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.

Event-Driven

Grupo Financiero Banorte SAB d / Event-Driven

<ul>
<li>Citibanamex legacy operations represent a series of challenges for the acquirer, which include its high cost base, bloated branch network and higher credit risk exposure to consumers and SMEs</li>
<li>The opportunity for an acquirer is access to a rich and stable deposit base with a relatively low loan-to-deposit ratio and Banamex’s fee generating AFORE pension administrator</li>
<li>Banamex is attracting much interest, which puts pressure on bidders to pay up, especially Banorte; we revisit our potential capital absorption calculations, but still see risk to Banorte’s dividend prospects</li>
</ul>


Citibanamex legacy operations represent a series of challenges for the acquirer, which include its high cost base, bloated branch network and higher credit risk exposure to consumers and SMEs
The opportunity for an acquirer is access to a rich and stable deposit base with a relatively low loan-to-deposit ratio and Banamex’s fee generating AFORE pension administrator
Banamex is attracting much interest, which puts pressure on bidders to pay up, especially Banorte; we revisit our potential capital absorption calculations, but still see risk to Banorte’s dividend prospects


CitiBanamex Legacy Operations – Revisiting Banorte’s Potential M&A Challenge and Opportunity

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Private Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ayasdi-inc" target="_blank" data-smartkarma-citation="entities:35954:1" rel="noopener">Ayasdi (0343503Z US)</a> is somewhat unique in it using a mathematical framework – topology, to analyse data sets and detect financial crime and fraud.</li>
<li>The company follows a quote-pricing model, but pricing is generally considered less expensive than the industry average.  </li>
<li>The growth of financial crime and the bioinformatics industry alongside improved recognition for the company can be expected to drive future revenues.</li>
</ul>



Ayasdi (0343503Z US) is somewhat unique in it using a mathematical framework – topology, to analyse data sets and detect financial crime and fraud.
The company follows a quote-pricing model, but pricing is generally considered less expensive than the industry average.  
The growth of financial crime and the bioinformatics industry alongside improved recognition for the company can be expected to drive future revenues.


AyasdiAI: Exposing Financial Crime Using Topology

<ul>
<li>Axis Bank’s acquisition of the Indian Citi consumer banking franchise makes strategic sense, bolstering its market share and scale especially in credit cards, wealth management and incrementally in core deposits</li>
<li>Strategy aside, Axis management’s execution needs to be totally on point to retain Citi clients and minimise the loss of key personnel given the acquisition’s seemingly full price tag</li>
<li>Axis Bank tops the year-to-date share performance among the large cap Indian bank peers; yet we believe that, with regard to the Citi deal, management still has to deliver</li>
</ul>


Axis Bank’s acquisition of the Indian Citi consumer banking franchise makes strategic sense, bolstering its market share and scale especially in credit cards, wealth management and incrementally in core deposits
Strategy aside, Axis management’s execution needs to be totally on point to retain Citi clients and minimise the loss of key personnel given the acquisition’s seemingly full price tag
Axis Bank tops the year-to-date share performance among the large cap Indian bank peers; yet we believe that, with regard to the Citi deal, management still has to deliver


Axis Bank-Citi India M&A; The Devil Is in the Client Retention and Integration Detail

<ul>
<li>Banorte delivered solid 1Q22 results; management is dangling the carrot of a multi-year shareholder dividend pay-out in 2022, implying a potential dividend yield of c7%</li>
<li>The potential catch is the real risk of Banorte acquiring the Citibanamex franchise, which could require capital and cash retention, thereby potentially curtailing the dividend prospects</li>
<li>In the event of Banorte acquiring Citibanamex, we believe that our calculations imply the likely risk of an equity cash call, which drives us to turn cautious on Banorte again</li>
</ul>


Banorte delivered solid 1Q22 results; management is dangling the carrot of a multi-year shareholder dividend pay-out in 2022, implying a potential dividend yield of c7%
The potential catch is the real risk of Banorte acquiring the Citibanamex franchise, which could require capital and cash retention, thereby potentially curtailing the dividend prospects
In the event of Banorte acquiring Citibanamex, we believe that our calculations imply the likely risk of an equity cash call, which drives us to turn cautious on Banorte again


Banorte – Potential M&A Raises Questions on Dividend Prospects

Specialist in Indian Banking and Economic Research

Hemindra Hazari

Equity Bottom-Up

<ul>
<li>Post announcement of the acquisition of Citibank India's consumer finance unit, Axis Bank has outperformed the market</li>
<li>However, Axis Bank shareholders need to be more cautious about whether the acquisition will deliver the returns that the market is expecting.</li>
<li>Competitors who either did not bid or lost out in the acquisition are focusing on poaching Citibank’s premier customers.</li>
</ul>


Post announcement of the acquisition of Citibank India's consumer finance unit, Axis Bank has outperformed the market
However, Axis Bank shareholders need to be more cautious about whether the acquisition will deliver the returns that the market is expecting.
Competitors who either did not bid or lost out in the acquisition are focusing on poaching Citibank’s premier customers.


Citi’s Well-Off Retail Clients May Not Travel Meekly to Axis Bank

United States

Citigroup Inc. is a diversified financial services holding company that provides a broad range of financial services to consumer and corporate customers. The Company services include investment banking, retail brokerage, corporate banking, and cash management products and services. Citigroup serves customers globally.

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Citigroup Inc (C US)

CitiBanamex Legacy Operations – Revisiting Banorte’s Potential M&A Challenge and Opportunity

Banorte to buy Banamex? We think it likely, and that competition is pushing up the price for a bank in need of opex cuts and better credit quality;...

Victor Galliano

AyasdiAI: Exposing Financial Crime Using Topology

Ayasdi is unique where it uses a mathematical framework – topology, to analyse data sets and detect financial crime and fraud. Most products are...

Shifara Samsudeen, ACMA, CGMA

Axis Bank-Citi India M&A; The Devil Is in the Client Retention and Integration Detail

Axis Bank’s purchase of the Indian Citi consumer banking franchise makes strategic sense; yet execution needs to be on point to retain Citi...

Victor Galliano

Banorte – Potential M&A Raises Questions on Dividend Prospects

Banorte management is proposing a big dividend pay-out in 2022, but there's a potential catch if Banorte acquires Citibanamex; it could require...

Victor Galliano

Citi’s Well-Off Retail Clients May Not Travel Meekly to Axis Bank

The acquisition will depend on the bulk of Citibank’s premier customers being retained by Axis Bank. Recent developments regarding the toxic work...

Hemindra Hazari

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