Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

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.

Equity Bottom-Up

<ul>
<li>Credit quality risks are rising in US commercial real estate (CRE) and specifically in office property; furthermore, the prospect of increasing US Treasury bond issuance may heighten T-bond volatility</li>
<li>We screen for US banks that have strong capital ratios, that can deliver premium returns and can confront the rising credit quality challenges, especially in CRE</li>
<li>We maintain buys on M&amp;T Bank and Western Alliance, adding Capital One with its healthy capital ratios and low office exposure; we recommend profit taking on First Horizon</li>
</ul>


Credit quality risks are rising in US commercial real estate (CRE) and specifically in office property; furthermore, the prospect of increasing US Treasury bond issuance may heighten T-bond volatility
We screen for US banks that have strong capital ratios, that can deliver premium returns and can confront the rising credit quality challenges, especially in CRE
We maintain buys on M&amp;T Bank and Western Alliance, adding Capital One with its healthy capital ratios and low office exposure; we recommend profit taking on First Horizon


US Banks – A Closer Look at Office Exposure and Revisiting Capital Adequacy

<ul>
<li>US banks tightening standards for loans, as well as the downturn in loan demand, provides a silver lining for banks by reducing funding pressures as well as the increasing spreads</li>
<li>Among the regional banks, Western Alliance is seeing deposit inflows in 2Q23; more generally, the usage of the Fed’s BTFP and issuance by the FHLB seem well controlled</li>
<li>We stick with our picks M&amp;T Bank and Western Alliance, adding First Horizon to the buy list, where valuations stand out along with solid capital ratios and above average returns</li>
</ul>


US banks tightening standards for loans, as well as the downturn in loan demand, provides a silver lining for banks by reducing funding pressures as well as the increasing spreads
Among the regional banks, Western Alliance is seeing deposit inflows in 2Q23; more generally, the usage of the Fed’s BTFP and issuance by the FHLB seem well controlled
We stick with our picks M&amp;T Bank and Western Alliance, adding First Horizon to the buy list, where valuations stand out along with solid capital ratios and above average returns


US Regional Banks – Credit Spread Silver Linings to Mitigate Loan Quality and Volume Headwinds

Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

Thematic (Sector/Industry)

The main lever for US banks and others is credit costs. This is clear in data during the three quarters thus far this year. After the closing of economies credit costs soared and with the re-opening they have collapsed. But operationally US banks can also benefit from the steepening yield curve. The spread of 10-year US Treasuries over 1-year paper continues to expand. With vaccines, the Biden win and a better understanding of the cost-benefit on how governments reacted early this year, there is likely more risk of the yield curve remaining steep.

The main lever for US banks and others is credit costs. This is clear in data during the three quarters thus far this year. After the closing of economies credit costs soared and with the re-opening they have collapsed. But operationally US banks can also benefit from the steepening yield curve. The spread of 10-year US Treasuries over 1-year paper continues to expand. With vaccines, the Biden win and a better understanding of the cost-benefit on how governments reacted early this year, there is likely more risk of the yield curve remaining steep.

The key for US banks in upcoming results will be the effect of lower corporate taxes on the carrying value of deferred tax assets (DTA). While not a major issue for most banks and especially money center banks, impairments will be meaningful for some. HSBC Finance also stands out here – although technically not a bank - where its DTA are exceptionally high compared with its stated net worth and more so than most all banks in the US.Operationally, what most will be looking for are improvements in…

The key for US banks in upcoming results will be the effect of lower corporate taxes on the carrying value of deferred tax assets (DTA). While not a major issue for most banks and especially money center banks, impairments will be meaningful for some. HSBC Finance also stands out here – although technically not a bank - where its DTA are exceptionally high compared with its stated net worth and more so than most all banks in the US.Operationally, what most will be looking for are improvements in…

US Banks – What to Look for in 4Q17 Results

United States

First Horizon National Corporation, through its subsidiaries, provides a range of financial services. The Company offers a variety of commercial banking services and also conducts mortgage banking, capital markets, and transaction processing.

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First Horizon National (FHN US)

US Banks – A Closer Look at Office Exposure and Revisiting Capital Adequacy

We screen US banks for strong core capital ratios, premium returns and for CRE and office exposure; we keep buys on M&T Bank and Western Alliance,...

Victor Galliano

US Regional Banks – Credit Spread Silver Linings to Mitigate Loan Quality and Volume Headwinds

For US banks lower funding pressures and increasing spreads provide a silver lining against credit quality and lower volume headwinds; we like M&T...

Victor Galliano

US Banks – Borrow Short, Lend Long

While credit costs will remain a key focus for US banks over the coming quarters, we must not lose sight of the steepening yield curve and what it...

Daniel Tabbush

US Banks – What to Look for in 4Q17 Results

The key for US banks in upcoming results will be the effect of lower corporate taxes on the carrying value of deferred tax assets (DTA). While not...

Daniel Tabbush

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