Global Bank Equity Specialist, Creative Portfolios

Paul Hollingworth

Global Bank Equity Specialist

Creative Portfolios

Equity Bottom-Up

Far Eastern International Bank / Equity Bottom-Up

Far Eastern International Bank Ltd. was founded in 1992 and is headquartered in Taipei, Taiwan. The bank operates 55 branches in Taiwan, as well as an overseas branch in Hong Kong.The bank balances its consumer division (58% of Loans) specializing in mortgages with its corporate business (42% of Loans), backed by Time Deposits funding (64% of Deposits) and to a lesser extent by transaction accounts (36%).The PH Score™ of Far Eastern International Bank is favorable given amelioration in Efficiency, in NIM/Spread, in Capital Adequacy, and in Provisioning. There was though some lightweight erosion in Profitability and some sharp NPL deterioration from a position of relative strength accompanied by a drop in LLRs as a % of NPLs from elevated levels. The PH Score™ though would have been even higher but for a very slight drop on Profitability.Relative to closely matched counterparts by size*, 2845 commands better Capitalisation and Liquidity than its counterparts and has a more diversified Income stream by non-Interest Income/Operating Revenues. However, Profitability, NIM, and Efficiency Ratios, while stable or improving, are below the median as testament to the characteristics of the National System more than anything else.In addition, Earnings Quality could be better given the weight of trading gains within Operating Income.<div class="content-highlight">A FV of 7% and a PBV of 0.74x are not unattractive. These are below thresholds of 10% and 1x, respectively. The Earnings Yield, at 8.3%, is somewhat nondescript. A Dividend Yield of 3.1% is a bonus. The bank commands robust fundamental momentum and value-quality characteristics as measured the PH Score™. Within our universe of global banks, 2845 inhabits the top decile by VFM (Valuation, Fundamentals, and momentum). This is not a gung-ho narrative but relatively low-risk and a stolid unglamorous proposition irrespective of political noise and taking in consideration C-19 dynamics.</div> *Taichung Commercial, Wuxi Rural, Union Bank of Taiwan, O-Bank, Jiangsu Changshu Rural, Luzhou Bank, Jiangsu Zhangjagang Rural, Jiangsu Jiangyin Rural, Jilin Jiutai Rural.

Far Eastern International Bank Ltd. was founded in 1992 and is headquartered in Taipei, Taiwan. The bank operates 55 branches in Taiwan, as well as an overseas branch in Hong Kong.The bank balances its consumer division (58% of Loans) specializing in mortgages with its corporate business (42% of Loans), backed by Time Deposits funding (64% of Deposits) and to a lesser extent by transaction accounts (36%).The PH Score™ of Far Eastern International Bank is favorable given amelioration in Efficiency, in NIM/Spread, in Capital Adequacy, and in Provisioning. There was though some lightweight erosion in Profitability and some sharp NPL deterioration from a position of relative strength accompanied by a drop in LLRs as a % of NPLs from elevated levels. The PH Score™ though would have been even higher but for a very slight drop on Profitability.Relative to closely matched counterparts by size*, 2845 commands better Capitalisation and Liquidity than its counterparts and has a more diversified Income stream by non-Interest Income/Operating Revenues. However, Profitability, NIM, and Efficiency Ratios, while stable or improving, are below the median as testament to the characteristics of the National System more than anything else.In addition, Earnings Quality could be better given the weight of trading gains within Operating Income.A FV of 7% and a PBV of 0.74x are not unattractive. These are below thresholds of 10% and 1x, respectively. The Earnings Yield, at 8.3%, is somewhat nondescript. A Dividend Yield of 3.1% is a bonus. The bank commands robust fundamental momentum and value-quality characteristics as measured the PH Score™. Within our universe of global banks, 2845 inhabits the top decile by VFM (Valuation, Fundamentals, and momentum). This is not a gung-ho narrative but relatively low-risk and a stolid unglamorous proposition irrespective of political noise and taking in consideration C-19 dynamics. *Taichung Commercial, Wuxi Rural, Union Bank of Taiwan, O-Bank, Jiangsu Changshu Rural, Luzhou Bank, Jiangsu Zhangjagang Rural, Jiangsu Jiangyin Rural, Jilin Jiutai Rural.

2845 PH Score™ and VFM Signals Are Positive