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>Among bigger cap GEM banks, we pick five longs and two shorts as our conviction calls; we add country-based equity risk premia to our screening process</li>
<li>Our core buys are Bank Mandiri from Indonesia, Hana Financial from South Korea, CIMB Group from Malaysia, Bradesco from Brazil and CCB from China; four of these are value picks</li>
<li>Our sells are Kotak Mahindra Bank and ICICI Bank from India, both richly valued larger cap banks that have benefited from past economic and political tailwinds with headwinds now emerging</li>
</ul>


Among bigger cap GEM banks, we pick five longs and two shorts as our conviction calls; we add country-based equity risk premia to our screening process
Our core buys are Bank Mandiri from Indonesia, Hana Financial from South Korea, CIMB Group from Malaysia, Bradesco from Brazil and CCB from China; four of these are value picks
Our sells are Kotak Mahindra Bank and ICICI Bank from India, both richly valued larger cap banks that have benefited from past economic and political tailwinds with headwinds now emerging


GEM Banks; Focus on Value Attributes and Returns Recovery Potential

External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

External broker reports(aggregated public sources)

HDFC securities is the best online trading platform for stocks, IPOs, mutual fund in India. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Thematic (Sector/Industry)

<ul><li>Kotak Mahindra Bank: Kotak Mahindra Bank’s (KMB) earnings were in line with estimates barring a one-off gain of INR27bn (net of tax) from the divestment of a stake in its general insurance subsidiary</li><li>Healthy loan growth (~19% YoY) was offset by a sharp decline in margins (26bps QoQ) and elevated credit costs (55bps annualised)</li><li>Deposit growth was muted (-0.3% QoQ) with a drop in current account balances and softer momentum in the active money pool (+2% QoQ), as the CASA ratio moderated further (43.4%, -210bps QoQ)</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Kotak Mahindra Bank: Kotak Mahindra Bank’s (KMB) earnings were in line with estimates barring a one-off gain of INR27bn (net of tax) from the divestment of a stake in its general insurance subsidiaryHealthy loan growth (~19% YoY) was offset by a sharp decline in margins (26bps QoQ) and elevated credit costs (55bps annualised)Deposit growth was muted (-0.3% QoQ) with a drop in current account balances and softer momentum in the active money pool (+2% QoQ), as the CASA ratio moderated further (43.4%, -210bps QoQ)Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

HSIE Results Daily: Kotak Mahindra Bank, Bharat Petroleum Corporation, Indian Hotels, RBL Bank

<ul><li>Given the rising competitive intensity for low-cost and granular deposits facing the banking system, loan-deposit ratios at historical highs, and expected rate cuts towards the back-end of FY25, we believe banks are faced with the challenge of quality deposit mobilisation, elevated funding costs (lagged deposit re-pricing) and softer incremental spreads</li><li>As banks and NBFCs navigate the growth-margin trade-off, we argue that the combination of lower growth and lower spreads is likely to keep valuations under check, especially of mid-sized, high-growth franchises</li><li>While we expect system-wide growth to decelerate by 90-100 bps from FY24 levels, we are conservative on incremental spreads across our coverage universe, pencilling in 50bps of rate cuts starting Q4FY25 (blended FY25 NIMs at 12-15bps below FY24)</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Given the rising competitive intensity for low-cost and granular deposits facing the banking system, loan-deposit ratios at historical highs, and expected rate cuts towards the back-end of FY25, we believe banks are faced with the challenge of quality deposit mobilisation, elevated funding costs (lagged deposit re-pricing) and softer incremental spreadsAs banks and NBFCs navigate the growth-margin trade-off, we argue that the combination of lower growth and lower spreads is likely to keep valuations under check, especially of mid-sized, high-growth franchisesWhile we expect system-wide growth to decelerate by 90-100 bps from FY24 levels, we are conservative on incremental spreads across our coverage universe, pencilling in 50bps of rate cuts starting Q4FY25 (blended FY25 NIMs at 12-15bps below FY24)Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Leveraged Financials: The Liquidity Conundrum

Head of Trading/ Partner, AceGama Advisors

Sankalp Singh

Head of Trading/ Partner

Proprietary Trading Desk

AceGama Advisors

Trading desk specializing in the Listed & OTC options strategies for risk management & investment purposes.

Event-Driven

<ul>
<li>IVs for Monthly &amp; Quarterly contracts rose as options market baked in additional risk premia for the Budget Announcement. </li>
<li>Vega bid &amp; Gamma offered  - Monthly IVs higher by +2.3 vols &amp; Weekly IVs lower by -0.5 vols.  Short-Dated IVs closed lower in spite of upcoming earnings events </li>
<li>Term structure is trading with a kinked shape, with Monthly IVs trading at a markup to rest of the curve</li>
</ul>


IVs for Monthly &amp; Quarterly contracts rose as options market baked in additional risk premia for the Budget Announcement. 
Vega bid &amp; Gamma offered  - Monthly IVs higher by +2.3 vols &amp; Weekly IVs lower by -0.5 vols.  Short-Dated IVs closed lower in spite of upcoming earnings events 
Term structure is trading with a kinked shape, with Monthly IVs trading at a markup to rest of the curve


EQD / NSE Vol Update / Vega Was Bid & Gamma Was Offered

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>
<a href="https://www.smartkarma.com/entities/canara-bank" target="_blank" data-smartkarma-citation="entities:543:1" rel="noopener">Canara Bank (CBK IN)</a> has seen its NPL ratio decline dramatically over the past several years, which is at complete odds with <a href="https://www.smartkarma.com/entities/bandhan-bank-ltd" target="_blank" data-smartkarma-citation="entities:26705:1" rel="noopener">Bandhan Bank Ltd (BANDHAN IN)</a> </li>
<li>Net profit is nearly 50% lower for <a href="https://www.smartkarma.com/entities/bandhan-bank-ltd" target="_blank" data-smartkarma-citation="entities:26705:1" rel="noopener">Bandhan Bank Ltd (BANDHAN IN)</a> while <a href="https://www.smartkarma.com/entities/canara-bank" target="_blank" data-smartkarma-citation="entities:543:1" rel="noopener">Canara Bank (CBK IN)</a> moved from a loss to the best profit on record </li>
<li>The loan-to-deposit ratio (LDR) of <a href="https://www.smartkarma.com/entities/bandhan-bank-ltd" target="_blank" data-smartkarma-citation="entities:26705:1" rel="noopener">Bandhan Bank Ltd (BANDHAN IN)</a> has come down from over 200% to 100%, but remains high; <a href="https://www.smartkarma.com/entities/canara-bank" target="_blank" data-smartkarma-citation="entities:543:1" rel="noopener">Canara Bank (CBK IN)</a> is gently widening to 77%</li>
</ul>



Canara Bank (CBK IN) has seen its NPL ratio decline dramatically over the past several years, which is at complete odds with Bandhan Bank Ltd (BANDHAN IN) 
Net profit is nearly 50% lower for Bandhan Bank Ltd (BANDHAN IN) while Canara Bank (CBK IN) moved from a loss to the best profit on record 
The loan-to-deposit ratio (LDR) of Bandhan Bank Ltd (BANDHAN IN) has come down from over 200% to 100%, but remains high; Canara Bank (CBK IN) is gently widening to 77%


India Banks - Divergent Trends at Canara and Bandhan Fundamentally Support NIFTY Bank Rebalancing

India

Kotak Mahindra Bank Limited is a full service commercial bank. The Bank offers a wide range of products and services such as personal, commercial, and corporate banking services, including deposit accounts, loans, and investments. Kotak Mahindra Bank serves customers in India.

Price Gauge
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Kotak Mahindra Bank (KMB IN)

GEM Banks; Focus on Value Attributes and Returns Recovery Potential

Top picks for bigger cap GEM banks include Bank Mandiri, Hana Financial, CIMB Group, Bradesco, and CCB, while Kotak Mahindra Bank and ICICI Bank...

Victor Galliano

HSIE Results Daily: Kotak Mahindra Bank, Bharat Petroleum Corporation, Indian Hotels, RBL Bank

Kotak Mahindra Bank: Kotak Mahindra Bank’s (KMB) earnings were in line with estimates barring a one-off gain of INR27bn (net of tax) from the...

HDFC Securities

Leveraged Financials: The Liquidity Conundrum

Our hypothesis remains anchored around strong retail deposit franchises and declining spreads over the next 12 months, coupled with the...

HDFC Securities

EQD / NSE Vol Update / Vega Was Bid & Gamma Was Offered

IVs rise as additional risk premia gets baked in for Budget Announcement. Kinked-shaped term structure with Monthly IVs trading at a markup to rest...

AceGama Advisors

India Banks - Divergent Trends at Canara and Bandhan Fundamentally Support NIFTY Bank Rebalancing

The Nifty Bank rebalancing that may see Bandhan Bank replaced by Canara Bank is a rebalancing that is also supported by divergent fundamentals, on...

Daniel Tabbush

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

GEM Banks; Focus on Value Attributes and Returns Recovery Potential

​Top picks for bigger cap GEM banks include Bank Mandiri, Hana Financial, CIMB Group, Bradesco, and CCB, while Kotak Mahindra Bank and ICICI Bank...

Victor Galliano

HSIE Results Daily: Kotak Mahindra Bank, Bharat Petroleum Corporation, Indian Hotels, RBL Bank

Kotak Mahindra Bank: Kotak Mahindra Bank’s (KMB) earnings were in line with estimates barring a one-off gain of INR27bn (net of tax) from the...

HDFC Securities

Leveraged Financials: The Liquidity Conundrum

Our hypothesis remains anchored around strong retail deposit franchises and declining spreads over the next 12 months, coupled with the...

HDFC Securities

EQD / NSE Vol Update / Vega Was Bid & Gamma Was Offered

IVs rise as additional risk premia gets baked in for Budget Announcement. Kinked-shaped term structure with Monthly IVs trading at a markup to rest...

AceGama Advisors

India Banks - Divergent Trends at Canara and Bandhan Fundamentally Support NIFTY Bank Rebalancing

The Nifty Bank rebalancing that may see Bandhan Bank replaced by Canara Bank is a rebalancing that is also supported by divergent fundamentals, on...

Daniel Tabbush

Top picks for bigger cap GEM banks include Bank Mandiri, Hana Financial, CIMB Group, Bradesco, and CCB, while Kotak Mahindra Bank and ICICI Bank...