Daily Brief Financials: Insignia Financial, Bank OZK, Bajaj Finance Ltd, Deutsche Beteiligungs AG and more

• After Tanarra Capital categorically refuted an Australian article alleging Tanarra was supportive of Bain’s Offer, Insignia Financial (IFL AU)‘s board’s response was all-but rubber stamped. 
• Insignia reckons Bain’s Offer does not represent fair value, and in the “context of a change of control transaction“. 
• What now – does Bain bump? Tough call in a space where one, possible two deals, may lapse in short succession. 

• Bank OZK (OZK US) has more CRE loans to total loans of any US bank at 72% in 3Q24
• Risks of CRE loans are real now and historically, they have high loss rates, in bad times
• The bank is seeing a surge in NPAs , but its credit costs are lagging – make up in 4Q24?

• Bajaj Finance Ltd (BAF IN) is transitioning into a “FINAI” company, integrating AI across all operations to drive transformative growth.
• This strategy will focus on acquiring the next 100 million customers, penetrating new growth frontiers like MSME lending, and bolstering risk management and operational efficiency. 
• The company’s success hinges on the successful execution of its FINAI strategy, navigating competition, managing credit costs, and adapting to the evolving regulatory landscape.

Deutsche Beteiligungs (DBAG) reported an 8.5% NAV total return (TR) in FY24 (to end-September 2024), supported by positive movements in valuation multiples, which offset the negative impact from changes in earnings and the higher net debt of portfolio companies. DBAG’s portfolio remains affected by the subdued macroeconomic environment in Germany, although its continued portfolio shift away from more traditional industrial holdings likely provided a cushion. Following the convertible bond and promissory loan note issues earlier this year, along with several successful exits, DBAG’s strong balance sheet positions the company well to explore the many attractively priced investment opportunities that management sees in the current market environment. DBAG’s shares now trade at a 38% discount to the last reported NAV of its private markets investments, on top of which DBAG’s shares offer exposure to the company’s fund services business. Therefore, we consider the discount wide even considering the market headwinds.