Daily Brief Financials: HDFC Bank, HDFC Limited, Bank Negara Indonesia Persero, Kemper Corp and more

• While HDFCB’s results have been somewhat lackluster over the past couple of quarters, this has been largely due to merger-related drags, tight liquidity and irrational competition in the marketplace.
• From a medium-to-long-term perspective, the growth prospects for HDFCB remain tremendously attractive despite its large size, as evident from its consistent market share gains in deposits.
• Q4FY24 earnings came largely in line with the expectation in terms of core earnings, except for one-off gain from an asset sale that was more than offset by floating provisions.

• HDFC Bank results to FYE24 are improving and we retain it as a buy, with pre-provision returns improving slightly QoQ and best in peer group NPL ratio and coverage
• Bank of Baroda is our core value Indian bank pick, for its undemanding valuations, healthy ROE and potential for NPL improvements
• Bandhan bank is a potential contrarian pick for its value attributes; we are cautious on State Bank of India for its delinquency risks, low core capital ratio 

• Bank Negara Indonesia (BBNI IJ) booked a solid set of 1Q2024 results driven by +9.6% YoY growth in loans, despite being hampered by higher cost of funds amid tighter liquidity.
• Loan growth was driven by corporate lending, with corporate SOE lending showing the strongest growth and consumer loans. Funding was driven by CASA growth which limited the squeeze on NIMs. 
• Bank Negara Indonesia booked strong growth in fee income and a reduction in provisions which helped to offset the margin squeeze. Valuations remain attractive on 1.2x FY2024E PBV.

• Kemper’s sale under this new structure in the third quarter of 2023 could boost shareholder value
• It would bring Kemper’s valuation closer to its peers in the industry
• Kemper’s profitable underwriting and unique business model make it an appealing investment for long-term value investors

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.