SMFG (8316 JP):  Standing Out in a Crowd

SMFG (8316 JP): On Target But Drifting Off Radar

SMFG (8316 JP): Close But No Cigar  (1Q FY3/2020 Results Comment)

Asset Light Is the Right Strategy for Undervalued SMFG; Lifting the FVE to JPY 5,000 Per Share

SMTH Seeks Higher Margin Assets to Offset Rising Pressures from Higher Costs of Dollar Funding

Global Bank Equity Specialist, Creative Portfolios

Paul Hollingworth

Global Bank Equity Specialist

Creative Portfolios

Equity Bottom-Up

Sumitomo Mitsui Financial Group / Equity Bottom-Up

Sumitomo Mitsui Financial Group (8316 JP)

<a href="https://www.smartkarma.com/entities/217" target="_blank" data-smartkarma-citation="entities:217:1">Sumitomo Mitsui Financial Group (8316 JP)</a> is just too cheap to ignore, with its deposits base priced in line with bargain basement NPL-heavy Greek and Italian levels.The bank exhibits very strong fundamental progression as embodied in its quintile 1 PH Score ™ which captures value-quality signals from our proprietary model spanning the global banking landscape.Management has a defined and coherent strategy based on efficiencies, core profit areas and internal synergies, technology, and broadening its Asia-centric penetration. SMFG launched a JPY50bn 3-year reorganisation programme quite recently. Management targets a greater streamlined model with robotic process automation to replace 4,000 jobs over 3 years, a FinTech/digitalisation/internet banking/ big data/AI  drive to support Productivity and Modernization, plus a digital transformation of branch network to next generation units.Focus is on high profit areas (global markets, cards, aircraft and railcar leasing). Non-Interest Income is targeted to reduce dependency on QE-sensitive revenues at home given headwinds from monetary policy and tighter global regulatory rules. This includes a deeper development of “asset light” trust banking and asset management which can benefit from closer integration of bank-securities. Management is concentrating on an increase in internal “chain” synergies and cross-selling as well as domestic and global integration initiatives (credit card, wealth management and wholesale opportunity via bank-securities, SMCC and Cedyna synergies, merger of SMBC Nikko and SMBC Friend).A biometric authentication platform was launched last year year. While WOW! is a branchless mass market banking service in Indonesia with 4 million customers, SMFG investment <a href="https://www.smartkarma.com/entities/483" target="_blank" data-smartkarma-citation="entities:483:1">Bank Tabungan Pensiunan Nasional Tbk Pt (BTPN IJ)</a> operates  a smart phone-based digital banking service (Jenius) which targets HNWs.Given that Loan demand is lacklustre and Lending Margins are thin at home, 30% of the loan portfolio now relates to international markets. Megabanks are extending their tentacles into an “Asia-centric” growth space.  SMFG has a stake in aforementioned  BTPN <a href="https://www.smartkarma.com/entities/483" target="_blank" data-smartkarma-citation="entities:483:1"></a>in Indonesia, Vietnam’s Eximbank and Cedyna, Cambodia’s Acleda, and <a href="https://www.smartkarma.com/entities/341" target="_blank" data-smartkarma-citation="entities:341:1">Bank Of East Asia (23 HK)</a>. This looks like an entirely plausible growth-enhancing strategy.

Sumitomo Mitsui Financial Group (8316 JP) is just too cheap to ignore, with its deposits base priced in line with bargain basement NPL-heavy Greek and Italian levels.The bank exhibits very strong fundamental progression as embodied in its quintile 1 PH Score ™ which captures value-quality signals from our proprietary model spanning the global banking landscape.Management has a defined and coherent strategy based on efficiencies, core profit areas and internal synergies, technology, and broadening its Asia-centric penetration. SMFG launched a JPY50bn 3-year reorganisation programme quite recently. Management targets a greater streamlined model with robotic process automation to replace 4,000 jobs over 3 years, a FinTech/digitalisation/internet banking/ big data/AI  drive to support Productivity and Modernization, plus a digital transformation of branch network to next generation units.Focus is on high profit areas (global markets, cards, aircraft and railcar leasing). Non-Interest Income is targeted to reduce dependency on QE-sensitive revenues at home given headwinds from monetary policy and tighter global regulatory rules. This includes a deeper development of “asset light” trust banking and asset management which can benefit from closer integration of bank-securities. Management is concentrating on an increase in internal “chain” synergies and cross-selling as well as domestic and global integration initiatives (credit card, wealth management and wholesale opportunity via bank-securities, SMCC and Cedyna synergies, merger of SMBC Nikko and SMBC Friend).A biometric authentication platform was launched last year year. While WOW! is a branchless mass market banking service in Indonesia with 4 million customers, SMFG investment Bank Tabungan Pensiunan Nasional Tbk Pt (BTPN IJ) operates  a smart phone-based digital banking service (Jenius) which targets HNWs.Given that Loan demand is lacklustre and Lending Margins are thin at home, 30% of the loan portfolio now relates to international markets. Megabanks are extending their tentacles into an “Asia-centric” growth space.  SMFG has a stake in aforementioned  BTPN in Indonesia, Vietnam’s Eximbank and Cedyna, Cambodia’s Acleda, and Bank Of East Asia (23 HK). This looks like an entirely plausible growth-enhancing strategy.

Mitsubishi UFJ Financial (MUFG) (8306 JP)

Bank Tabungan Pensiunan Nasional (BTPN IJ)

SMFG: 花より団子 "Dumplings Rather than Flowers"