In today’s briefing:
- SBI Shinsei Bank (8303) Calls Its EGM and Appraisal Rights Seekers Prepare for Battle
- Itau Unibanco Holding S.A.: Initiation of Coverage – Business Strategy & Key Drivers
- HDFC Bank: Seasonality Impacts Q1 Growth, But All Is Well
- Discover Financial Services: Initiation of Coverage – Business Strategy & Key Drivers
- American International Group (AIG): Initiation of Coverage – Recent Catastrophe Impact & Other Developments
- PNC Financial Services Group: Initiation of Coverage – Impact Of Banking Crisis & Other Developments
- Prudential Financial Inc.: Initiation of Coverage – The Deerpath Capital Acquisition & Other Major Drivers
SBI Shinsei Bank (8303) Calls Its EGM and Appraisal Rights Seekers Prepare for Battle
- The SBI Holdings Tender Offer for SBI Shinsei Bank (8303 JP) was completed about four weeks ago, and in something of a surprise, only 3.7% of 26.98% minority holdings tendered.
- The stock traded above terms every day during the Tender Offer Period. People accumulated in order to pursue their appraisal rights later. That is big.
- This week, SBI Shinsei announced the schedule of dates relating to the squeezeout EGM. The record date was early. The reverse stock split announced is as expected, possibly game-able.
Itau Unibanco Holding S.A.: Initiation of Coverage – Business Strategy & Key Drivers
- This is our first report on one of the largest private sector banks in Brazil, Itau Unibanco.
- The loan portfolio showcased growth despite signs of a slowdown, with the SMEs loan portfolio registering an increase of 9.2% for Q1 2023 compared to Q1 2022.
- We initiate coverage on the stock of Itau Unibanco Holding S.A. with a ‘Hold’ rating.
HDFC Bank: Seasonality Impacts Q1 Growth, But All Is Well
- HDFC Bank (HDFCB IN) reported weak QoQ growth in deposits and advances. This is however temporary due to seasonality. The growth trajectory for rest of the year remains intact.
- HDFCB continues to invest aggressively into expanding its geographical presence to drive growth. Benign credit cost enables investments without impacting the ROA.
- HDFC Ltd (“HDFC”) has been also merged into HDFCB effective Jul 1. The merged entity is carrying sufficient liquidity at 120%+ LCR to meet the additional CRR and SLR needs.
Discover Financial Services: Initiation of Coverage – Business Strategy & Key Drivers
- This is our first report on Discover Financial Services, a prominent consumer finance company.
- Net interest income grew significantly, supported by an expanding net interest margin driven by higher prime rates.
- Additionally, the company introduced Discover Financial Health Improvement Fund to improve the financial well-being of low- and middle-income individuals, communities, and small enterprises.
American International Group (AIG): Initiation of Coverage – Recent Catastrophe Impact & Other Developments
- This is our first report on insurance behemoth, AIG.
- In Q1 2023, AIG reported a net income of $3.9 billion, marking a significant turnaround from the net loss of $7.9 billion reported in Q1 2022.
- Concurrently, AIG continues to monitor market conditions and regulatory approvals as it considers reducing its ownership interest in Corebridge via a secondary offering, amongst other options.
PNC Financial Services Group: Initiation of Coverage – Impact Of Banking Crisis & Other Developments
- This is our first report on PNC Financial Services Group, a major bank and financial service company.
- Despite a rise in the accumulated other comprehensive loss by $400 million during Q2, the tangible book value rose to $77.80.
- We initiate coverage on the stock of PNC Financial Services Group with a ‘Hold’ rating.
Prudential Financial Inc.: Initiation of Coverage – The Deerpath Capital Acquisition & Other Major Drivers
- This is our first report on Prudential Financial, Inc., a major global player in financial services and insurance.
- Prudential kept transforming throughout the quarter to become less reliant on the market and better able to produce steady, long-term growth.
- The company also had the financial strength to navigate the changing macroeconomic climate because of its rock-solid balance sheet.
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