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>3QFY23 results reveal losses related to Aozora’s US CRE exposure and securities portfolio; management forecasts a FY23 loss and a 50% cut in the previously forecast FY2023 dividend</li>
<li>US CRE exposure is 6.6% of total loans and Aozora’s US CRE deterioration propelled the NPL ratio to 2.87% up 162bps QoQ, the worst NPL ratio of the peer group</li>
<li>The securities portfolio hits are in US MBS and US bond ETFs; SMFG and Mizuho have large relative FX bond exposures, but they have less duration risk</li>
</ul>


3QFY23 results reveal losses related to Aozora’s US CRE exposure and securities portfolio; management forecasts a FY23 loss and a 50% cut in the previously forecast FY2023 dividend
US CRE exposure is 6.6% of total loans and Aozora’s US CRE deterioration propelled the NPL ratio to 2.87% up 162bps QoQ, the worst NPL ratio of the peer group
The securities portfolio hits are in US MBS and US bond ETFs; SMFG and Mizuho have large relative FX bond exposures, but they have less duration risk


Aozora Bank (8304 JP) – Two Bets Too Far

Global Multi-Asset Investment Strategist, True Insights

Jeroen Blokland

Global Multi-Asset Investment Strategist

Build Well-Diversified Multi-Asset Portfolios

True Insights

Our research helps investors build well-diversified multi-asset portfolios and profit from market developments. In addition, our unique and proven Macro – Sentiment – Valuation (MSV) investment framework ensures a consistent flow of new investment opportunities. Together with our market views, these opportunities will be reflected in our live ETF-based Global Multi-Asset Portfolios.

Cross Asset Strategy

<ul>
<li>It seems another US regional bank is heading for the exit. Commercial Real Estate continues to haunt the banking industry. Is another banking crisis coming?</li>
<li>In January, the ISM Manufacturing Index defied gravity (and all regional PMI indices), erasing 10% of stock market downside. Yet, risks linger on the downside when it comes to the ISM.</li>
<li>The Bank of England was split on the decision to hold interest rates steady. But the writing is on the wall with the first rate cut proposal in four years!</li>
</ul>


It seems another US regional bank is heading for the exit. Commercial Real Estate continues to haunt the banking industry. Is another banking crisis coming?
In January, the ISM Manufacturing Index defied gravity (and all regional PMI indices), erasing 10% of stock market downside. Yet, risks linger on the downside when it comes to the ISM.
The Bank of England was split on the decision to hold interest rates steady. But the writing is on the wall with the first rate cut proposal in four years!


The Weekly Market Monitor – Another Banking Crisis? Not if Powell Has Anything to Say About It!

Oil and Gas, Mint Finance

Suhas Reddy

Oil and Gas

Deep Fundamental Analysis

Mint Finance

Mint Finance's investment research blends deep fundamental analysis with technical & quant insights. Investment strategies straddle across multiple asset classes with risk management embedded into every trade to deliver an outsized reward-to-risk ratio.

Mint Finance's research is centered around three key themes. First, energy transition and climate change. Second, artificial intelligence. Third, shifting world order with its impact across politics and monetary economics.

Thematic (Sector/Industry)

<ul>
<li>Regional and small US banks face a greater risk to rising delinquencies on CRE loans given their higher exposure to CRE debt.</li>
<li>CRE loan delinquency rates and net charge-offs have accelerated since Q32022, mostly driven by the office space portfolio.</li>
<li>Within the CRE industry, property types such as hotels, offices and retail assets have the highest average rate caps, respectively.</li>
</ul>


Regional and small US banks face a greater risk to rising delinquencies on CRE loans given their higher exposure to CRE debt.
CRE loan delinquency rates and net charge-offs have accelerated since Q32022, mostly driven by the office space portfolio.
Within the CRE industry, property types such as hotels, offices and retail assets have the highest average rate caps, respectively.


Crisis in US CRE to Disproportionately Impact Regional Banks

Product Marketing Manager, Criat

Raghav Chandra Mathur

Product Marketing Manager

Next-Generation Credit Analytics Provider

Criat

Criat specializes in new-generation data-driven credit analytics. Leveraging our industry-leading DeepCredit analytical technologies, we produce daily-updated forward-looking credit assessment and valuation to help financial institutions stay ahead of risks. Coupled with use-case-driven applications, we extract insights, answer questions and enable smarter credit decisions.

<ul>
<li>Since the start of 2023, the credit risk profiles of the US Banking sector have deteriorated substantially. The US Banking Criat Credit Cycle Index (CCCI) has risen from 2.9bps on January 1, 2023, to 6.7bps on December 1, 2023.</li>
<li>The peak distress felt by the sector this year was in the aftermath of the regional banking crisis in March and the US government debt crisis in May, which saw the sector’s credit risk worsen above its peak of 10bps this year.</li>
<li>Since then, the sector’s CCCI has remained relatively stable, albeit elevated. </li>
</ul>


Since the start of 2023, the credit risk profiles of the US Banking sector have deteriorated substantially. The US Banking Criat Credit Cycle Index (CCCI) has risen from 2.9bps on January 1, 2023, to 6.7bps on December 1, 2023.
The peak distress felt by the sector this year was in the aftermath of the regional banking crisis in March and the US government debt crisis in May, which saw the sector’s credit risk worsen above its peak of 10bps this year.
Since then, the sector’s CCCI has remained relatively stable, albeit elevated. 


Elevated US Banking Risk as Rate Hikes Bite Performance

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.

<p>Declining modified loans related to the crisis is a feature of many US banks. The rate of decline is especially dramatic in Texas. The comparison to banks in New York is striking, suggesting a far better outlook for banks in the Lone Star State.</p>

Declining modified loans related to the crisis is a feature of many US banks. The rate of decline is especially dramatic in Texas. The comparison to banks in New York is striking, suggesting a far better outlook for banks in the Lone Star State.

US Banks – Modified Loans Marginal, For Some

United States

New York Community Bancorp, Inc. is a multi-bank holding company. The Company, through its banking subsidiaries, offers a full range of traditional and non-traditional products and services, and originates multi-family, commercial real estate, and construction loans, primarily in the New York metropolitan area.

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New York Community Bank (NYCB US)

Aozora Bank (8304 JP) – Two Bets Too Far

Aozora Bank's losses from US CRE and securities point to a projected FY23 loss and a dividend cut, with it having the highest overseas loan share...

Victor Galliano

The Weekly Market Monitor – Another Banking Crisis? Not if Powell Has Anything to Say About It!

I explain why the odds of a systemic banking crisis are limited, yet not zero. But like the soft landing, the Federal Reserve will cut rates...

Jeroen Blokland

Crisis in US CRE to Disproportionately Impact Regional Banks

Regional banks' asset quality is under greater threat given their high exposure to CRE loans. Hotels, offices, and retail assets have the highest...

Mint Finance

Elevated US Banking Risk as Rate Hikes Bite Performance

Dec 5, 2023 Since the start of 2023, the credit risk profiles of the US Banking sector have deteriorated substantially. The US Banking Criat...

Criat

US Banks – Modified Loans Marginal, For Some

Declining modified loans is key in the US. The rate of decline is especially dramatic in TX, especially compared to banks in NY. Perhaps the...

Daniel Tabbush

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Aozora Bank (8304 JP) – Two Bets Too Far

​Aozora Bank's losses from US CRE and securities point to a projected FY23 loss and a dividend cut, with it having the highest overseas loan share...

Victor Galliano

The Weekly Market Monitor – Another Banking Crisis? Not if Powell Has Anything to Say About It!

I explain why the odds of a systemic banking crisis are limited, yet not zero. But like the soft landing, the Federal Reserve will cut rates...

Jeroen Blokland

Crisis in US CRE to Disproportionately Impact Regional Banks

Regional banks' asset quality is under greater threat given their high exposure to CRE loans. Hotels, offices, and retail assets have the highest...

Mint Finance

Elevated US Banking Risk as Rate Hikes Bite Performance

Dec 5, 2023 Since the start of 2023, the credit risk profiles of the US Banking sector have deteriorated substantially. The US Banking Criat...

Criat

US Banks – Modified Loans Marginal, For Some

Declining modified loans is key in the US. The rate of decline is especially dramatic in TX, especially compared to banks in NY. Perhaps the...

Daniel Tabbush

Aozora Bank's losses from US CRE and securities point to a projected FY23 loss and a dividend cut, with it having the highest overseas loan share...