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Fundamental View
AS OF 29 Dec 2025Citigroup is a solid global money center bank that has done a decent job cleaning up legacy issues and fortifying the risk profile in the wake of the GFC, though it still lags peers on several fronts including profitability.
Citi has more geographic diversification than peers owing to its international presences, though the retail side is shrinking considerably as Citi exits most of Asia and Mexico, refocusing around a global wealth management/private bank strategy.
Citi lags on the domestic deposit front, with less than half of the deposit base of money center peers and a much smaller physical footprint, though it has been focused on driving deposit flows the past couple of years.
Business Description
AS OF 29 Dec 2025- Citigroup ranks as the 3rd largest U.S. bank by total assets ($2.64 tn) at 3Q25 and 3rd largest by Total Equity ($214 bn).
- Citi currently is the 4th in terms of U.S. deposits with approximately $795.4 bn as of 3Q25 across 668 branches (S&P Capital IQ). Given the significantly smaller branch footprint, Citi does not generally possess leading market shares in most states besides South Dakota (#1).
- Citi's major business lines include U.S. consumer (mortgages and credit cards) and retail banking, global consumer, global corporate & investment banking, and global payments. The company has a plan to exit 13 international consumer markets, refocusing the non-US footprint around four regional hubs and combining wealth management and the private bank to drive synergies out of the hubs.
Risk & Catalysts
AS OF 29 Dec 2025Citi still lags peers on profitability (both ROA and ROTCE); CEO Fraser adopted the profitability gap as a key focus point as well, and we see Fraser’s strategic moves (e.g. int’l consumer exits, headcount reduction in management layers) as aimed at capital and expense optimization to improve ROE with some progress showing up recently.
Citi has had some regulatory mishaps in recent years but has made progress towards resolving issues.
Citi’s global footprint makes it more exposed to emerging markets and non-domestic economies; in the near-term, that could create earnings and capital volatility, though tariff-related disruptions did not ultimately negatively impact Citi in 2025.
Key Metric
AS OF 29 Dec 2025| $ mn | FY21 | FY22 | FY23 | FY24 | LTM 3Q25 |
|---|---|---|---|---|---|
| ROAE (annual) | 10.9% | 7.5% | 4.5% | 6.1% | 7.0% |
| ROAA (annual) | 0.92% | 0.61% | 0.38% | 0.51% | 0.55% |
| PPNR / Avg. Assets | 1.02% | 0.97% | 3.93% | 3.56% | 4.38% |
| Efficiency Ratio | 68% | 67% | 272% | 283% | 259% |
| Net Interest Margin (Annual) | 1.94% | 2.20% | 2.37% | 2.29% | 2.34% |
| Net charge-offs (LTM) / Loans | 0.70% | 0.55% | 0.95% | 1.29% | 1.27% |
| Common Dividend Payout | 19% | 27% | 130% | 187% | 125% |
| CET1 Ratio | 12.3% | 13.0% | 13.4% | 13.6% | 13.3% |
| Supplementary Leverage Ratio (SLR) | 5.7% | 5.8% | 5.8% | 5.9% | 5.5% |
| Liquidity Coverage Ratio (LCR) | 115% | 118% | 116% | 117% | 115% |
CreditSight View Comment
AS OF 13 Jan 2026We are moving Citi to Market perform from Underperform, seeing decent spread value at the widest name among Big 6 GSIBs, particularly considering the context of improved profitability as well as progress on divesting itself of Banamex, the most significant step remaining in right-sizing its international exposure. We no longer see policy (i.e. tariffs) as a particular concern for Citi.
Recommendation Reviewed: January 13, 2026
Recommendation Changed: January 13, 2026
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Fundamental View
AS OF 29 Dec 2025JPMorgan is one of the strongest and best positioned banks to navigate the current environment, with a well-diversified business model and good competitive positioning across a variety of lending and capital markets areas.
The company continues to deploy its considerable earnings power into reinvestment, specifically around technology where we are bullish on its ability to drive competitive advantages through strategic enhancements and efficiency gains.
Business Description
AS OF 29 Dec 2025- JPMorgan ranks as the largest U.S. bank by total assets ($4.56 tn at 3Q25) and deposits ($2.55 tn at 3Q25).
- JPMorgan ranks 1st in terms of U.S. deposits with approximately $2.08 tn in deposits at YE24 across 4,970 branches (S&P Capital IQ). JPMorgan's footprint includes New York (#1), Texas (#1), California (#2), Illinois (#1), Michigan (#1), Arizona (#1), Ohio (#5), and Florida (#4), among others.
- JPMorgan's major business lines include investment banking, retail banking, card services, treasury & securities services, commercial banking, and asset & wealth management.
Risk & Catalysts
AS OF 29 Dec 2025Succession planning at JPMorgan has a higher profile than many peers, with CEO Dimon (68 year-old) having held the top spot for over 15 years. Another recent round of shuffling top management yielded a little clarity.
The sector is always exposed to reputational, legislative, administration, and economic risk factors. That said, JPM’s strong capital position and scale leaves it well positioned to adapt to evolving landscapes and macro conditions.
Although not likely a credit risk, JPMorgan may continue to be acquisitive around non-bank financial and ancillary services; but we would expect any deal to be conservatively funded and looking to further technology and fee income strategies (e.g. payments or asset management).
Key Metric
AS OF 29 Dec 2025| $ mn | FY21 | FY22 | FY23 | FY24 | 3Q25 |
|---|---|---|---|---|---|
| ROAE (annual) | 17.0% | 13.2% | 16.0% | 17.4% | 16.7% |
| ROAA (annual) | 1.3% | 1.0% | 1.3% | 1.4% | 1.3% |
| PPNR / Avg. Assets | 1.32% | 1.39% | 7.06% | 7.71% | 1.86% |
| Efficiency Ratio | 59% | 58% | 214% | 220% | 53% |
| Net Interest Margin (Annual) | 1.63% | 2.00% | 2.70% | 2.63% | 2.52% |
| Net charge-offs (LTM) / Loans | 0.26% | 0.25% | 0.48% | 0.63% | 0.68% |
| Common Dividend Payout | 24% | 32% | 101% | 97% | 27% |
| CET1 Ratio | 13.1% | 13.2% | 15.0% | 15.7% | 14.8% |
| Supplementary Leverage Ratio (SLR) | 5.4% | 5.6% | 6.1% | 6.1% | 5.8% |
| Liquidity Coverage Ratio (LCR) | 110% | 110% | 113% | 113% | 113% |
CreditSight View Comment
AS OF 14 Jan 2026We continue to view JPMorgan as the strongest and most defensive name among the Big 6 issuers, but at recent tight spread levels and considering sound fundamentals across the space, we see relatively better value at Bank of America currently. JPMorgan’s 4Q25 results showed continued solid trends, and guidance looks positive for 2026– net interest income is expected to see moderate growth and investment banking pipelines remain healthy. Profitability remains quite strong with core ROTCE around 20%, and excess capital remains robust.
Recommendation Reviewed: January 14, 2026
Recommendation Changed: January 13, 2026
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Search topics about wealth insights and investments.BMO Financial
- Sector: Financial Services
- Sub Sector: Consumer Finance and Banking
- Region: Canada
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Fundamental View
AS OF 22 Dec 2025BMO is geographically diversified within Canada & via its commercial banking business in the U.S. and is also well-diversified by revenue with contribution from fee income businesses.
Credit has performed worse than peers in 2024, but losses have stabilized in 2025, based on underwriting and risk management changes in recent years as well as seasoning effects.
Business Description
AS OF 22 Dec 2025- BMO Financial Group is the third largest depository institution in Canada with C$1.48 tn in assets as of F4Q25 and a market capitalization of C$88 bn as of December 22, 2025. Total deposits were C$948 bn at F4Q25.
- BMO operates 1,890 branches in Canada and the United States. In 2025, BMO had 1,007 branches within the United States, mostly in the Midwest. BMO ranked 11th in deposit market share in the U.S. (SNL), with a top-2 share in Illinois.
Risk & Catalysts
AS OF 22 Dec 2025BMO has a strong core deposit base in Canada and in the U.S., which mitigates the potential for a liquidity event. BMO remains well-capitalized relative to requirements with a target CET1 ratio of 12.5%.
Credit trends have largely stabilized in 2025 following a period of elevated provisions in 2024. BMO’s reserves and capital levels all point to BMO maintaining a conservative balance sheet stance and having flexibility to manage through a more extended period of macro weakness in Canada.
We view real estate-related risk in Canada as manageable for BMO given low LTV of exposures in vulnerable markets and conservative underwriting. Commercial real estate accounts for ~10% of total loans, and office is quite manageable at ~1% of total.
BMO closed the acquisition of Bank of the West from BNP Paribas in February 2023, significantly expanding its footprint in the U.S.
Key Metric
AS OF 22 Dec 2025| $ mn | FY21 | FY22 | FY23 | FY24 | LTM 4Q25 |
|---|---|---|---|---|---|
| Revenue | 25,788 | 34,394 | 29,260 | 32,796 | 36,277 |
| Net Income | 7,754 | 13,537 | 4,437 | 7,327 | 8,725 |
| ROAE | 1.01% | 1.01% | 1.01% | 1.01% | 1.01% |
| NIM | 1.59% | 1.59% | 1.59% | 1.59% | 1.59% |
| Net Charge-offs / Loans | 0.14% | 0.08% | 0.14% | 0.39% | 0.34% |
| Total Assets | 988,175 | 1,173,397 | 1,347,006 | 1,409,647 | 1,476,802 |
| Unsecured LT Funding | 51,915 | 64,886 | 63,418 | 115,839 | 76,889 |
| CET1 Ratio (Fully-Phased-In) | 13.7% | 16.7% | 12.5% | 13.6% | 13.3% |
CreditSight View Comment
AS OF 07 Jan 2026We maintain our Market perform for BMO, with our preference within the group remaining to trade up in quality to RBC and TD. Surprising deterioration in asset quality metrics was the story throughout the latter part of F2024 and early F2025, with provisions well above historical average levels. Management has attributed the weakness largely to large wholesale loans to new borrowers originated in 2021, but credit trends have since stabilized throughout the year with further room to improve in FY2026. On the efficiency front, BMO has outlined several cost reduction initiatives, which are expected to support expense management and efficiency improvement going forward.
Recommendation Reviewed: January 07, 2026
Recommendation Changed: August 26, 2020
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Search topics about wealth insights and investments.Meta Platforms
- Sector: TechnologyTechnology Media and Telecommunications
- Sub Sector: Technology
- Country: US
- Bond: META 4.95 33
- Indicative Yield-to-Maturity (YTM): 4.95%
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Fundamental View
AS OF 19 Dec 2025Meta delivered strong revenue growth in its 3Q25 results and 4Q25 guidance, which were both above consensus expectations. However, total expenses are now expected to grow “significantly” faster in 2026 relative to the 22-24% YoY implied growth in 2025. Also, capex will have “notably larger” dollar growth in 2026. We estimate this could imply $115-120 capex or ~50% of sales in 2026. As a result, we expect FCF to be pressured in 2026.
Meta just launched $30 bn IG bonds which is on the heels of the recent $27 bn off balance sheet Meta JV bond deal. Pro forma for $30 bn issuance, gross leverage is 0.5x (0.2x at 3Q25) and lease-adjusted leverage is 0.7x (0.4x at 3Q25). Net cash was $15.6 bn at 3Q25. Meta recently prevailed in the FTC’s monopoly litigation.
Business Description
AS OF 19 Dec 2025- Meta Platforms is the largest social networking company in the world. Meta's advertising revenue is primarily from Facebook and Instagram, although also on Messenger, Whatsapp, Threads, and third-party affiliated websites and apps.
- In 3Q25, Family of Apps was 99% of revenue (97.7% from advertising and 1.3% from other) and Reality Labs was 1% of revenue. Reality Labs generated $18.1 bn in operating losses during LTM 3Q25.
- There are 3.54 bn Family Daily Active People (DAP) as of 3Q25, and the Family Average Revenue per Person (ARPP) was $14.46 quarterly in 3Q25.
- Meta is headquartered in Menlo Park, California. Employee headcount was >78.4k at 3Q25.
Risk & Catalysts
AS OF 19 Dec 2025We continue to expect Meta to be a regular/annual issuer to fund its shareholder returns, operating losses in Reality Labs, and substantial investments in AI.
Meta recently prevailed in the FTC’s monopoly litigation. In December 2020, the FTC filed a lawsuit against Meta seeking to unwind prior acquisitions of Instagram and Whatsapp.
Meta’s business model relies almost entirely on user-generated content, exposing it to customer privacy concerns and regulatory scrutiny in the US and Europe.
Key Metric
AS OF 19 Dec 2025| $ mn | 2021 | 2022 | 2023 | 2024 | LTM 3Q25 |
|---|---|---|---|---|---|
| Revenue YoY % | 37.2% | (1.1%) | 15.7% | 21.9% | 21.3% |
| EBITDA | 63,882 | 49,622 | 71,955 | 101,568 | 118,359 |
| EBITDA Margin | 54.2% | 42.6% | 53.3% | 61.7% | 62.5% |
| CapEx % of Sales | 16.3% | 27.5% | 20.8% | 23.8% | 34.3% |
| Sh. Ret. % of CFO-CapEx | 116% | 152% | 46% | 68% | 74% |
| Net Debt | (47,998) | (30,815) | (47,018) | (48,989) | (15,614) |
| Gross Leverage | 0.0x | 0.2x | 0.3x | 0.3x | 0.2x |
| EV / EBITDA | 14.0x | 5.8x | 12.3x | 14.5x | 15.8x |
CreditSight View Comment
AS OF 18 Nov 2025Meta delivered strong revenue growth in its 3Q25 results and 4Q25 guidance, which were both above consensus expectations. However, total expenses are now expected to grow “significantly” faster in 2026 relative to the 22-24% YoY implied growth in 2025. Also, capex will have “notably larger” dollar growth in 2026. We estimate this could imply $115-120 capex or ~50% of sales in 2026. As a result, we think FCF could be slightly negative in 2026. Meta just launched $30 bn IG bonds which is on the heels of the recent $27 bn off balance sheet Meta JV bond deal. Pro forma for $30 bn issuance, gross leverage is 0.5x (0.2x at 3Q25) and lease-adjusted leverage is 0.7x (0.4x at 3Q25). Net cash was $15.6 bn at 3Q25. Meta recently prevailed in the FTC’s monopoly litigation.
Recommendation Reviewed: November 18, 2025
Recommendation Changed: July 31, 2025
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Search topics about wealth insights and investments.Amazon.com
- Sector: ConsumerTechnology Media and Telecommunications
- Sub Sector: Retail/GrocersTechnology
- Region: US
- Bond: AMZN 4.65 29
- Indicative Yield-to-Maturity (YTM): 3.99%
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Fundamental View
AS OF 19 Dec 2025We continue to have confidence in CEO Andy Jassy and the company’s long-term business for both AWS and Stores. AWS is a $132 bn run-rate business growing at 20% with GAAP operating margins in the 30s%. The 3Q25 results and commentary supports our view that Amazon will be a winner in Generative AI given the breadth of its cloud business, custom silicon (Trainium), and Bedrock service.
While AMZN’s capex has been ramping, along with other hyperscalers, we are encouraged by its debt reduction over the past few years and zero shareholder returns. There are risks related to its ongoing FTC suit although we view a breakup as unlikely. Pro forma for $15 bn issuance and $1.25 bn upcoming maturity, gross lease-adjusted leverage will increase by one tick to 1.0x.
Business Description
AS OF 19 Dec 2025- Amazon is an e-commerce company which sells a wide range of its own products and those of 3rd party sellers. Amazon offers fulfillment services for 3rd party sellers (FBA) and sells cloud computing services (AWS). In 3Q25, 3rd party units were 62% of total paid units, and FBA units are a majority of 3rd party units.
- In LTM 3Q25, NA segment was 60% of sales, International was 22% of sales, and AWS was 18% of sales.
- Amazon disclosed it surpassed 200 mn Prime members in April 2021. The annual membership was increased in February 2022 from $119 to $139 in the US, although fees vary by country. In mid-2019, Amazon Prime began to transition from 2-day to 1-day shipping. Amazon Prime also offers Prime Video, streaming music, and other benefits.
- In 2006, Amazon launched AWS which remains the leader in cloud computing (IaaS/PaaS). Amazon sells its own devices (e-reader, smart speaker, streaming media player, etc.).
Risk & Catalysts
AS OF 19 Dec 2025We think Amazon has moderate event risk given its large size (~$2.4 tn market cap).
Amazon’s capex has been ramping for AI cloud infrastructure, which could lead to more jumbo bond deals in 2026.
In September 2023, the FTC and a consortium of states filed a lawsuit against Amazon and accused the company of (1) punishing sellers for offering lower prices elsewhere and (2) making Prime eligibility conditional on usage of fulfillment services. Motions for summary judgment are not due until August 2026 with a trial scheduled for February 2027. The biggest risk would be a breakup, although we view that as unlikely.
Amazon’s $14 bn acquisition of Whole Foods has shown its proclivity for large M&A.
Key Metric
AS OF 19 Dec 2025| $ mn | 2020 | 2021 | 2022 | 2023 | 2024 | LTM 3Q25 |
|---|---|---|---|---|---|---|
| Revenue YoY % | 37.6% | 21.7% | 9.4% | 11.8% | 11.0% | 11.5% |
| EBITDA | 57,284 | 71,994 | 74,593 | 110,305 | 144,162 | 161,740 |
| EBITDA Margin | 14.8% | 15.3% | 14.5% | 19.2% | 22.6% | 23.4% |
| CapEx % of Sales | 12.1% | 13.3% | 11.5% | 8.5% | 12.3% | 17.1% |
| Sh. Ret. % of CFO-CapEx | 0% | 0% | n/m | 0% | 0% | 0% |
| Net Debt | (50,497) | (44,453) | 8,516 | (19,451) | (43,051) | (38,880) |
| Gross Leverage | 0.6x | 0.7x | 1.1x | 0.6x | 0.4x | 0.3x |
| EV / EBITDA | 28.3x | 23.3x | 11.7x | 14.4x | 16.1x | 14.5x |
CreditSight View Comment
AS OF 17 Nov 2025We continue to have confidence in CEO Andy Jassy and the long-term business for AWS and Stores. AWS is a $132 bn run-rate business growing at 20% with GAAP OM% in the 30s%. The 3Q25 results and commentary supports our view that Amazon will be a winner in Generative AI given the breadth of its cloud business, custom silicon (Trainium), and Bedrock service. While AMZN’s capex has been ramping, along with other hyperscalers, we are encouraged by its debt reduction over the past few years and zero shareholder returns. There are risks related to its ongoing FTC suit (not the one that was recently settled on Prime subscriptions) although we view a breakup as unlikely. Pro forma for $15 bn issuance and $1.25 bn upcoming maturity, gross lease-adjusted leverage will increase by one tick to 1.0x.
Recommendation Reviewed: November 17, 2025
Recommendation Changed: May 01, 2024
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Fundamental View
AS OF 19 Dec 2025Macquarie was tested during the global financial crisis, but managed to steer through the crisis without reporting losses. A strong balance sheet mitigated liquidity problems, but its banking unit had to turn to Australia’s central bank at that time for support.
The group has an impressive track record of managing risks and achieving good returns, and has built capabilities in a number of areas. Divestments are controlled based on market conditions. It was a beneficiary of market volatility in the commodity space in FY23-24. Its Australian mortgage book has also shown strong but sensible growth.
Business Description
AS OF 19 Dec 2025- Macquarie grew out of the Australian business of Hill Samuel, which commenced operations in 1969. Macquarie Group Ltd (MGL) is the holding company and listed entity, under which there is the banking group Macquarie Bank Ltd (MBL) which consists of the Banking & Financial Services (BFS) and Commodities & Global Markets (CGM) businesses, and a non-banking group which consists of the Macquarie Asset Management (MAM) and Macquarie Capital (MC) businesses.
- From the 1990s, the group has been associated with the "Macquarie Model" which focused on identifying cash-generating infrastructure assets & packaging them into funds that could be sold, with Macquarie taking fees as banker, arranger and asset manager.
- It acquired asset managers including Delaware Investments in the US and Blackmont Capital in Canada, boutique investment bank Fox-Pitt Kelton and specialists such as Tristone Energy (Canada). It acquired US asset manager, Waddell & Reed in April 2021, which added around US$76 bn of assets under management. It has recently sold its public AM business in the US and Europe to Nomura. Adjusting for the Nomura transaction, MAM has AUM of A$720 bn.
Risk & Catalysts
AS OF 19 Dec 2025Macquarie Group has sizable exposure to credit and equity risk, and so could be adversely impacted by falls in asset prices. In addition, volatile/weak markets could and has impeded its ability to exit some of its investments.
Its earnings profile partially depends on exits and therefore is lumpy in nature. It has till recently managed this risk well, but we are now cautious about its declining group capital surplus (it does not commit to a minimum level).
It is a global leader in infra investments and is well positioned for the green transition (though recently selling down these assets has proved difficult). It has been a strong beneficiary of volatility in commodity markets, a testament to its risk management capabilities.
Its banking unit was subject to enforcement action in Apr-21 by APRA over the incorrect treatment of intra-group funding arrangements resulting in an A$500 mn operational risk overlay as well as LCR and NSFR add-ons. The CGM unit also saw higher regulatory remediation-related spend more recently.
Key Metric
AS OF 19 Dec 2025| AUD mn | FY23 | FY24 | FY25 | 1H26 |
|---|---|---|---|---|
| Operating Income | 19,576 | 17,071 | 17,569 | 8,720 |
| Cost/Income | 62.0% | 71.4% | 70.5% | 71.8% |
| Net Profit | 5,182 | 3,522 | 3,715 | 1,655 |
| Return on Equity | 16.9% | 10.8% | 11.2% | 9.6% |
| Total Impairments/Op Profit | 6.1% | (7.4%) | 6.6% | 1.2% |
| Annuity Business Profit Contribution | 34.2% | 36.5% | 43.6% | 51.9% |
| MBL CET1 Ratio (APRA) | 13.7% | 13.6% | 12.8% | 12.4% |
| MBL Liquidity Coverage Ratio | 214% | 191% | 175% | 173% |
| MBL Net Stable Funding Ratio | 124% | 115% | 113% | 113% |
CreditSight View Comment
AS OF 07 Nov 2025Macquarie has a strong record of profitability since its inception. Its AM business focused on infrastructure, including green assets, is a global leader. It manages risks and returns effectively, and in FY22+23 was a large beneficiary of O&G and power price volatility. The Aus banking business has steadily gained mortgage marketshare. Large investment disposals from AM and Macquarie Capital led to a record year in FY22; strong commodities outperformance led to another record in FY23. FY24 income was affected by asset realisations and gas & power income. FY25 was helped by asset sales, 1H26 was just 3% up YoY. The group capital surplus is falling but is comfortable at the bank level. ALM is conservative. Senior spreads at both bank and group are tight. Fines from ASIC are imminent.
Recommendation Reviewed: November 07, 2025
Recommendation Changed: August 04, 2025
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Search topics about wealth insights and investments.Perusahaan Listrik Negara
- Sector: Energy
- Sub Sector: Independent Power Producers
- Region: Indonesia
- Bond: PLNIJ 4.125 27
- Indicative Yield-to-Maturity (YTM): 4.28%
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Fundamental View
AS OF 17 Dec 2025- PLN enjoys extremely strong ties with the Government of Indonesia (GoI) given its critical policy role of electrifying the nation. Post the launch of Indonesia’s sovereign wealth fund Danantara, PLN is now indirectly owned by the GoI through Danantara.
- PLN delivered a robust set of 1H25 results, with total revenue and EBITDA up 5% and 9% YoY respectively driven by resilient power demand across Indonesia
- Looking ahead, we expect PLN’s credit metrics to improve in FY25 supported by higher YoY EBITDA, though partially weighed upon by higher capex; we anticipate FY25 EBITDA growth to be in the mid to high single-digit % YoY, mainly attributable to Indonesia’s healthy economic growth, supporting power demand; we also expect power tariffs to remain flat.
Business Description
AS OF 17 Dec 2025- PLN is involved in the entire electricity value-chain, from power generation, to transmission, distribution and retail.
- It alone accounts for 76% (~47 GW) of Indonesia's generation capacity (of which 8 GW is renewable capacity), while IPPs provide the remainder.
- The company controls and operates the entire transmission and distribution network in the country. It is the sole buyer of electricity produced by IPPs, through power purchase agreements (PPAs).
- It sells electricity to well-diversified off-takers – 41% to households, 25% to industrial customers, 21% to businesses and 12% to others.
- Since 2015, the GoI has gradually implemented monthly tariff adjustments for 13 customer groups, so that rates charged to customers are better matched with production costs.
- However, under the Public Service Obligation (PSO), the company will continue to sell electricity at subsidized rates of 50% to 450-volt amperes (VA) power households and 25% to 900 VA power households. The GoI subsequently reimburses the company for the difference between the subsidized tariff rate and production cost, typically within 2-3 months.
Risk & Catalysts
AS OF 17 Dec 2025- The company provides subsidized electricity to certain households for which it subsequently receives reimbursements from the GoI; though these payments tend to get delayed during major events such as COVID-19 pandemic.
- In order to increase the country’s electrification ratio to 97%, the company had been mandated by the GoI to develop large electricity capacities through the Fast Track II and 35,000 MW Programs. Implementation of such complex programs has required significant capital expenditure, which has led PLN’s FCF to fall deep into the red in recent years and created a funding gap.
- The success of the above programs is also contingent on the company’s ability to source coal cheaply, select quality contractors, acquire land rights and receive adequate subsidy reimbursements from the GoI.
- Being primarily a thermal power producer, PLN may be viewed unfavourably from an ESG perspective.
Key Metric
AS OF 17 Dec 2025| IDR bn | FY22 | FY23 | FY24 | 1H24 | 1H25 |
|---|---|---|---|---|---|
| Debt to Book Cap | 28.9% | 27.8% | 27.3% | 27.5% | 27.2% |
| Net Debt to Book Cap | 25.2% | 23.7% | 23.0% | 25.4% | 23.9% |
| Debt/Total Equity | 40.7% | 38.5% | 37.5% | 38.0% | 37.3% |
| Debt/Total Assets | 24.6% | 23.4% | 22.5% | 22.9% | 22.1% |
| Gross Leverage | 4.1x | 4.1x | 3.6x | 4.1x | 3.4x |
| Net Leverage | 3.5x | 3.5x | 3.0x | 3.8x | 3.0x |
| Interest Coverage | 4.5x | 3.7x | 3.9x | 3.4x | 3.9x |
| EBITDA Margin | 31.2% | 27.6% | 30.4% | 29.8% | 30.9% |
CreditSight View Comment
AS OF 17 Dec 2025We have a M/P on PLN and prefer its 2042-2050s. While we think PLN’s shorter-dated is trading slightly tighter than our FV, we do not think the widening potential of its shorter dated is sufficient to warrant an U/P. Overall, we remain comfortable with PLN’s resilient credit profile supported by healthy domestic power demand, good insulation from input cost volatility and strong state-ownership. While there were concerns of the GoI demonopolizing the power sector, we think PLN’s monopoly is likely to stay after President Prabowo reportedly abandoned plans to allow customers to purchase clean electricity directly from renewable energy developers. That said, we think PLN continue to face higher coal-related ESG risk and elevated capex plans that could weigh on its credit metrics.
Recommendation Reviewed: December 17, 2025
Recommendation Changed: December 06, 2024
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Fundamental View
AS OF 11 Dec 2025SBUX operates and licenses Starbucks cafe locations. The company is current midway through a restaurant revamp aimed at boosting traffic following weak results in 2024. The program aims at improving the in-store coffee shop experience by investing in labor and reducing the prioritization of takeaway.
The turnaround program has a large labor investment component that is weighing on margins. The company has a strong cash flow cushion and management has committed to high-BBB ratings, but leverage has crept to levels above the ratings range.
A JV deal with Boyu Capital, a Chinese private equity firm, is aimed to turn operations around in a struggling Chinese market, by both improving in-store experience and local relevance, and by expanding locations.
Business Description
AS OF 11 Dec 2025- SBUX is a leading coffee roaster and retailer. The company operates and licenses over 40,000 Starbucks locations worldwide where it sells premium coffee beverages as well as other specialty drinks and prepared foods. Slightly over half the locations are company operated (52%) and the rest are licensed to third party operators.
- In F2025, SBUX generated $37.2 bn in revenue and $5.5 bn in adjusted EBITDA. SBUX has three reporting segments: N. America (74% of F2024 revenue), which covers cafes in the U.S. and Canada; International (21%), which includes China, Japan, Latin America, and EMEA; and Channel Development (5.0%) which includes revenue from other branded products sold outside retail locations through partnerships with large consumer companies such as Nestle and PepsiCo.
- On a geographic basis, SBUX's two largest regions are the U.S. (47% of cafes), and China (37%).
Risk & Catalysts
AS OF 11 Dec 2025SBUX entered an agreement to form a JV with Boyu Capital to operate the company’s retail coffee business in China. The deal is expected to finalize in F2Q26, and the company did not explicitly state where proceeds would be allocated.
In response to the activist attacks, SBUX announced an unexpected change in CEO and hired Brian Niccol, a veteran of the quick service restaurant industry with a successful track record at Taco Bell and Chipotle.
Lower discretionary spending in the U.S. could continue to weigh on SBUX’s sales outlook. We view its premium-priced beverage offerings as having significant risk of consumer trade down into more value-oriented options.
Investments behind the company’s new store imaging have increased costs and weighed on margins, in large part due to significant investments in labor.
Key Metric
AS OF 11 Dec 2025| $ mn | Y21 | Y22 | Y23 | Y24 | LTM 4Q25 |
|---|---|---|---|---|---|
| Revenue | 29,061 | 32,250 | 35,976 | 36,176 | 37,184 |
| EBITDA | 6,775 | 6,385 | 7,252 | 7,001 | 5,463 |
| EBITDA Margin | 23.3% | 19.8% | 20.2% | 19.4% | 14.7% |
| EBITDA-Capex to Revenue | 18.3% | 14.1% | 13.7% | 11.7% | 8.5% |
| Total Debt | 14,616 | 15,044 | 15,400 | 15,568 | 16,075 |
| Net Debt | 8,160 | 12,226 | 11,848 | 12,282 | 12,855 |
| Net Leverage | 1.2x | 1.9x | 1.6x | 1.8x | 2.4x |
| Lease Adjusted Debt to EBITDAR | 2.9x | 3.1x | 2.8x | 3.0x | 3.7x |
| EV / EBITDA | 20.4x | 17.1x | 16.1x | 17.6x | 20.0x |
CreditSight View Comment
AS OF 09 Jan 2026SBUX is in the early phases of an operational turnaround plan intent on reigniting foot traffic by improving the in-store experience. The “Back to Starbucks” program has come at the expense of margin due to heavy investments in labor. While the plan is ultimately to increase transactions and tickets due to improved experiences, we are skeptical that the company will be able to recoup the margin. Also, the strategy comes at a time when economic uncertainty could weigh on discretionary purchases. Management has committed to high-BBB ratings, but the margin compression is driving leverage creep. We recommend a wait and see approach to the name and favor McDonald’s bonds in the meanwhile.
Recommendation Reviewed: January 09, 2026
Recommendation Changed: May 01, 2024
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Fundamental View
AS OF 09 Dec 2025Petron’s delivered a robust set of result in 9M25; we expect Petron’s credit metrics to improve YoY, driven by improvement in its EBITDA and lower debt. We expect FY25 EBITDA to improve YoY owing to double-digit YoY-decline in crude oil input costs in FY25, though partially offset by a single-digit YoY decline in sales volume.
About two-third of its total revenues are derived from the Philippines and are indexed to Dubai crude prices, which allows for smooth cost pass-throughs and good insulation from crude price volatility.
Free cash flows are typically negative due to inventory fluctuations that outweigh low capex.
Business Description
AS OF 09 Dec 2025- Petron is the largest oil refining and retailing company in the Philippines, and the third largest player in Malaysia. It maintains a 24% market share in the Philippines (followed by Shell and Caltex) and a 20% market share in Malaysia (largest being Petronas), based on total fuel sales volumes.
- Petron has a total refining capacity of 268k barrels/day (bpd) and accounts for about 30% of the Philippines' fuel needs. Its petroleum refining facilities include the Limay Refinery in Bataan, Philippines (capacity of 180k bpd; 67% of total) and the Port Dickson Refinery in Negeri Sembilan, Malaysia (capacity of 88k bpd; remaining 33% of total).
- Petron's refineries process crude oil into a full range of petroleum products including gasoline, diesel, LPG, jet fuel, kerosene and petrochemicals.
- It further markets and retails these fuel products through its fuel service stations located across the Philippines (~1,800 outlets) and Malaysia (>800 outlets).
- Petron sources its crude oil supplies from third-party suppliers, namely Saudi Aramco, Kuwait Petroleum Corporation and Exxon Mobil, which are bought on the basis of term contracts and in the spot market.
- Petron mainly supplies its petroleum and fuel products to customers in Malaysia and the Philippines (~95% of annual revenue).
- Petron is 68% owned by San Miguel Corporation (SMC), one of the largest and most diversified conglomerates in the Philippines based on total revenues and assets. SMC's CEO, Mr. Ramon Ang, is also Petron's CEO.
Risk & Catalysts
AS OF 09 Dec 2025Petron cannot fully pass on higher crude oil input costs to customers in Malaysia.
Petron operates in low-margin business (EBITDA margins ~5%) and maintains elevated credit metrics.
Petron is highly dependent on its Limay petroleum refining complex that makes up two-thirds of its total refining capacity (67%). Any events that disrupt the refinery’s operations could adversely affect Petron’s total revenues.
Key Metric
AS OF 09 Dec 2025| PHP bn | FY22 | FY23 | FY24 | 3Q24 | 3Q25 |
|---|---|---|---|---|---|
| Debt to Book Cap | 74.0% | 75.1% | 74.5% | 70.8% | 71.0% |
| Net Debt to Book Cap | 65.5% | 68.2% | 67.1% | 59.7% | 60.7% |
| Debt/Total Equity | 284.2% | 301.4% | 292.0% | 242.0% | 245.0% |
| Debt/Total Assets | 70.2% | 67.6% | 64.9% | 63.6% | 61.9% |
| Gross Leverage | 10.9x | 7.1x | 7.4x | 7.9x | 6.0x |
| Net Leverage | 9.7x | 6.4x | 6.7x | 6.7x | 5.1x |
| Interest Coverage | 2.2x | 2.2x | 1.9x | 1.8x | 2.4x |
| EBITDA Margin | 3.4% | 5.3% | 4.7% | 3.8% | 7.1% |
CreditSight View Comment
AS OF 09 Dec 2025We move Petron to Market perform from Outperform, as we think the $475 mn 7.35% c.Sep-2028 perp has tightened to where we see fair value. That said, we continue to like Petron’s c.2028 for its relatively high coupon and hence high carry. Overall, we think Petron is a stable credit with an improving credit outlook. We like its full cost passthroughs for its operations in retail O&G in the Philippines, low capex, consistently improving net leverage metric (LTM 1H25: 6x), manageable debt maturity profile, proven willingness/ability to call back its perps by their first call date, strong parental support from the domestically well-reputed San Miguel Group and a 3-year tenor to first call that limits duration risk.
Recommendation Reviewed: December 09, 2025
Recommendation Changed: October 02, 2025
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Search topics about wealth insights and investments.Siam Commercial Bank
- Sector: Financial Services
- Sub Sector: Banks
- Country: Thailand
- Region: Thailand
- Bond: SCBTB 3.9 24
- Indicative Yield-to-Maturity (YTM): 5.573% (Indicative as of March 2)
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Fundamental View
AS OF 05 Dec 2025Siam Commercial Bank (SCBTB) has been a sound and profitable bank. It has a focus on the retail segment and targets to increase margins by growing its non-traditional banking businesses. It announced a major business overhaul in September 2021 to establish a new parent company called SCB X to segregate the group’s core banking services (Gen 1) from its new fintech and digital businesses and to enable greater flexibility and independence.
Recent credit costs however have been elevated due to the riskier exposure that these entail. However, profitability remains healthy and the capital buffer is strong at both the Holdco (SCB X) and Bank (SCB) level.
Business Description
AS OF 05 Dec 2025- Siam Commercial Bank was founded as the "Book Club" in 1904. In 1907, it started operating as a commercial bank and was renamed as "The Siam Commercial Bank". It completed its IPO on the Stock Exchange of Thailand in 1976.
- The bank is 23.58% owned by the King of Thailand, and a further 23.32% is owned by the Vayupak Fund 1, which is controlled by the government.
- SCB is the fourth largest Thai bank by assets and is known for its robust retail franchise.
- Its loan profile was 36% corporate, 16% SME, and 48% retail as of September 2025.
Risk & Catalysts
AS OF 05 Dec 2025We see a significant impact to the Thai economy from potential US tariffs, with ripple effects in the form of lower bank NIMs and higher credit costs than earlier guided for this year. Moody’s and Fitch have also downgraded their rating outlook on the Thailand sovereign (and consequently the Thai banks including KTB at Moody’s, which it currently rates in line with the sovereign) to negative in April and September 2025 respectively on increased risks to Thailand’s economic and fiscal strength.
The group’s business overhaul and strategic focus on retail comes with higher credit costs, particularly from the riskier target segments at the Gen 2/3 businesses. We expect a similar range for 2026 given challenges to the Thai economy including US tariffs, but SCB X’s higher NIM and low-40%s cost-income ratio provide comfortable room for that to be absorbed. We also take comfort in the ringfencing of the bank unit (SCB) from the Group’s riskier business units, and management’s minimum CET1 ratio of 16% at SCB.
Loan growth is likely to remain modest given a soft growth outlook for Thailand.
Key Metric
AS OF 05 Dec 2025| THB mn | FY21 | FY22 | FY23 | FY24 | 9M25 |
|---|---|---|---|---|---|
| PPP ROA | 2.63% | 2.50% | 2.88% | 2.87% | 2.97% |
| ROA | 1.1% | 1.1% | 1.3% | 1.3% | 1.4% |
| ROE | 8.4% | 8.3% | 9.3% | 9.1% | 10.2% |
| Equity/Assets | 13.4% | 13.5% | 14.1% | 14.2% | 13.9% |
| CET1 Ratio | 17.6% | 17.7% | 17.6% | 17.7% | 17.7% |
| Reported NPL ratio | 3.79% | 3.34% | 3.44% | 3.37% | 3.30% |
| Provisions/Loans | 1.84% | 1.45% | 1.82% | 1.76% | 1.71% |
| Gross LDR | 93% | 93% | 99% | 97% | 94% |
| Liquidity Coverage Ratio | 202% | 216% | 217% | 212% | n/m |
CreditSight View Comment
AS OF 23 Oct 2025SCB is the 4th largest bank in Thailand and has a leading retail franchise. Asset quality during COVID was poor. It created a new HoldCo structure (SCBX) in 2022 to shift digital units and unsecured retail loans outside the bank, and pledged a >16% CET1 ratio at SCB. The BOT has also ringfenced SCB which further reduces the risk for the SCBTB bonds. The NIM has been strong vs. peers as expected. We expect there to still be a sizable restructured book at SCB, and higher retail exposure amid elevated household debt has resulted in credit costs staying high, but these have been comfortably absorbed. We also see a meaningful impact to the Thai economy from US tariffs, with ripple effects in the form of lower bank NIMs and continued high credit costs. We have an Underperform rec.
Recommendation Reviewed: October 23, 2025
Recommendation Changed: April 22, 2025
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