Daily Brief Financials: Citigroup Inc, State Bank Of India, Longfor Properties, International General Insura and more

• Total impairment costs are soaring now at Citigroup up to USD3.5bn in 4Q23 compared with an average charge of USD1.8-1.9bn in the recent preceding quarters.
• Net interest income appears to be topping out now, as there is generally a lagged impact on funding in a rising rate environment.
• The implications of the Citi results, steeped in geopolitical risk, are not positive for large global banks, major US banks in particular and HSBC Holdings (5 HK) specifically.

• State Bank Of India (SBIN IN) is the best-performing PSU bank in India and shows clear convergence with private peers across fundamental metrics beyond what its valuations might suggest
• Medium-Term ROE Forecast of 16% to 18% and loan growth forecast of 14% to 16%; ROA ~1.2% consistently; Strong fee income; successful cross-selling through subsidiaries; Strong asset quality.
• P/BV is cheap at 1.3x FY25e, compared private peers’ valuations of 2.5x to 3.0x. SBIN can potentially re-rate to P/BV of ~1.6x FY25e in the near term (~35% upside).

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Lippo Malls Indonesia Retail Trust

Key points (machine generated)

• Significant investment in insurance companies, particularly niche providers, has been seen since the Covid pandemic.
• The S&P Insurance ETF has outperformed the SPY by 25% over the past 3 years, indicating the success of these investments.
• Despite their growth in intrinsic value, the share prices of many insurance companies are not reflecting this, possibly due to overlooking the potential impact of higher interest rates on future profitability. However, some companies have managed their investment portfolios prudently and are in a favorable position.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.