Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

Indiabulls Housing Finance / Equity Bottom-Up

<ul>
<li>IndiaBulls reported FY 3Q22 results of INR 3.0 bn, improving INR 167 mn (5.8%) linked quarter; results were of poor quality; </li>
<li>Net new NPLs had increased INR 7.1 bn for the quarter for an annualized rate of increase of 139.6%; and </li>
<li>Given the continued break in credit, loss reserves appear light close to INR 28 bn – representing seven quarters of PBT and 17.1% of stated equity. </li>
</ul>


IndiaBulls reported FY 3Q22 results of INR 3.0 bn, improving INR 167 mn (5.8%) linked quarter; results were of poor quality; 
Net new NPLs had increased INR 7.1 bn for the quarter for an annualized rate of increase of 139.6%; and 
Given the continued break in credit, loss reserves appear light close to INR 28 bn – representing seven quarters of PBT and 17.1% of stated equity. 


IndiaBulls Housing Finance – Manufactured Bottom-Line

Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Macroeconomics

<ul>
<li>In the first 9 months of FY2021/22, the fiscal deficit was 50% of the budgeted estimate for the full-year. More realistically, this year's fiscal deficit will be 5.7% of GDP. </li>
<li>Given more credible revenue estimates, the deficit for FY2022/23 will decline to 4.9%  of GDP. The government's lower borrowing requirement will help crowd-in private investment. </li>
<li>A 35%YoY increase in public investment will fund a multimodal connectivity rollout, while carbon-fibre will reach all villages, solar and 5G will be harnessed to create a tech virtuous circle. </li>
</ul>


In the first 9 months of FY2021/22, the fiscal deficit was 50% of the budgeted estimate for the full-year. More realistically, this year's fiscal deficit will be 5.7% of GDP. 
Given more credible revenue estimates, the deficit for FY2022/23 will decline to 4.9%  of GDP. The government's lower borrowing requirement will help crowd-in private investment. 
A 35%YoY increase in public investment will fund a multimodal connectivity rollout, while carbon-fibre will reach all villages, solar and 5G will be harnessed to create a tech virtuous circle. 


India: Budget Aims to Generate Concentric Virtuous Circles & Crowd-In Private Capex

<ul>
<li>SBI results were highly managed in FY 2Q22, and going forward it’s difficult for anyone to take both these results and this bank very seriously; </li>
<li>SBI reported FY 3Q22 results of INR 84.3 bn, improving INR 8.1 bn (10.6%) linked quarter. Volatility between loss provisions and operating expenses continued; and </li>
<li>Net new NPLs accelerated 18.5% annualized, and SBI’s reserves are short INR 568 tn – over five quarters of pre-tax results. </li>
</ul>


SBI results were highly managed in FY 2Q22, and going forward it’s difficult for anyone to take both these results and this bank very seriously; 
SBI reported FY 3Q22 results of INR 84.3 bn, improving INR 8.1 bn (10.6%) linked quarter. Volatility between loss provisions and operating expenses continued; and 
Net new NPLs accelerated 18.5% annualized, and SBI’s reserves are short INR 568 tn – over five quarters of pre-tax results. 


State Bank of India – Rules Don’t Apply

<ul>
<li>HDFC Ltd (HDFC.IN) [HDFC] reported FY 3Q22 results of INR 30.5 bn, decreasing INR 6.2 bn (16.9%) linked quarter basis reflecting a lack of dividends received; </li>
<li>Given the INR 4.2 bn in NCO during FY 3Q22, net new NPLs increased INR 11.7 bn or 23.3% on an annualized basis; and </li>
<li>We also find that HDFC’s reserve still needs shoring up by another INR 185 bn or over a year of PBT.   </li>
</ul>


HDFC Ltd (HDFC.IN) [HDFC] reported FY 3Q22 results of INR 30.5 bn, decreasing INR 6.2 bn (16.9%) linked quarter basis reflecting a lack of dividends received; 
Given the INR 4.2 bn in NCO during FY 3Q22, net new NPLs increased INR 11.7 bn or 23.3% on an annualized basis; and 
We also find that HDFC’s reserve still needs shoring up by another INR 185 bn or over a year of PBT.   


<ul>
<li>IndusInd reported FY 3Q22 bottom-line results improved 4.8% linked quarter, driven by stronger core revenues and a lower provision; </li>
<li>NCOs remain elevated and show no sign of abating, and net new NPLs increased 31.6% annualized; and </li>
<li>IndusInd’s reserve needs to increase closer to 75% with a shortfall of INR 30 bn – representing two quarters of pre-tax results. </li>
</ul>


IndusInd reported FY 3Q22 bottom-line results improved 4.8% linked quarter, driven by stronger core revenues and a lower provision; 
NCOs remain elevated and show no sign of abating, and net new NPLs increased 31.6% annualized; and 
IndusInd’s reserve needs to increase closer to 75% with a shortfall of INR 30 bn – representing two quarters of pre-tax results. 


India

iShares MSCI India Index ETF is an exchange-traded fund registered in Singapore. The Fund seeks to provide investment results that, before expenses, closely correspond to the performance of the MSCI India Index. The Fund invests all or substantially all of its assets in shares comprising the MSCI India Index in substantially the same weightings as constituted in the underlying index.

iShares MSCI India Index ETF (INDIA SP)

IndiaBulls Housing Finance – Manufactured Bottom-Line

I-BULLS: IndiaBulls reported a poor quality QOQ FY 3Q22 results increase of 5.8%.Net new NPLs increased at 139.6% annualized, while loss reserves...

Thomas J. Monaco

India: Budget Aims to Generate Concentric Virtuous Circles & Crowd-In Private Capex

Revenue receipts in Apr-Dec21 reached 96% of the FY2021/22 target, while spending was merely in line. With deficits declining this year & next,...

Prasenjit K. Basu

State Bank of India – Rules Don’t Apply

SBI: It’s difficult for anyone to take this bank very seriously. SBI reported a QOQ FY 3Q22 results increase of 10.6%, as volatility between loss...

Thomas J. Monaco

HDFC Ltd. – Lack of Conservatism

HDFC: HDFC reported FY 3Q22 results decline of 16.9% QOQ. Net new NPLs increased 23.3% on an annualized basis, and HDFC’s reserve still needs...

Thomas J. Monaco

IndusInd Bank – Stabilizing Somewhat

INDUSIND BANK: IndusInd reported FY 3Q22 bottom-line results improvement of 4.8% linked quarter, driven by stronger core revenues. NCOs remain...

Thomas J. Monaco