Founder Evidente. Top rated quantitative analyst, Evidente

Sam Ferraro

Founder Evidente. Top rated quantitative analyst

Evidente

Evidente is an independent financial education firm that delivers innovative financial advice to wholesale investors, including active long only funds, hedge funds, pension funds, and sovereign wealth funds, in Australia and globally.  Drawing on academic research in asset pricing, behavioural finance and portfolio construction, Evidente provides wholesale investors with commercial solutions to stock selection and asset allocation decisions across equities and other asset classes.

Equity Bottom-Up

Australia & New Zealand Bankin / Equity Bottom-Up

<ul><li>In the first instalment of a series of reports on global banking, Evidente undertakes a comprehensive review of Australia's major banks.  These are challenging times for bank CEOs who are confronted by community concerns around poor corporate culture and a prudential regulator enforcing more conservative capital requirements than many offshore peers.</li><li>There have been tectonic shifts in the major banks' balance sheets in recent years which are likely to continue.  On the asset side, NAB and ANZ have abandoned their global aspirations in the United Kingdom and Asia respectively, and are looking to shed some of their wealth management businesses.  On the funding side, the sector has substantially strengthened its capital position.</li><li>Stronger capital positions have reduced the sector's ROE prospects.  But with the banks trading on their largest discount to non-financial industrials since around 2000, I believe that investors have become too pessimistic about the sector.  Despite risks to the outlook for non-performing loans, the sector represents compelling value at these levels. </li><li>I have more conviction around the sector call than stock selection, but I expect ANZ and NAB to benefit most from their strategic shift to a simpler, more streamlined, focussed and geographically concentrated business models.</li></ul>

In the first instalment of a series of reports on global banking, Evidente undertakes a comprehensive review of Australia's major banks.  These are challenging times for bank CEOs who are confronted by community concerns around poor corporate culture and a prudential regulator enforcing more conservative capital requirements than many offshore peers.There have been tectonic shifts in the major banks' balance sheets in recent years which are likely to continue.  On the asset side, NAB and ANZ have abandoned their global aspirations in the United Kingdom and Asia respectively, and are looking to shed some of their wealth management businesses.  On the funding side, the sector has substantially strengthened its capital position.Stronger capital positions have reduced the sector's ROE prospects.  But with the banks trading on their largest discount to non-financial industrials since around 2000, I believe that investors have become too pessimistic about the sector.  Despite risks to the outlook for non-performing loans, the sector represents compelling value at these levels. I have more conviction around the sector call than stock selection, but I expect ANZ and NAB to benefit most from their strategic shift to a simpler, more streamlined, focussed and geographically concentrated business models.

Australia's Major Banks - Shrinking to Greatness, Expanding to Safety