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Delta Air Lines
- Sector: Transportation
- Sub Sector: Airlines
- Country: US
- Bond: DAL 5.25 30
- Indicative Yield-to-Maturity (YTM): 4.50%
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Fundamental View
AS OF 15 Jan 2026Delta’s focus on premium cabin and atlantic flying driven by its loyalty program lead the airline to enjoy industry best profitability. Delta targets 1x gross leverage, an A level balance sheet in our view.
Our Outperform had been predicated on an eventual move to A-category ratings for the Delta credit- we still think that can happen down the line. With the DAL 5.25% 7/2030 trading at +80, we are removing O/P call and moving to Market Perform while we wait out the credit card noise.
Business Description
AS OF 15 Jan 2026- DAL is one of the world's largest airlines with a network comparable to UAL and AAL in size and distribution. It is perceived by the flying public as the "most premium" of the Big Three network carriers in the US.
- DAL has an extensive global network of airline affiliations, including Air France/KLM, Virgin Atlantic, Aeromexico, LATAM, and China Eastern.
- DAL management is the most evolved of the US network airlines, previously focused on used aircraft to lower capital costs and setting up full-cycle maintenance programs, buying a refinery to hedge crack spread, and developing non-commodity products including the leading loyalty program.
Risk & Catalysts
AS OF 15 Jan 2026DAL faces all the industry exogenous risks: geopolitical events, pandemics, oil price volatility, and recessionary fears.
The recently weaker dollar may manifest as a headwind to international demand. DAL was able to capitalize on strong Atlantic recovery post-pandemic through its extensive existing network; however, it lost its status as the number one airline on US-Europe routes to United which grew very fast in the segment and now occupies the first spot.
DAL’s 1x leverage target is the lowest target in the industry.
Higher income households are still outspending the middle and lower income ones, propelling Delta’s business even higher.
Capping credit card rates (as well as interchange reform) could be a significant headwind to loyalty programs, where Delta is strongest.
Key Metric
AS OF 15 Jan 2026| $ mn | Y23 | Y24 | Y25 | LTM 4Q25 |
|---|---|---|---|---|
| Revenue | 58,048 | 61,642 | 63,364 | 63,364 |
| EBIT | 5,521 | 5,995 | 5,822 | 5,822 |
| EBITDAR | 8,843 | 9,482 | 9,239 | 9,239 |
| Cash | 2,741 | 3,069 | 4,310 | 4,310 |
| Short Term Investments | 10,061 | 721 | 0 | 0 |
| Net Debt | 16,269 | 13,151 | 9,796 | 9,796 |
| Adjusted Debt/LTM EBITDAR | 3.3x | 2.6x | 2.4x | 2.4x |
CreditSight View Comment
AS OF 22 Jan 2026For 2026, Delta’s guide was slightly below the Street but still reflects earnings growth in excess of 20% for the year on 3% capacity growth. Leverage is expected to end the year at a solid 2x (vs. a 1x long-term target), and debt reduction remains a priority. However, if the year goes well, management indicated shareholder returns could resume this year. The potential for credit card reform is looming. Talks of 10% APR caps as well as interchange reform are troubling for a premium/loyalty-heavy airline like DAL. Our Outperform had been predicated on an eventual move to A-category ratings for the Delta credit- we still think that can happen down the line. With the DAL 5.25% 7/2030 trading at +80, we are removing O/P call and moving to MP while we wait out the credit card noise.
Recommendation Reviewed: January 22, 2026
Recommendation Changed: January 14, 2026
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Search topics about wealth insights and investments.SMC Global Power
- Sector: Energy
- Sub Sector: Independent Power Producers
- Country: Philippines
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Fundamental View
AS OF 14 Jan 2026We see lower non-call risk for SMC GP’s c.2026 perps owing to strong near-term parental funding support, its recent c.2024 and c.2025 perp refinancing, and recent bond exchange/tender with a new $900 mn c.2029 perp issuance.
We see an improving credit outlook for SMC GP aided by lower thermal coal input costs, new contracts, and capacity additions. Net cash inflows of $2.1-$2.2 bn from the completion of an LNG deal is also positive.
While SMC GP improved its cost passthrough contractual mix from end-FY23 onwards, the company still remains exposed to high thermal coal input costs (~40-50% of contracts).
SMC GP incurs sizable capex that has led to additional debt incurrence and elevated credit metrics.
Business Description
AS OF 14 Jan 2026- SMC GP is a leading power generation and distribution company in the Philippines. Its total generation capacity stands at 4.7 GW, accounting for ~20% of the national grid.
- The bulk of its revenues is derived from power generation (~82%), with the remainder from electricity distribution and retailing (~18%).
- It operates 7 power generating plants across diversified energy sources, comprising coal (~62%), natural gas (~25%), hydro (~12%) and battery energy storage (~1%).
- Through long-term power supply agreements and retail supply contracts, SMC GP either sells electricity directly to customers (including large Philippines power distribution company Manila Electric Company, distribution utilities and other industrial customers), or through the Philippine Wholesale Electricity Spot Market.
- SMC GP acts as the Independent Power Producer Administrator (IPPA) for three power plants (~54% of total capacity), where it has the right to sell electricity generated by the IPPs without having to bear large upfront capital expenditures for plant construction and maintenance.
- SMC GP also distributes and retails electricity services through its wholly-owned subsidiary Albay Power and Energy, which distributes power in the province of Albay, Luzon.
- SMC GP is a wholly-owned unlisted subsidiary of San Miguel Corporation, one of the largest and most diversified conglomerates in the Philippines based on total revenues and assets.
Risk & Catalysts
AS OF 14 Jan 2026SMC GP still has $984 mn of c.2026 perps outstanding to be addressed, though we see low non-call risks.
A moderate portion of SMC GP’s off-take contracts do not contain cost pass-through mechanisms. This exposes the company to a rise in thermal coal input costs that could squeeze its EBITDA margins.
SMC GP incurs sizable capex that has spurred additional debt incurrence. Consequently, its credit metrics remain elevated.
Over 80% of SMC GP’s installed capacity is thermal coal or gas-fired, which may be viewed unfavorably from an ESG perspective.
Key Metric
AS OF 14 Jan 2026| PHP bn | FY22 | FY23 | FY24 | 3Q24 | 3Q25 |
|---|---|---|---|---|---|
| Debt to Book Cap | 69.2% | 62.8% | 64.4% | 62.4% | 58.3% |
| Net Debt to Book Cap | 66.4% | 59.4% | 57.7% | 58.8% | 48.1% |
| Debt/Total Equity | 224.6% | 168.7% | 181.2% | 165.6% | 139.8% |
| Debt/Total Assets | 79.0% | 73.8% | 73.8% | 71.3% | 67.2% |
| Gross Leverage | 19.4x | 12.9x | 11.9x | 10.4x | 10.4x |
| Net Leverage | 18.6x | 12.2x | 10.7x | 9.8x | 8.6x |
| Interest Coverage | 1.4x | 2.2x | 2.3x | 2.5x | 2.1x |
| EBITDA Margin | 13.2% | 26.4% | 26.6% | 25.7% | 43.5% |
CreditSight View Comment
AS OF 10 Mar 2026We downgrade SMC GP to Market perform from Outperform. We think SMC GP’s perps trade wide to S&SEA B-rated corporates including Vedanta and Indika. We are comfortable with SMC GP’s improving credit outlook, completion of the $3.3 bn LNG deal, strong parental support, and management’s willingness and ability to repay the perps. That said, key risks include any weakening of parental funding support (due to SMC’s own sizable infra capex), overly aggressive capex, and exposure to higher thermal coal prices brought about by the Mideast conflict. SMC GP has refinanced its recent perps in a timely manner, but past refinancing efforts have cut close to the edge, which could evidently weigh on investor confidence during risk-off conditions.
Recommendation Reviewed: March 10, 2026
Recommendation Changed: March 10, 2026
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Country Overview
AS OF 13 Jan 2026- Indonesia is the world’s fourth-most populous nation and the largest economy in Southeast Asia
- The economy is diverse, with key sectors including manufacturing, agriculture, mining, and services.
- Indonesia is a significant producer of commodities like coal, palm oil, and natural gas.
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Fundamental View
AS OF 05 Jan 2026BNP’s financial strength is based on its strong franchises across retail, commercial and investment banking, and its wide business and geographic diversification. Profitability is sound and improving, while asset quality has held up well.
Uncertainty around the financial health of the French sovereign and its ratings have the capacity to weigh on BNP’s stock price and its credit spreads. More recently, uncertainty around litigation and Sudan claims circles the bank.
Capital and leverage ratios are run tightly considering BNP’s balance sheet size.
Business Description
AS OF 05 Jan 2026- BNP is one of the most diversified banking groups in Europe, having been created from a merger of the retail/commercial bank BNP and the corporate/investment bank Paribas in 2000.
- Domestic Markets (DM) comprises the Group's four retail banking networks in the eurozone and its three specialised business lines (including leasing and digital banking). The retail banks are French Retail Banking (FRB), BNL in Italy, BNP Paribas Fortis in Belgium and BGL BNP Paribas in Luxembourg.
- International Financial Services (IFS) includes consumer finance, asset management and private banking, and subsidiaries in non-eurozone countries, including TEB in Turkey and BNP Paribas Bank Polska.
- Corporate & Institutional Banking (CIB) is a global provider of financial solutions to corporate and institutional clients and includes BNP's extensive trading and investment banking businesses.
Risk & Catalysts
AS OF 05 Jan 2026BNP Paribas remains the subject of various claims concerning the Madoff matter; amongst other claims. Litigation provisions on the balance sheet stood at €973 mn at 30 June 2025. BNP says the latest claims against it stand at $1.1 bn as of June 2025.
If there was a negative rating action on the sovereign, it is possible that BNP’s ratings will be impacted but it is difficult to say with any uncertainty. France represents around 30% of revenues and gross commitments on balance sheet and sovereign bond holdings are moderate; we discuss more below.
A U.S. court found BNP liable for $21 mn of damages to three Sudanese refugees, in connection with its alleged role in providing banking services to Sudan’s former president and enabling human rights abuses. This is immaterial for the bank, however, the concern is that the case could open the door to similar claims from other victims, via class action or individual suits.
Key Metric
AS OF 05 Jan 2026| mn | Y21 | Y22 | Y23 | Y24 | 3Q25 |
|---|---|---|---|---|---|
| Return On Equity | 8.2% | 8.2% | 9.0% | 9.3% | 9.8% |
| Total Revenues Margin | 1.8% | 1.7% | 1.7% | 1.8% | 1.8% |
| Cost/Income | 67.3% | 60.7% | 62.6% | 61.8% | 60.5% |
| CET1 Ratio (Transitional) | 12.9% | 12.3% | 13.2% | 12.9% | 12.5% |
| CET1 Ratio (Fully-Loaded) | 12.9% | 12.3% | 13.2% | 12.9% | 12.5% |
| Leverage Ratio (Fully-Loaded) | 4.1% | 4.4% | 4.6% | 4.6% | 4.3% |
| Liquidity Coverage Ratio | 143.0% | 129.0% | 148.0% | 137.0% | 138.0% |
| Impaired Loans (Gross)/Total Loans | 3.3% | 2.9% | 2.9% | 2.8% | n/a |
CreditSight View Comment
AS OF 18 Feb 2026BNP remains one of the more diversified bank names in Europe. Its strong business and geographic diversification has helped it maintain good profitability and asset quality. Earnings have been resilient, with CIB a stand-out performer. Liquidity and funding metrics look sound. Asset quality has held up well, although an outlier is the group’s personal finance business. The latter is being restructured, to focus more on auto finance rather than personal lending. BNP’s capital position is tight but it has increased its target going through to 2028. It is looking to expand now in insurance and asset management, likely to grow fee income. BNP is expected higher net income in the next few years from 2025. Several litigation overhangs exist; we maintain a Rich view on its AT1.
Recommendation Reviewed: February 18, 2026
Recommendation Changed: October 30, 2018
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Fundamental View
AS OF 05 Jan 2026ING displays robust and consistent asset quality, good earnings and a well-balanced funding profile.
These attributes are supported by its strong franchise in retail and wholesale banking in the Benelux region and its good geographic diversification.
At the same time, it has sizeable exposures to cyclical industry sectors in its Wholesale Banking division, although these have been reduced in recent years. Capital cushions are being run down over time although given higher minimum capital requirements, it recently increased its CET1 target.
Business Description
AS OF 05 Jan 2026- ING was founded in 1991 by a merger between Nationale-Nederlanden and NMB Postbank Group. It is now the largest Dutch bank by total assets.
- ING is focused on retail and commercial banking in the Benelux countries, with direct banking franchises in Germany, Spain, Italy, Australia, as well as Poland, Romania, Turkey and the Philippines.
- In April 2016, it completed the process of divesting all of its insurance business (in Europe, the US and Asia), under the Restructuring Plan conditions imposed by the European Commission after it received state aid in 2008-2009.
- In November 2016, ING announced that its resolution entity would be its holding company, ING Groep NV. ING Groep is now the issuing entity for all TLAC/MREL-eligible debt (AT1, Tier 2 and senior unsecured), and its sole operating entity is ING Bank N.V.
Risk & Catalysts
AS OF 05 Jan 2026In 2025, Moody’s amended the outlook on ING’s senior unsecured debt rating to Positive.
ING is looking to become more acquisitive, so it remains a candidate for M&A in the coming years. In 1H25, it increased its stake in Van Lanschot to 20.3%.
ING’s CET1 ratio will trend down towards its 13% target in the coming years, bringing it more in line with other major peers.
Key Metric
AS OF 05 Jan 2026| € mn | Y21 | Y22 | Y23 | Y24 | 3Q25 |
|---|---|---|---|---|---|
| Return On Equity | 8.8% | 7.1% | 14.4% | 12.6% | 14.5% |
| Total Revenues Margin | 2.0% | 1.9% | 2.3% | 2.3% | 2.2% |
| Cost/Income | 60.5% | 60.3% | 51.2% | 53.6% | 51.1% |
| CET1 Ratio (Transitional) | 15.9% | 14.5% | 14.7% | 13.6% | 13.4% |
| CET1 Ratio (Fully-Loaded) | 15.9% | 14.5% | 14.7% | 13.6% | 13.4% |
| Leverage Ratio (Fully-Loaded) | 5.9% | 5.1% | 5.0% | 4.7% | 4.4% |
| Liquidity Coverage Ratio | 139.0% | 134.0% | 143.0% | 143.0% | 140.0% |
| Impaired Loans (Gross)/Total Loans | 1.8% | 1.7% | 1.8% | 1.9% | 1.8% |
CreditSight View Comment
AS OF 11 Feb 2026After divesting its insurance operations, the remaining business, ING Bank, has stayed a solid Benelux-based bank with a strong direct banking arm in several countries. Profitability growth has been supported by a gradual recovery in the Dutch economy. Net interest income has been supported by volume growth – the bank looks in good shape versus several other core European banks and fee income is increasing. Capital ratios are trending downwards given distributions on offer to shareholders. In January 2025, it announced its intention to exit Russia but in September it was announced the deal has stalled; this will negative impact 2026 results. We moved from Outperform to Market perform on 6 February 2025.
Recommendation Reviewed: February 11, 2026
Recommendation Changed: February 07, 2025
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Search topics about wealth insights and investments.Export-Import Bank of India
- Sector: Financial Services
- Sub Sector: Financial Services
- Region: India
- Indicative Yield-to-Maturity (YTM): 4.92%
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Fundamental View
AS OF 05 Jan 2026The Export-Import Bank of India (EXIMBK) was founded in 1982. Its credit standing is built upon the key role it plays in the promotion of India’s cross border trade and investment development, as India’s official export credit agency.
EXIMBK is 100% owned by the Government of India. Given its crucial policy role, close governmental links and quasi-sovereign status, we view it as inconceivable that the Indian government would fail to provide EXIMBK with support in a timely manner, if needed.
Business Description
AS OF 05 Jan 2026- EXIMBK presently serves as a growth engine for the internationalization efforts of Indian businesses, facilitating the import of technology and export product development, export production, export marketing, pre- and post-shipment, as well as overseas investment.
- As at F1H26, EXIMBK's loan portfolio was principally made up of export finance (72%) and term loans to exporters (15%), with the remaining 14% split among the financing of overseas investment, import finance, and export facilitation. 44% come under the policy business/face GOI risk while the remaining 56% are to the commercial business.
- By geography, the bank has a primary exposure of 27% to Africa, 66% to Asia (mainly South Asia) and 6% to Europe and the Americas.
Risk & Catalysts
AS OF 05 Jan 2026As a quasi-sovereign issuer with backstops from the Government of India and the Reserve Bank of India (RBI), it is viewed as a proxy to the sovereign. Any downgrade to India’s sovereign rating will flow through to EXIMBK as well.
EXIMBK’s policy role may require it to, at times, take on exposures that could lead to financial losses. This has led to poor asset quality and high impairment charges similar to the public sector commercial banks during the years leading up to the pandemic, but asset quality is now benign post a cleanup and de-risking of its books since FY18-19.
Capital standing is robust in part thanks to capital infusions from the Government of India – INR 50 bn was injected in FY19, followed by infusions of INR 15 bn and INR 13 bn in FY20 and FY21 respectively. The bank received INR 7.5 bn in FY22 despite capital levels remaining strong during the year. No infusions have been made since FY23 due to the comfortable capital position.
Key Metric
AS OF 05 Jan 2026| INR mn | FY22 | FY23 | FY24 | FY25 | 1H26 |
|---|---|---|---|---|---|
| Net Interest Margin (Annual) | 2.19% | 2.29% | 2.06% | 1.83% | 2.55% |
| ROAA | 0.54% | 1.04% | 1.43% | 1.58% | 2.21% |
| ROAE | 3.97% | 7.76% | 11.47% | 13.16% | 17.61% |
| Equity/Assets | 14.12% | 12.87% | 12.06% | 11.95% | 13.23% |
| Tier 1 Capital Ratio | 28.6% | 23.7% | 19.6% | 23.9% | 28.5% |
| Gross NPA Ratio | 3.56% | 4.09% | 1.94% | 1.71% | 1.43% |
| Provisions/Loans | 0.90% | 1.24% | 0.29% | (0.32%) | (0.51%) |
| Pre-Impairment Operating Profit / Average Assets | 2.31% | 2.41% | 2.12% | 1.83% | 2.56% |
CreditSight View Comment
AS OF 05 Jan 2026Exim Bank of India is the country’s key policy bank with full government support. It provides financial assistance to exporters and importers with a view to promote trade in India. It is 100% owned by the Government of India (GoI) and is a proxy to the India sovereign in international debt markets (quasi-sovereign status). The bank cannot be liquidated without the government’s approval and has a track record of government capital infusions. The bank’s asset quality is back on track after some wobbles in previous years. Capital levels are strong. We maintain a Market perform recommendation on the bank.
Recommendation Reviewed: January 05, 2026
Recommendation Changed: January 04, 2021
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Fundamental View
AS OF 02 Jan 2026We shift SK Hynix back to Market perform from Outperform following its strong 3Q25 results; the company reported an acceleration in topline growth thanks to an improvement in DRAM and NAND pricing, as well as strong DRAM shipments, higher EBITDA margin on a better product mix, free operating cash flow expansion, and it turned net cash during the quarter. We remain constructive on SK Hynix credit outlook for the next 15 months, and expect the company to further expand its net cash position. That said, we think its current spreads have priced in its constructive credit outlook and positive rating agencies by all three rating agencies, as it now trades tighter than Asia BBB+ corporates and Micron.
Business Description
AS OF 02 Jan 2026- SK Hynix is one of the world’s largest memory semiconductor companies. As an Integrated Device Manufacturer (IDM), it engages in the design, manufacturing and sale of advanced memory semiconductors. It derives 78% of 3Q25 revenues from the sale of DRAM (dynamic random-access memory), 20% from NAND Flash, and the remaining 2% from CMOS Image Sensors and foundry services. The company's products are essential to a wide range of electronic devices, including PCs, servers, graphic cards, and mobile devices.
- SK Hynix holds the largest global market share (3Q25: 34%) in DRAM and second largest in NAND Flash (3Q25: 22%).
- SK Hynix is a member of SK Group, South Korea's second largest conglomerate by asset, and is 20.1%-owned by SK Square.
- The company has manufacturing facilities located in (1) South Korea — Icheon (DRAM, NAND), and Cheongju (NAND); and (2) China — Wuxi (DRAM), Dalian (NAND); and packaging & testing facilities in Chongqing, China.
- SK Hynix had a market capitalization of KRW 494.3 tn as of 2 Jan 2026.
Risk & Catalysts
AS OF 02 Jan 2026The memory sector is subjected to significant boom/bust cycles, leading to volatility in its revenue and EBITDA margin. During an upcycle, memory vendors typically expand capacity to meet strong end-demand from PC, smartphones, and servers; however, the long-lead time for new plants could result in an oversupply when end-demand is tapering off.
Capex intensity (as % of revenues) and R&D costs are elevated even in downcycles for SK Hynix, as it needs to maintain technological leadership and fast evolving product requirements from customers.
SK Hynix has large production and revenue exposure to China; rising US-China tension and restrictive US chip exports to China could destabilize the long-term prospect of its China production and weigh on its $ bonds. Though, in Oct-23 SK Hynix was designated as a “Validated End User” by the US government, which gave it an indefinite waiver for importing US chip gears to their Chinese plants.
SK Hynix may be vulnerable to US tariff risk; the company derived 71% of 3Q25 revenues from the US.
Key Metric
AS OF 02 Jan 2026| KRW bn | FY21 | FY22 | FY23 | FY24 | LTM 3Q25 |
|---|---|---|---|---|---|
| Debt to Book Cap | 23.5% | 28.1% | 37.8% | 25.6% | 21.0% |
| Net Debt to Book Cap | 13.3% | 21.2% | 27.7% | 11.6% | (0.8%) |
| Debt/Total Equity | 30.8% | 39.2% | 60.7% | 34.4% | 26.6% |
| Debt/Total Assets | 19.9% | 23.9% | 32.4% | 21.2% | 17.9% |
| Gross Leverage | 0.8x | 1.2x | 5.8x | 0.7x | 0.6x |
| Net Leverage | 0.5x | 0.9x | 4.3x | 0.3x | 0.0x |
| Interest Coverage | 87.3x | 38.7x | 3.8x | 26.5x | 48.4x |
| EBITDA Margin | 52.8% | 46.2% | 17.1% | 53.8% | 56.1% |
CreditSight View Comment
AS OF 30 Jan 2026We maintain our M/P recc on HYUELE post its robust 4Q25 results; topline growth accelerated, EBITDA margin surged YoY thanks to higher ASP, which led to its higher FOCF; debt metrics improved and HYUELE deepened its net cash position. We expect HYUELE’s debt metrics to further improve in FY26 with a deeper net cash position; this is supported by an acceleration in topline growth on the back of higher ASP and robust demand for server-related products, which should also drive stronger EBITDA margin and FOCF. We maintain our expectations for S&P and Fitch to upgrade HYUELE over the next 12 months. We think its current spreads have priced in our constructive outlook on the company; it currently trades 5 bp tighter Asia BBB corp and only 5 bp wider than Asia A- corp; we prefer its 2033 bond.
Recommendation Reviewed: January 30, 2026
Recommendation Changed: October 29, 2025
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Fundamental View
AS OF 29 Dec 2025Goldman Sachs’ performance and market share in its core legacy businesses of investment banking and sales and trading have remained very solid, working through soft periods associated with rising rates; with market conditions improving into 2025 these businesses should continue to excel.
With costs related to the exit from consumer businesses in the rear-view, recent results have reflected Goldman’s positioning for re-heating capital markets. Wealth and Asset Management is another likely area of growth in the coming years, where Goldman can leverage its strengths in HNW and alternative asset management as well as growth initiatives.
Business Description
AS OF 29 Dec 2025- Goldman Sachs is now the fifth largest bank holding company in the U.S. with approximately $1.81 tn in assets as of 3Q25 and a market capitalization of $242.8 bn as of November 24th, 2025.
- Goldman Sachs presents its activities through three business segments: Global Banking & Markets, Asset & Wealth Management, and Platform Solutions.
- Goldman's core strengths include equity and FICC sales & trading, investment banking, institutional investment management including alternatives, and high net worth wealth management. It has been expanding its wealth management client base, and adding other stable fee income sources which help diversify its revenue streams.
Risk & Catalysts
AS OF 29 Dec 2025The early 2020’s were a mixed bag– the foray into consumer lending was costly and ultimately was reversed, diverting capital and management attention and providing a meaningful drag on profitability. Goldman has re-focused on its core businesses to much recent success, though its profile will remain less diversified than large GSIB peers.
Goldman could participate in further M&A to achieve its long-term strategic goals, and recent deals have been add-on deals related to asset/wealth management.
Goldman could be impacted by various risks during periods of market turmoil, but for the most part, has been positively impacted by bouts of volatility which tend to spur more client trading activity– 2025 tariff risks being a recent example. Goldman is subject to significant market and counterparty risks as reflected in the DFAST/SCB regime.
Key Metric
AS OF 29 Dec 2025| $ mn | FY21 | FY22 | FY23 | FY24 | 3Q25 |
|---|---|---|---|---|---|
| ROAE (annual) | 21.3% | 9.7% | 7.3% | 12.0% | 13.6% |
| ROAA (annual) | 1.5% | 0.7% | 0.5% | 0.8% | 0.9% |
| PPNR / Avg. Assets | 1.86% | 1.08% | 3.29% | 3.92% | 1.25% |
| Efficiency Ratio | 54% | 65% | 282% | 266% | 61% |
| Net charge-offs (LTM) / Loans | 0.19% | 0.30% | 0.68% | 0.61% | 0.53% |
| Common Dividend Payout | 10.6% | 28.4% | 158.9% | 129.4% | 24.9% |
| CET1 Ratio | 13.6% | 15.0% | 14.4% | 15.0% | 14.3% |
| Supplementary Leverage Ratio (SLR) | 5.5% | 5.8% | 5.5% | 5.5% | 5.2% |
| Liquidity Coverage Ratio (LCR) | 122% | 129% | 128% | 126% | 128% |
CreditSight View Comment
AS OF 26 Jan 2026We are moving Goldman Sachs to Underperform from Market perform on valuation, seeing Bank of America as a better option at recent spread levels. We also see Goldman Sachs as among the least likely to reduce debt supply in light of lower debt requirements– Goldman’s issuance needs are far more determined by wholesale funding needs for the trading business than managing to regulatory requirements, particularly in active capital markets conditions as we have been in recently. We have no particular fundamental concerns and in fact expect Goldman to continue to benefit from the momentum in the dealmaking environment and secular growth in trading.
Recommendation Reviewed: January 26, 2026
Recommendation Changed: January 13, 2026
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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 24 Feb 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. Additionally we see possible technical tailwinds from lower supply as debt requirements notch downwards due to the eSLR changes that went through in late 2025.
Recommendation Reviewed: February 24, 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 29 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 29, 2026
Recommendation Changed: January 13, 2026
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