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Global Bank Equity Specialist, Creative Portfolios

Paul Hollingworth

Global Bank Equity Specialist

Creative Portfolios

Equity Bottom-Up

Sacombank or <a href="https://www.smartkarma.com/entities/saigon-thuong-tin-commercial" target="_blank" data-smartkarma-citation="entities:650:1" rel="noopener">Saigon Thuong Tin Commercial (STB VN)</a> is dedicated to mainly consumer lending and to a lesser extent the corporate segment, backed by source of funding from time deposits.FY20/19 results show positive fundamental momentum and trends with improvement in Profitability, in Efficiency, in NIM and Spread, in Asset Quality, and in Provisioning while Capital Adequacy and Liquidity showed some erosion. Growth in “Core Income” remains vibrant, especially in Net Interest Income, underpinned by forceful credit expansion and margin/spread enhancement, but also to a lesser extent in Fee and Commission streams.The improvement in Efficiency is noteworthy. We have seen the same trend in Thailand with the notable exception of BBL. In fact, Efficiency gains are a theme in global banking over the last 12 testing months.<div class="content-highlight">
A FV of 7%, a PBV of 1.07x, and an Earnings Yield of 9.0% are not unappealing. The bank commands both a high PH Score™ (7.7) and top quartile VFM ranking.
The PH Score™ is a fundamental momentum-quantamental score that scores banks according to changes in value-quality. The Score encompasses Profitability, Operating Efficiency, Liquidity, Capital, Asset Quality, and Coverage as well as a valuation variable. Scores lie between 0 and 10, with higher scores representing more positive signs. The PH Score™ was back tested over 2007-17 for global banks and conclusively shows progressively higher returns across quintiles ranked by Score. 
VFM combines the PH Score™ with technical and valuation filters.
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Sacombank or Saigon Thuong Tin Commercial (STB VN) is dedicated to mainly consumer lending and to a lesser extent the corporate segment, backed by source of funding from time deposits.FY20/19 results show positive fundamental momentum and trends with improvement in Profitability, in Efficiency, in NIM and Spread, in Asset Quality, and in Provisioning while Capital Adequacy and Liquidity showed some erosion. Growth in “Core Income” remains vibrant, especially in Net Interest Income, underpinned by forceful credit expansion and margin/spread enhancement, but also to a lesser extent in Fee and Commission streams.The improvement in Efficiency is noteworthy. We have seen the same trend in Thailand with the notable exception of BBL. In fact, Efficiency gains are a theme in global banking over the last 12 testing months.
A FV of 7%, a PBV of 1.07x, and an Earnings Yield of 9.0% are not unappealing. The bank commands both a high PH Score™ (7.7) and top quartile VFM ranking.
The PH Score™ is a fundamental momentum-quantamental score that scores banks according to changes in value-quality. The Score encompasses Profitability, Operating Efficiency, Liquidity, Capital, Asset Quality, and Coverage as well as a valuation variable. Scores lie between 0 and 10, with higher scores representing more positive signs. The PH Score™ was back tested over 2007-17 for global banks and conclusively shows progressively higher returns across quintiles ranked by Score. 
VFM combines the PH Score™ with technical and valuation filters.


Saigon Thuong: Efficiency Gains and “Core Income” Growth Drivers