In today’s briefing:
- Suruga Bank – Loans Down A Lot, Deposits Up Sharply, Cost/Income Up to 74%, Credit Costs +47% QoQ
- SBI Life: Best Bet to Play the Indian Life Insurance Sector – Initiating Coverage.
- Postcard from Kolkata | Can Old Habits Die Easy?
Suruga Bank – Loans Down A Lot, Deposits Up Sharply, Cost/Income Up to 74%, Credit Costs +47% QoQ
- The bank is seeing high growth in cash and deposits, with loans in decline, and the composition moving more toward government and corporate loans
- ALM does not appear strong, and without any easy way to reduce operating costs, the bank is now seeing cost/income surge to 74%
- Credit metrics on surface may appear fine, but the 47% QoQ rise in provision costs, suggests to us provisions were cut too much last year, and now there is normalization
SBI Life: Best Bet to Play the Indian Life Insurance Sector – Initiating Coverage.
- SBI Life leads the Private Life Insurers in India in terms of market share, thanks to exclusive access to Banca channel of the largest bank in the country.
- SBI Life has been one of the best-performing life insurers in terms of growth as well as margin expansion among peers in recent years, which we expect to continue.
- SBIL is our primary pick in the Indian Life Insurance space with an upside of ~24% and its relatively cheaper valuations offers a margin of safety to cover near-term risks.
Postcard from Kolkata | Can Old Habits Die Easy?
- We visit the ‘City of Joy,’ Kolkata, to understand the state of the industry, focusing on microfinance and the status of lenders concentrated in the region.
- Multiple factors argue for a cyclical bottom for lenders operating in West Bengal and Assam.
- We have been positive on Bandhan Bank Ltd (BANDHAN IN), but it is a play on cyclicality rather than a complete turnaround & transformation of its habits.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
