Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Victor Galliano is an experienced equity banks analyst, having covered Latin America banks and non-bank financials for over 12 years, as well as more recently covering the Italian banks. He has worked in sell side equity research for 30 years in a career spanning Barclays, HSBC, BBVA LatInvest, Barings and NatWest.
Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.
The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Financials & FinTech research

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Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Event-Driven

<ul>
<li>Multiple announcements from <a href="https://www.smartkarma.com/entities/banco-inter-sa" target="_blank" data-smartkarma-citation="entities:28162:1" rel="noopener">Banco Inter SA (BIDI11 BZ)</a> have been well received by the market</li>
<li>The key news item, in our view, is that <a href="https://www.smartkarma.com/entities/stoneco-ltd" target="_blank" data-smartkarma-citation="entities:27564:1" rel="noopener">StoneCo Ltd (STNE US)</a>  is to invest BRL2.5bn in Banco Inter via new shares issued in an up and coming follow on issue, as a cornerstone investor</li>
<li>StoneCo is also granted the right of first refusal in the case of change of control of Banco Inter, for a period of 6 years</li>
<li>Banco Inter and StoneCo are to explore business opportunities that can leverage the strength of both companies to enhance growth potential</li>
<li>In addition, Banco Inter is also studying and assessing a potential corporate reorganization including the migration of its Banco Inter shareholder base to holdco Inter Platform Inc, shares of which would be intended to be NASDAQ listed</li>
<li>These developments do not change our view on Banco Inter; we have argued in past reports that it would need more capital to grow and it has now announced a follow-on, even if the potential downside risks has been offset by the prospective new investor StoneCo and the potential for their commercial partnerships</li>
<li>Our view is that both Banco Inter and StoneCo, although sound partners, have a major challenge to justify their premium valuations, at a time when competition across the board in digital financial services in Brazil is only intensifying</li>
<li>Risks to our bearish views on Banco Inter and StoneCo include better than expected revenue growth from cross-selling and synergies in their partnership, as well as better than expected loan growth and merchant services penetration</li>
</ul>


Multiple announcements from Banco Inter SA (BIDI11 BZ) have been well received by the market
The key news item, in our view, is that StoneCo Ltd (STNE US)  is to invest BRL2.5bn in Banco Inter via new shares issued in an up and coming follow on issue, as a cornerstone investor
StoneCo is also granted the right of first refusal in the case of change of control of Banco Inter, for a period of 6 years
Banco Inter and StoneCo are to explore business opportunities that can leverage the strength of both companies to enhance growth potential
In addition, Banco Inter is also studying and assessing a potential corporate reorganization including the migration of its Banco Inter shareholder base to holdco Inter Platform Inc, shares of which would be intended to be NASDAQ listed
These developments do not change our view on Banco Inter; we have argued in past reports that it would need more capital to grow and it has now announced a follow-on, even if the potential downside risks has been offset by the prospective new investor StoneCo and the potential for their commercial partnerships
Our view is that both Banco Inter and StoneCo, although sound partners, have a major challenge to justify their premium valuations, at a time when competition across the board in digital financial services in Brazil is only intensifying
Risks to our bearish views on Banco Inter and StoneCo include better than expected revenue growth from cross-selling and synergies in their partnership, as well as better than expected loan growth and merchant services penetration


Banco Inter & StoneCo – Interesting Concept, Challenging on Execution

Inter & Co

Banco Inter & StoneCo – Interesting Concept, Challenging on Execution