Daily Brief Financials: State Bank Of India, Inter & Co, Moody's Corp and more

In today’s briefing:

Indian Banks Screener to December-End 2022: Credit Risks Rising
Inter & Co (INTR US) – No More StoneCo Stake Overhang, but the Fundamental Outlook Remains Tough
Moody’s Corp: Acquisition Of SCRiesgo & Other Drivers

Indian Banks Screener to December-End 2022: Credit Risks Rising

Our Indian bank profitability and credit quality screens, in terms of credit quality metrics to end-December 2022, continued in a constructive trend
This is reflected in NPA ratios and cost of risk trends; but Indian banks have to face increased NPA headwinds, especially if funding and liquidity tightens around Adani Group companies
We remain negative on State Bank of India, especially given the concerns around the Adani Group, and also ICICI Bank; we remain positive on higher quality HDFC Bank

StoneCo has disposed of its remaining 4.2% stake in Inter &Co, slamming the door shut on plans for a leading Brazilian neobank-paytech partnership originally announced in May 2021
Stone acquired 5% of Inter for BRL2.5bn in June 2021; the extent of the fintech market malaise means that currently BRL2.5bn (c USD500m) would buy close to 50% of Inter
This StoneCo stake disposal at least removes the Inter shares’ overhang risk; yet despite this technical relief, we reiterate that Inter’s fundamental outlook remains a challenging one

Moody’s delivered a strong result in the quarter with an all-around beat and a major update with respect to the acquisition of SCRiesgo to expand its presence in Latin America.
This quarter demonstrates the resilience and positive momentum of Moody’s Analytics (MA) and also reflects the impact of the challenging market situations on Moody’s Investor Services (MIS).
Across MA, Moody’s enhanced several workflow offerings via analytics and data integration, creating new products to meet rising consumer needs.

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