “bottom up” credentials</li>
</ul>


Among the large-cap EM Asia banks, we recommend CCB in China, HDFC Bank in India, Bank Mandiri in Indonesia and Hana Financial in South Korea
In LatAm, we turn positive on Banco do Brasil, for its big value attributes and lesser political risk; we turn cautious on Bradesco and stay cautious on Banorte in Mexico
Two large-cap names to watch are Credicorp in Peru and Standard Bank of South Africa; both have challenging macro-economic backdrops but sound “bottom up” credentials


Large Cap GEM Bank Screener - Our Top Picks

<ul>
<li>Of the six Malaysian banks screened, we maintain RHB Bank and CIMB on the buy list; we add funding and liquidity metrics to our screens</li>
<li>RHB Bank is our top pick for its strong post-provision profitability, its high CET1 ratio understating its ROE, and it is attractive valuations on PE multiples and PBV ratios</li>
<li>CIMB remains our deep value pick as we believe it has potential to improve post-provision returns; the constructive return outlook combines positively with CIMB’s modest valuations, including its PEG ratio</li>
</ul>


Of the six Malaysian banks screened, we maintain RHB Bank and CIMB on the buy list; we add funding and liquidity metrics to our screens
RHB Bank is our top pick for its strong post-provision profitability, its high CET1 ratio understating its ROE, and it is attractive valuations on PE multiples and PBV ratios
CIMB remains our deep value pick as we believe it has potential to improve post-provision returns; the constructive return outlook combines positively with CIMB’s modest valuations, including its PEG ratio


Malaysian Banks March 2023 Results Screener; Maintaining RHB Bank and CIMB on Our Buy List

<ul>
<li>Of the six Malaysian banks screened, we keep RHB Bank and CIMB on the buy list; <a href="https://www.smartkarma.com/entities/public-bank-berhad" target="_blank" data-smartkarma-citation="entities:583:1" rel="noopener">PB Bank</a> and <a href="https://www.smartkarma.com/entities/malayan-banking-bhd" target="_blank" data-smartkarma-citation="entities:600:1" rel="noopener">Maybank</a> are quality but seem fully valued by comparison</li>
<li>RHB Bank has, in the December quarter, maintained its improved its pre-provision profitability versus its peers; RHB’s high CET1 ratio understates its ROE, and it is attractive on PE multiples</li>
<li>CIMB once again improved its positive post-provision returns which should support CIMB’s share price given its modest valuations and attractive PEG versus peers; its high NPL ratio is fully provisioned</li>
</ul>


Of the six Malaysian banks screened, we keep RHB Bank and CIMB on the buy list; PB Bank and Maybank are quality but seem fully valued by comparison
RHB Bank has, in the December quarter, maintained its improved its pre-provision profitability versus its peers; RHB’s high CET1 ratio understates its ROE, and it is attractive on PE multiples
CIMB once again improved its positive post-provision returns which should support CIMB’s share price given its modest valuations and attractive PEG versus peers; its high NPL ratio is fully provisioned


Malaysian Banks December 2022 Results Screener; Sticking with Buys on CIMB and RHB

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>Far too much volatility in credit costs, making clarity on earnings difficult</li>
<li>All core fee income items down sharply in quarter, credit cost delta main driver</li>
<li>Despite good lending growth, there is little to show for it in ROA and core income</li>
</ul>


Far too much volatility in credit costs, making clarity on earnings difficult
All core fee income items down sharply in quarter, credit cost delta main driver
Despite good lending growth, there is little to show for it in ROA and core income


Malaysia

RHB Bank BHD provides banking services. The Company offers commercial and consumer banking, corporate and investment banking, and international banking services. RHB also provides savings accounts, foreign currency accounts, home and travel insurance, and investment planning.

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RHB Bank Bhd (RHBBANK MK)

Malaysian Banks Data to June 2023 Screener; Stick with RHB Bank and CIMB

Among Malaysian banks, we like RHB Bank for strong profitability, premium CET1 ratio, healthy credit quality and undervalued stock, CIMB Group for...

Victor Galliano

Large Cap GEM Bank Screener - Our Top Picks

In EM Asia, we like CCB, HDFC Bank, Mandiri & Hana; in LatAm, we turn positive on Banco do Brasil, go cautious on Bradesco & remain cautious on...

Victor Galliano

Malaysian Banks March 2023 Results Screener; Maintaining RHB Bank and CIMB on Our Buy List

RHB Bank and CIMB are our buys; RHB Bank has strong post-provision profitability, a high CET1 ratio and attractive valuations, modestly valued CIMB...

Victor Galliano

Malaysian Banks December 2022 Results Screener; Sticking with Buys on CIMB and RHB

We keep RHB Bank and CIMB on the buy list for attractive PE multiples and PBV ratios as well as their improving return trends; PB Bank and Maybank...

Victor Galliano

RHB - Volatility

RHB's credit costs are characterized by a high degree of volatility, which is not something that we view as positive. Reversals hardly repeat...

Daniel Tabbush

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Malaysian Banks Data to June 2023 Screener; Stick with RHB Bank and CIMB

​Among Malaysian banks, we like RHB Bank for strong profitability, premium CET1 ratio, healthy credit quality and undervalued stock, CIMB Group for...

Victor Galliano

Large Cap GEM Bank Screener - Our Top Picks

In EM Asia, we like CCB, HDFC Bank, Mandiri & Hana; in LatAm, we turn positive on Banco do Brasil, go cautious on Bradesco & remain cautious on...

Victor Galliano

Malaysian Banks March 2023 Results Screener; Maintaining RHB Bank and CIMB on Our Buy List

RHB Bank and CIMB are our buys; RHB Bank has strong post-provision profitability, a high CET1 ratio and attractive valuations, modestly valued CIMB...

Victor Galliano

Malaysian Banks December 2022 Results Screener; Sticking with Buys on CIMB and RHB

We keep RHB Bank and CIMB on the buy list for attractive PE multiples and PBV ratios as well as their improving return trends; PB Bank and Maybank...

Victor Galliano

RHB - Volatility

RHB's credit costs are characterized by a high degree of volatility, which is not something that we view as positive. Reversals hardly repeat...

Daniel Tabbush

Among Malaysian banks, we like RHB Bank for strong profitability, premium CET1 ratio, healthy credit quality and undervalued stock, CIMB Group for...