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Fundamental View
AS OF 10 Nov 2025As one of the world’s largest beverage companies KO operates across a diverse geographic footprint and generates stable and robust free cash flow.
KO’s net leverage is in a conservative position despite a recent increase in debt, at the low-end of management’s 2.0-2.5x range.
In light of recent increase price elasticity in food categories, we favor KO’s pure-play beverage portfolio to mixed food and beverage portfolio at PepsiCo.
Business Description
AS OF 10 Nov 2025- KO is the world's largest beverage company, owning, licensing, and marketing numerous brands in over 200 countries worldwide. It has 4 of the world's top 5 nonalcoholic sparkling beverage brands: Coca-Cola, Diet Coke, Fanta and Sprite.
- KO distributes its product through independent and company-controlled bottling distribution operations. KO largely refranchised its wholly-owned bottlers, selling the operations to independent bottlers. This strategy reduced capital intensity and expanded margins.
- KO has two primary businesses: Beverage Concentrates (66% of revenue) and Finished Sparkling & Still Beverages (34% of revenue). KO uses unit case volume growth and concentrate sales volume to evaluate performance.
- In 2024, the Coca-Cola system sold 33.7 bn unit cases of products worldwide, comprised of 69% from sparkling beverages and 47% from trademark Coca-Cola. The system has broad international exposure, with 84% of unit case volume generated outside the U.S.
Risk & Catalysts
AS OF 10 Nov 2025An unfavorable U.S. tax ruling could still result in some leverage creep depending on the ultimate outcome. KO is appealing the ruling, and in the meantime, management’s has steered leverage towards or below the low-end of its 2-2.5x range.
Management has expressed interest in expanding its presence over time in the alcoholic beverage category, although to this point the company has limited its involvement to licensing arrangements for its soft drink brands with large-scale brewers and distillers.
Sugar-based drinks have frequently been the target of RFK Jr’s MAHA movement, introducing risk of SNAP eligibility loss, which could create demand headwinds.
Key Metric
AS OF 10 Nov 2025| $ mn | Y21 | Y22 | Y23 | Y24 | LTM 3Q25 |
|---|---|---|---|---|---|
| Revenue | 38,658 | 43,046 | 45,784 | 46,897 | 47,475 |
| EBITDA | 12,898 | 13,961 | 14,719 | 15,446 | 16,122 |
| EBITDA Margin | 33.4% | 32.4% | 32.1% | 32.9% | 34.0% |
| EBITDA-CAPEX-INT % of Revenues | 27.9% | 26.9% | 24.8% | 25.0% | 26.2% |
| Total Debt | 42,761 | 39,149 | 42,064 | 44,522 | 47,416 |
| Net Debt | 31,835 | 28,587 | 29,701 | 31,674 | 33,542 |
| Net Leverage | 2.5x | 2.0x | 2.0x | 2.1x | 2.1x |
| EV / EBITDA | 22.4x | 21.8x | 19.4x | 19.5x | 19.8x |
CreditSight View Comment
AS OF 09 Jan 2026We have an Outperform recommendation on KO bonds, reflecting a slight preference for the credit over its high-A beverage peer, PepsiCo, at similar levels. We view both credits as core holds, but our updated view reflects increased comfort with KO’s ability to navigate an expected tax liabilities related to U.S. Tax Court litigation, as well as recent earnout payments related to the Fairlife acquisition. KO has reported steady organic growth led by continued pricing benefits and stable consumption trends across its portfolio of soft drinks. Management guides to a net leverage target of 2-2.5x and we expect the company to maintain metrics in that range over the medium term. Playing KO vs PEP also allows investors to avoid activist risk at PEP.
Recommendation Reviewed: January 09, 2026
Recommendation Changed: January 16, 2025
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Fundamental View
AS OF 07 Nov 2025In an industry beset by manufacturing issues and operational hiccups, HWM continues to perform admirably while also paying down debt.
Net adjusted leverage declined 0.2x sequentially to 1.6x and compares to 6.7x at the time of the Arconic spin in 2019. Current leverage levels justify further agency upgrades, into the A category. Recall S&P and Fitch both upgraded the credit to BBB+ this year.
We retain an Outperform view on HWM credit, which we expect will continue to move higher in ratings. We expect the credit will Outperform in a widening market environment due to its relatively short duration and defensive nature.
Business Description
AS OF 07 Nov 2025- Howmet Aerospace Inc. is the surviving entity of the legacy Alcoa Inc. following two major spin-off transactions in 2016 when Alcoa was spun off and in 2020 when Arconic was spun out. Howmet is now focused on high value add, high margin aluminum, titanium and nickel superalloy casting and forging.
- Products are sold into the Commercial Aerospace , Defense Aerospace, Commercial Transportation, and other end markets. Howmet also has four reportable segments: Engine Products Fastening Systems, Engineered Structures, and Forged Wheels. The Engine Products segment produces investment casting – including airfoils and seamless rolled rings – as well as rotating and structural parts. The Fastening Products segment produces aerospace and industrial fasteners as well as those sold into the commercial transportation, automotive, renewables, construction, and industrial equipment. Engineered Structures produces titanium ingots and mill products for aerospace and defense applications as well as produces aluminum forgings, nickel forgings, and aluminum machined components. Forged Wheels provides forged aluminum wheels and related products for heavy-duty trucks and commercial transportation.
- Howmet operates 62 facilities in 11 different countries (primarily the US and the UK) and receives the majority of its revenue from the US and Europe.
Risk & Catalysts
AS OF 07 Nov 2025Aerospace industry is still going strong even as there are signs of a potential slowdown. Domestic travel boom significantly benefited narrowbody business while international travel supporting the next stage for widebody recovery.
However, there are signs that passenger demand may start to falter- at least domestically in the US- and we’ll be tracking how much of the booming OE demand will be realized over the next few years.
Increased energy demand driven by the AI boom will be driving higher volumes and demand for HWM’s portfolio of IGT products.
Forged wheels segment faces persistent headwinds from the still-weak trucking industry. However, HWM has an edge in the segment thanks to its lightweight products.
Tariffs impacts appear to be minimal thanks to the ability to pass the costs to customers.
Key Metric
AS OF 07 Nov 2025| $ mn | Y22 | Y23 | Y24 | LTM 3Q25 |
|---|---|---|---|---|
| Revenue | 5,663 | 6,640 | 7,430 | 7,975 |
| EBITDA | 1,276 | 1,508 | 1,914 | 2,270 |
| EBITDA Margin | 22.2% | 23.0% | 26.8% | 29.4% |
| EBITDA-CAPEX-INT % of Revenues | 60.2% | 64.4% | 75.9% | 84.3% |
| Total Debt | 4,162 | 3,706 | 3,315 | 3,189 |
| Net Debt | 3,371 | 3,096 | 2,751 | 2,530 |
| Net Leverage | 2.6x | 2.1x | 1.4x | 1.1x |
CreditSight View Comment
AS OF 22 Dec 2025Howmet (Baa1/BBB+/BBB+; S/S/S) announced its deal to acquire Consolidated Aerospace Manufacturing (CAM) from Stanley Black & Decker. CAM is a fastener, fitting, and engineered product manufacturer for the aerospace and defense industry. The purchase price is $1.8 bn with an implied multiple of 17.5x (HWM trades at 37x). We estimate leverage on a pro forma basis moves to 2.4x leverage (adjusted for pension and leases), or 2.1x net. This is up half a turn from LTM levels and is in line with year-end 2024 levels. We anticipate rapid deleveraging given HWM’s projected $1.6 bn of 2026 free cash flow (FCF). The transaction will help Howmet build scale, and we continue to believe the credit can achieve A-level ratings in 2026. We retain an Outperform view.
Recommendation Reviewed: December 22, 2025
Recommendation Changed: March 02, 2022
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Search topics about wealth insights and investments.BDO Unibank
- Sector: Financial Services
- Sub Sector: Banks
- Country: Philippines
- Bond: BDOPM 4.375 30
- Indicative Yield-to-Maturity (YTM): 4.24%
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Fundamental View
AS OF 07 Nov 2025- BDO Unibank (BDO) is the largest bank in the Philippines in terms of assets & market share.
- Given its size and systemic importance, BDO is considered too big to fail and is strongly likely to be supported by its controlling shareholder SM Investments, as well as the Philippine government in times of stress.
- BDO is widely viewed as the soundest bank in the country given its strong fundamentals, well-diversified businesses, and good management.
Business Description
AS OF 07 Nov 2025- BDO Unibank was established as Acme Savings Bank in 1968, and was then acquired by SM Investments in 1976. It became a commercial bank in 1994 and a universal bank in 1996.
- BDO was listed in May 2002. SM Investments remains the bank's largest shareholder with a 41% stake.
- BDO has expanded through a series of M&As. Among its key transactions, it merged with Dao Heng Bank Philippines in 2001, Banco Santander Philippines in 2003, UOB Philippines in 2005, Equitable PCI Bank in 2007, GE Money Bank in 2009, Citibank Savings, DB Trust and Real Bank in 2014, One Network Bank in 2015 (the largest rural bank in the Philippines), and RB Pandi's banking business in 2019. It also acquired the insurance business of Generali in the Philippines in 2016.
- BDO has the largest distribution network in the country and is ranked the largest bank in terms of consolidated resources, total assets, loans, deposits and trust funds under management.
- Its loan book was split 51% large corporates, 24% middle market, and 25% consumer at 2Q25. 41% of the consumer book comprised mortgages, 29% credit cards, 13% auto loans and the remaining personal loans (13%) and others (5%).
Risk & Catalysts
AS OF 07 Nov 2025- Direct impact from US tariffs is limited given that the Philippines is not a major goods exporter, but there is likely to be some second order effects from a slowdown in regional and global growth.
- We anticipate a negative impact to loan and GDP growth from the recent public infrastructure spending corruption scandal, which will slow government spending and private investments for the next couple of quarters. Further BSP rate cuts are likely in order to support growth, which will put downward pressure on the NIM.
- We see few asset quality risks for BDO given a comfortable NPL cover (3Q25: 134%) and build up of the CET1 ratio (3Q25: 14.4%), as well as BDO’s large corporates book (~50% of total loans) and underwriting track record.
- Any rating downgrade of the Philippine sovereign would negatively impact BDO.
Key Metric
AS OF 07 Nov 2025| PHP mn | FY21 | FY22 | FY23 | FY24 | 9M25 |
|---|---|---|---|---|---|
| NIM | 4.05% | 4.14% | 4.37% | 4.35% | 4.29% |
| Reported ROA (Cumulative) | 1.2% | 1.5% | 1.7% | 1.8% | 1.7% |
| Reported ROE (Cumulative) | 10.4% | 13.0% | 15.2% | 15.1% | 14.1% |
| Equity/Assets | 11.7% | 11.3% | 11.5% | 11.8% | 11.9% |
| CET1 Ratio | 13.6% | 13.4% | 13.8% | 14.1% | 14.4% |
| NPL ratio | 2.8% | 2.0% | 1.9% | 1.8% | 1.8% |
| Provisions/Loans | 0.72% | 0.64% | 0.59% | 0.46% | 0.44% |
| PPP ROA | 2.1% | 2.3% | 2.7% | 2.5% | 2.4% |
| Liquidity Coverage Ratio | 145% | 141% | 123% | 132% | 143% |
| Net Stable Funding Ratio | 124% | 124% | 124% | 122% | n/m |
CreditSight View Comment
AS OF 07 Jan 2026BDO Unibank (BDO) is the largest bank in the Philippines by assets and market share, regarded as the country’s most sound financial institution due to its strong fundamentals, diversified businesses, and effective management. Its systemic importance makes it highly likely to receive support from SM Investments (its major shareholder) and the government during stress periods. While direct exposure to US tariffs is minimal, BDO faces risks from slower regional growth and domestic challenges such as the recent infrastructure spending corruption scandal, which may dampen loan and GDP growth. Further BSP rate cuts to stimulate the economy could pressure net interest margins, but asset quality remains robust with a high NPL cover (134%) and CET1 ratio of 14.4%. The bank’s loan portfolio is dominated by large corporates (~51%), supported by a strong underwriting track record. Any downgrade of the Philippine sovereign rating could negatively affect BDO. Its extensive M&A history and largest distribution network reinforce its leadership position in the market.
Recommendation Reviewed: January 07, 2026
Recommendation Changed: January 07, 2026
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Search topics about wealth insights and investments.Woori Financial Group
- Sector: Financial Services
- Sub Sector: Banks
- Country: Korea
- Bond: WOORIB 4.875 28
- Indicative Yield-to-Maturity (YTM): 5.108% (Indicative as of March 2)
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Fundamental View
AS OF 05 Nov 2025Woori FG’s performance record had been less consistent than some of its more commercially focused peers but improved in FY21-22. Its FY23 performance lagged behind its peers, but FY24 profit growth was peer-leading, partially thanks to not having the ELS compensation issue which hit the other three FGs in 1Q24. 9M25 performance was softer again due to several one-offs.
Asset quality used to be a strength with the lowest NPL ratios and credit costs among the four FGs but has deteriorated since 2Q23, and we no longer see a gap with the other FGs.
Capital standing is a relative weakness but is closer than ever before to that of its peers on the back of active portfolio management.
Business Description
AS OF 05 Nov 2025- Woori's predecessor banks were rescued by the Korea Deposit Insurance Corporation (KDIC) following the 1997 Asian Financial Crisis.
- Woori Bank is one of Korea's 'Big Four' commercial banks. It previously owned two regional banks, Kwangju and Kyongnam, but these were spun off in 2014. Woori also sold its stake in Woori Investment Securities and its savings bank and life insurance arms to NH Financial Group.
- Woori set up a HoldCo (Woori FG) in January 2019 to expand into more diversified business lines, particularly investment banking. It used to have a HoldCo, but it was dissolved in 2014 when it was merged with Woori Bank.
- Its main subsidiaries are 100%-owned Woori Card, Woori Financial Capital (auto leasing), Woori Investment Bank and 72.3%-owned Woori Asset Trust. In August 2024, the group relaunched securities business by acquiring Korea Foss Securities and merging it with Woori Investment. The group also acquired a 75.34% stake in Tongyang Life and full ownership of ABL Life and has consolidated them since 1 July 2025.
Risk & Catalysts
AS OF 05 Nov 2025Woori FG was for many years majority-owned by the Korean government via the Deposit Insurance Corporation (KDIC), but KDIC has steadily sold down its shareholding, and Woori purchased and cancelled the remaining shares in 2024. That said, Woori FG remains a large, systemically important bank with strong potential government backing if needed.
Woori FG is less diversified than KB and Shinhan, with most of its earnings coming from the bank and small contributions from the card and leasing businesses. The group has accelerated its M&A pace since 2024; it relaunched securities business and acquired two insurance companies. However, It will likely take more time than expected for the new non-banking segments to make a meaningful contribution to the group.
Loan growth is expected to be more challenging given tighter regulation on mortgage lending.
Key Metric
AS OF 05 Nov 2025| KRW bn | FY21 | FY22 | FY23 | FY24 | 9M25 |
|---|---|---|---|---|---|
| Pre-Provision Profit ROA | 0.99% | 1.15% | 1.10% | 1.17% | 1.07% |
| ROA | 0.66% | 0.70% | 0.54% | 0.61% | 0.71% |
| ROE | 10.6% | 11.5% | 8.3% | 9.3% | 10.9% |
| Provisions/Loans | 0.17% | 0.26% | 0.53% | 0.45% | 0.52% |
| NPL Ratio | 0.30% | 0.31% | 0.35% | 0.57% | 0.70% |
| Woori Bank CET1 Ratio | 13.0% | 12.7% | 13.2% | 13.1% | 14.5% |
| Equity/Assets | 6.45% | 6.58% | 6.71% | 6.83% | 6.33% |
| Net Interest Margin Bank + Card | 1.62% | 1.84% | 1.82% | 1.70% | 1.72% |
CreditSight View Comment
AS OF 31 Oct 2025Woori FG was for some years the weakest of Korea’s Big 4 Financial Groups. Operating performance had shown an improvement for a few years but disappointed in FY23. FY24 results were peer-leading, mainly supported by non-interest income, but 9M25 results lagged again (excl. purchase gains). The group has been seeking opportunities to expand its non-bank businesses. Its new securities entity launched in Aug-24 and the acquisition of two insurance companies were completed in Jul-25. Both the group and the bank CET1 ratios are behind peers, but a strong improvement from earlier. The bank LCR is low at ~107% and NSFR is acceptable at ~112%. We have a M/P recommendation based on senior ’29 trading levels. As a systemically important bank, government support is assured.
Recommendation Reviewed: October 31, 2025
Recommendation Changed: April 24, 2017
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Fundamental View
AS OF 05 Nov 2025Shinhan FG was the best-managed of the large Korean financial groups over many years. During the Asian Financial Crisis, it took advantage of the opportunity to acquire competitors and other businesses, increasing its scale and expanding its business lines.
Its performance has been more variable in the past few years. After a bumpy 2020, it had a better FY21 and FY22, thanks to rising interest rates. However, operating performance turned weak again in FY23, and its FY24 profit growth was softer than peers, impacted by non-bank performance. 9M25 witnessed some improvement.
In addition to owning a Big 4 bank in Korea, Shinhan FG also has a diversified non-banking business portfolio, including a leading credit card company and a top 10 securities firm.
Business Description
AS OF 05 Nov 2025- Shinhan Financial Group (Shinhan FG) is one of Korea's most diversified financial groups and the holding company of the second largest Korean bank - Shinhan Bank. It also has credit cards, securities, asset management and insurance subsidiaries.
- Shinhan Bank was set up in 1982 with seed capital from Korean residents in Japan. It was more professionally managed than the heavily politicised older banks and came through the 1997 Asian Financial Crisis in relatively good shape, taking the opportunity to acquire the larger and much longer-established Chohung Bank in 2003.
- In 2007, it made another timely acquisition, buying LG Card from its creditors after it failed during the 2003 Korean consumer lending crisis. Shinhan Card is the largest card issuer in Korea.
- Shinhan is also looking for overseas opportunities where growth is strong and Korean businesses have a presence, with a focus on Vietnam (where Shinhan Card also bought a consumer finance business in 2019) and Indonesia.
Risk & Catalysts
AS OF 05 Nov 2025As one of Korea’s “Big Four” financial groups, we believe Shinhan FG would likely receive governmental support if needed.
Asset quality pressure has been rising from domestic real estate project financing at non-bank subsidiaries, with credit costs rising from very low levels.
Loan growth is expected to be more challenging given tighter regulation on mortgage lending like its peers.
Profit growth may encounter challenges if there is volatility in the KRW, which could lead to significant FX losses.
Key Metric
AS OF 05 Nov 2025| KRW bn | FY21 | FY22 | FY23 | FY24 | 9M25 |
|---|---|---|---|---|---|
| Pre-Provision Profit ROA | 1.11% | 1.10% | 1.23% | 1.19% | 1.30% |
| ROA | 0.66% | 0.72% | 0.66% | 0.63% | 0.80% |
| ROE | 9.2% | 10.0% | 8.6% | 8.4% | 11.1% |
| Provisions/Average Loans | 0.28% | 0.34% | 0.57% | 0.51% | 0.41% |
| NPL Ratio | 0.39% | 0.41% | 0.56% | 0.71% | 0.76% |
| CET1 Ratio | 13.10% | 12.79% | 13.17% | 13.02% | 13.56% |
| Equity/Assets | 7.3% | 7.6% | 7.8% | 7.6% | 7.4% |
| Net Interest Margin | 1.81% | 1.96% | 1.97% | 1.93% | 1.90% |
CreditSight View Comment
AS OF 31 Oct 2025Shinhan FG is one of the four nation-wide commercial banking groups in Korea, with a leading credit card arm. As a systemically important bank, government support is assured. It had over many years the best operating track record, but lost its way and KB and Hana caught up; its performance was inconsistent for a few years but has improved recently. Its 9M25 returns remained high and just behind KBFG. Its CET 1 ratio was also slightly behind KBFG but leading the other two peers. The bank LCR is low at ~105% and NSFR is acceptable at ~111%. It NPL coverage ratio has declined but still decent at 124%, and it plans to lower the CET 1 ratio to slightly above 13%. We are downgrading it to U/P on tight valuations.
Recommendation Reviewed: October 31, 2025
Recommendation Changed: October 31, 2025
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Fundamental View
AS OF 05 Nov 2025KB Financial Group has grown steadily through the acquisitions of non-bank companies in Korea and small banks in Indonesia and Cambodia. Its banking subsidiary, Kookmin Bank, operates the largest branch network in Korea, with a particularly strong presence in the retail market. This makes it a systemically important bank, with strong potential government support if needed.
The group has a good track record, and its large mass-market franchise gives it a strong customer base. It has a well-diversified business and the highest CET1 ratio among the four major financial groups.
Business Description
AS OF 05 Nov 2025- KB Financial Group (KBFG) is a well-diversified and well-run group. Its main subsidiaries, in addition to Kookmin Bank (KB), are Kookmin Card, KB Insurance, KB Securities, KB Capital (leasing), and KB Asset Management.
- KB was the result of several mergers after the Asian economic crisis of the late 1990s. Its main predecessors were Citizen's National Bank and Housing & Commercial Bank, both retail-focused banks that have given it the leading position in Korean retail banking.
- For the near term, the group doesn't expect further M&A. It has looked for growth overseas, focusing on Indonesia (where it has taken a 67% stake in Bank Bukopin) and Cambodia (it took a 100% shareholding in Prasac, a micro-finance lender, over 2020-21). It also bought Prudential Financial's Korean insurance business in 2020, which was subsequently merged with KB Insurance.
Risk & Catalysts
AS OF 05 Nov 2025As one of Korea’s “Big Four” financial groups, we believe that KBFG would likely receive governmental support if needed.
Substantial preemptive provisions led to higher credit costs than peers in 1H25 but Q3 witnessed a normalization. Management’s FY25 credit costs guidance of mid-40 bp aligns with non-Hana peers. KBFG has the highest NPL coverage ratio among the Big 4.
KBFG has the highest NIM among the four FGs, largely thanks to the highest NIM at Kookmin bank among the Big 4 banks. However, its NIM trend lagged peers YTD.
KBFG is expanding by business line and overseas with a focus on Indonesia and Cambodia—markets with more favourable demographics, growth potential, and profit margins than Korea but also more risk.
Loan growth is expected to be more challenging given tighter regulation on mortgage lending.
Key Metric
AS OF 05 Nov 2025| KRW bn | FY21 | FY22 | FY23 | FY24 | 9M25 |
|---|---|---|---|---|---|
| Pre-Provision Profit ROA | 1.14% | 1.05% | 1.36% | 1.37% | 1.37% |
| ROA | 0.69% | 0.57% | 0.65% | 0.68% | 0.83% |
| ROE | 10.2% | 8.8% | 9.1% | 9.7% | 12.3% |
| Provisions/Loans | 0.31% | 0.45% | 0.73% | 0.45% | 0.31% |
| NPL ratio | 0.33% | 0.34% | 0.57% | 0.65% | 0.70% |
| CET1 Ratio | 13.5% | 13.2% | 13.6% | 13.5% | 13.8% |
| Equity/Assets | 7.3% | 7.9% | 8.2% | 7.9% | 7.7% |
| Net Interest Margin | 1.83% | 1.96% | 2.08% | 2.03% | 1.97% |
CreditSight View Comment
AS OF 31 Oct 2025KBFG is the largest of the “Big 4” financial groups in S Korea, and its banking subsidiary, Kookmin Bank, enjoys the strongest franchise with a particularly strong retail, as it was a government retail bank that was privatized in 1995. As a systemically important bank, government support is assured. KBFG has a good track record and a well-diversified business. Capital standing is the key strength, with the current highest group CET1 ratio. The NPL coverage ratio has declined significantly in recent quarters but remained the highest among the Big 4. The bank LCR is low in the ~105 area but NSFR good in the ~115% area. It delivered the highest returns among the Big 4 in 9M25, but topline performance was softer than peers. We are downgrading it to U/P on tight valuations.
Recommendation Reviewed: October 31, 2025
Recommendation Changed: October 31, 2025
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Fundamental View
AS OF 05 Nov 2025Hana Financial Group (Hana FG) struggled for several years to make its acquisition of the former Korea Exchange Bank a success, but results improved dramatically in 2015 as revenues grew and cost efficiencies improved. It has produced strong results since 2020.
The group is looking for inorganic growth in its non-bank businesses as it has fallen behind Shinhan FG and KBFG in this area, but has so far shied away from a large acquisition.
Hana Bank has the highest CET 1 ratio among the Korean Big 4 banks.
Business Description
AS OF 05 Nov 2025- Hana FG is the third-largest financial group in South Korea. From small origins as a finance company in the 1970s, after the 1997 Asian crisis, Hana grew by acquiring three other banks, including the much older Seoul Bank, which had a banking and trust management business.
- Hana FG bought Korea Exchange Bank (KEB) from Lone Star in 2012 after overcoming many hurdles, but due to staff union opposition, it could not merge with Hana Bank until 2015.
- Hana FG's overseas business is smaller than its peers, and is complemented by KEB's extensive international operations. KEB was started in 1967 as a government-owned bank specializing in foreign exchange. It had a leading share in FX transactions and trade finance among Korean banks.
- Hana FG has shown good growth in its credit card and securities non-bank businesses, but is less diversified than its larger peers KB and Shinhan, which have also acquired insurance companies. Its latest acquisition (in 2019) was a 15% stake in Vietnam's state-owned Bank for Investment & Development (BIDV). In 2023, Hana FG decided not to proceed with the acquisition of KDB Life Insurance after two months of due diligence.
Risk & Catalysts
AS OF 05 Nov 2025Hana FG’s credit costs at ~30 bp in FY24 and 9M25 were lower than peers (in the range of 46-52 bp). However, the group’s NPL coverage ratio was also ~20-30 ppt behind peers.
NIMs are lower than those of KB and Shinhan at both the group and bank levels. The profit contribution from non-bank entities to group profits is also lagging behind these two peers. Both metrics are comparable to Woori’s.
Non-banking businesses have underperformed in recent years, with profit contributions falling from 20–30% in 2019–2021 to around 10%, primarily due to elevated provisions for domestic real estate project financing and valuation losses related to overseas commercial real estate.
Loan growth is expected to be more challenging given tighter regulation on mortgage lending.
Key Metric
AS OF 05 Nov 2025| KRW bn | FY21 | FY22 | FY23 | FY24 | 9M25 |
|---|---|---|---|---|---|
| Pre-Provision Profit ROA | 1.07% | 1.10% | 1.11% | 1.00% | 1.11% |
| ROA | 0.74% | 0.66% | 0.59% | 0.61% | 0.72% |
| ROE | 10.9% | 10.1% | 9.0% | 9.1% | 10.6% |
| Provisions/Loans | 0.16% | 0.34% | 0.46% | 0.32% | 0.29% |
| NPL Ratio | 0.32% | 0.34% | 0.50% | 0.62% | 0.73% |
| CET1 Ratio | 13.8% | 13.2% | 13.2% | 13.2% | 13.3% |
| Equity/Assets | 6.8% | 6.4% | 6.6% | 6.7% | 6.7% |
| Net Interest Margin | 1.66% | 1.83% | 1.82% | 1.69% | 1.72% |
CreditSight View Comment
AS OF 31 Oct 2025Hana FG grew through acquisitions but only in 2015 was it able to merge its two main bank units to form KEB-Hana Bank. Hana’s management has a good record but for some years struggled to extract value from its acquisitions. Its performance for the past few years has generally been strong. More focus has been put on RWA management and capital enhancement since 2H24. There is potential for further improvements in the non-bank segment. Hana’s credit costs were lower than those of its peers, but this has also resulted in the lowest NPL coverage ratio at ~105% among the four FGs. The bank LCR and NSFR are low at 106-107%. The group aims to maintain a CET1 ratio of 13-13.5%. We are downgrading it to U/P on tight valuations.
Recommendation Reviewed: October 31, 2025
Recommendation Changed: October 31, 2025
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Search topics about wealth insights and investments.Reliance Industries
- Sector: Manufacturing
- Sub Sector: Diversified Conglomerates
- Country: India
- Region: India
- Bond: RILIN 4.125 25
- Indicative Yield-to-Maturity (YTM): 5.531% (Indicative as of March 2)
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Fundamental View
AS OF 04 Nov 2025We are comfortable with Reliance’s large diversified scale of operations and dominant presence in various key sectors (refining, petrochemicals, retail and telecom), which allows for earnings resilience.
We believe a lackluster oils-to-chemicals outlook is well mitigated by strong outlooks for telecom and retail.
Plans to ramp up its renewable energy business could provide the next leg of growth and improve ESG perception.
Reliance incurs significant capex that has weighed on free cash flow generation, though we acknowledge its historically prudent financial management and robust credit metrics that provide ample elbowroom for some credit profile deterioration.
Business Description
AS OF 04 Nov 2025- RIL is an Indian diversified conglomerate engaged in oil & gas refining, marketing, petrochemicals, organized retail, telecom and digital services, amongst others. It is the largest company in India by revenue, profits, exports and market capitalization (INR 20 tn).
- It is the second largest refiner in India and produces petroleum products such as petrol, high-speed diesel (HSD), aviation turbine fuel (ATF), LPG and lubricants.
- It is the largest petrochemicals producer in India, boasting production of ~38 mn tons in FY20. Through its integrated Jamnagar refinery complex, it produces Polymers/Plastics, Elastomers (synthetic rubber) and Polyester products.
- It is the largest retailer in India in terms of revenue. It operates 18.8k stores (as of March 2024) to sell products ranging from consumer electronics, fashion and lifestyle, grocery, petrol retail and telecom and digital services. It launched its online retail channel, 'JioMart', in December 2019.
- Reliance Jio is the largest mobile telecom operator by subscriber base (482 mn as of March 2024) in India and boasts the widest 4G wireless network in the country.
- In 2021, RIL announced investments to the tune of INR 750 bn/ $10 bn (for next 3 years) to build a renewable energy ecosystem which will include 4 giga factories. Set to be located in Gujarat, the factories will produce solar modules, hydrogen, fuel cells and battery grid to store electricity. Long-term goals also include building 100 GW of PV solar plants by 2030.
Risk & Catalysts
AS OF 04 Nov 2025Reliance’s O2C (oil-to chemicals) margins remain under pressure from global tariff-led growth slowdown concerns and persisting oversupply conditions in China.
Reliance incurs significant capex at historically high levels, particularly from continued investments into its O2C, retail, and nascent renewables businesses. This has weighed on its free cash flow generation, though we take comfort in Reliance’s historically prudent financial management and robust credit metrics.
Reliance faces key-person risk; 65-year old Chairman Mukesh Ambani has begun to hand over the reins of the company’s different business divisions to his children.
Key Metric
AS OF 04 Nov 2025| INR bn | FY23 | FY24 | FY25 | F1H25 | F1H26 |
|---|---|---|---|---|---|
| Debt to Book Cap | 35.3% | 33.1% | 31.9% | 32.7% | 31.2% |
| Net Debt to Book Cap | 29.9% | 26.1% | 24.8% | 26.4% | 23.9% |
| Debt/Total Equity | 54.5% | 49.6% | 46.9% | 48.6% | 45.4% |
| Debt/Total Assets | 28.1% | 26.1% | 24.3% | 25.6% | 23.4% |
| Gross Leverage | 3.2x | 2.8x | 2.9x | 2.9x | 2.7x |
| Net Leverage | 2.7x | 2.2x | 2.2x | 2.3x | 2.1x |
| Interest Coverage | 5.0x | 7.0x | 6.8x | 6.9x | 6.7x |
| EBITDA Margin | 15.9% | 17.7% | 16.9% | 16.5% | 17.5% |
CreditSight View Comment
AS OF 08 Dec 2025We have a Market perform recommendation on Reliance (RIL); we would avoid its 2045 and 2052 on tight valuations. We like RIL’s large diversified operations and dominant market shares in key sectors (refining, retail and telecom) that boosts earnings resilience. Its growing renewable business could aid ESG investor sentiment too. While we acknowledge persisting weakness in the O2C segment and RIL’s elevated capex needs, we think the impact is mitigated by RIL’s prudent financial management and healthy credit metrics that provide ample elbowroom for some credit profile deterioration. While key man risk remains a concern, we take comfort in gradually progressing succession plans.
Recommendation Reviewed: December 08, 2025
Recommendation Changed: June 30, 2021
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Search topics about wealth insights and investments.Netflix Inc
- Sector: Media
- Sub Sector: Technology
- Region: US
- Bond: NFLX 4.875 30
- Indicative Yield-to-Maturity (YTM): 4.30%
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Fundamental View
AS OF 28 Oct 2025- Netflix is one of the few clear winners in the industry’s transition to streaming, and we believe the group’s leading position will be bolstered in 2025/2026 as legacy media companies continue to rein in spending and international ambitions.
- From a financial perspective, we expect Netflix will deliver ~25% EBITDA growth in 2025 driven by a mix of subscriber growth, price hikes and margin expansion.
- Netflix’s financial policy is relatively conservative. While the company no longer targets $10-15 billion of gross debt, we view Netflix’s new financial policy as an evolution rather than a revolution and expect credit metrics to remain best in class.
Business Description
AS OF 28 Oct 2025- NFLX is the world's leading subscription streaming entertainment service with ~300+ mn paid streaming subs in 190+ countries around the world. NFLX's programming includes original & acquired TV series, documentaries and feature films.
- NFLX began expanding internationally with the launch of services in Canada (Sep 2010), followed by LatAm (Sep 2011), and the UK and Ireland (Jan 2012). NFLX launched services in 17 more markets at a measured pace through the end of 2015 before launching in the rest of the world in Jan 2016 (ex-China, N Korea, Syria, Crimea).
- As of FY24, Netflix's regional subscriber breakdown was as follows: (1) EMEA - 101.1 mn; (2) UCAN - 89.6 mn; (3) APAC - 57.5 mn and (4) LATAM - 53.3 mn.
- Ted Sarandos and Greg Peters are Co-CEOs, with Mr. Sarandos appointed to the position in July 2020 and Mr. Peters in January 2023. Co-founder Reed Hastings was appointed as executive chairman of the Board in January 2023.
Risk & Catalysts
AS OF 28 Oct 2025- M&A Risk: Warner Bros. Discovery is actively considering asset sales. We believe Netflix has no interest in linear TV assets, but could be open to a studio purchase under the right circumstances. Additionally, Netflix is in the early stages of an expansion into video games and has already acquired several studios.
- Increased Competition: Several large competitors including Amazon and Apple are increasingly leaning into DTC video offerings on a global basis. Heightened competition may result in rising churn & declining gross additions for NFLX.
- Market Saturation: Netflix is highly penetrated in the US market, so future growth will become increasingly dependent on price increases, uptake of the ad tier and success on the password sharing crackdown. The recent WWE and NFL deals also opens the door to higher-priced sports programming.
Key Metric
AS OF 28 Oct 2025| $ mn | FY21 | FY22 | FY23 | FY24 | LTM 3Q25 |
|---|---|---|---|---|---|
| Revenue | 29,698 | 31,616 | 33,723 | 39,001 | 43,379 |
| Revenue YoY % | 18.8% | 6.5% | 6.7% | 15.6% | 15.4% |
| EBITDA | 6,806 | 6,695 | 7,650 | 11,019 | 13,265 |
| EBITDA Growth | 33% | (2%) | 14% | 44% | 29% |
| Cash Content Expense | 17,469 | 16,660 | 13,140 | 17,003 | 17,209 |
| CFO - CapEx | (132) | 1,619 | 6,926 | 6,922 | 8,967 |
| Dividends/CFO-Capex | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| LTM CFO-CapEx to Debt | (0.9%) | 11.3% | 47.6% | 44.4% | 62.0% |
CreditSight View Comment
AS OF 06 Jan 2026Netflix is one of the few clear winners in the industry’s transition to streaming, and we believe the group is well positioned to maintain its double-digit top line and profit growth in 2025 and 2026. The company’s gross leverage is already best in class at ~1.1x, and we expect Netflix can generate ~$9 billion of FCF in FY25 with a FCF to debt ratio in the ~60% area. However, Netflix’s plan to acquire Warner Bros marks an abrupt shift in its historical (and extremely successful) strategy focused on organic investment. While WB is admittedly a one of a kind asset, an acquisition of this magnitude would subject the company to significant integration/execution risks and raises questions about whether Netflix’s growth algorithm is running out of steam.
Recommendation Reviewed: January 06, 2026
Recommendation Changed: December 04, 2025
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Search topics about wealth insights and investments.Commonwealth Bank of Australia
- Sector: Financial Services
- Sub Sector: Banks
- Region: Australia
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Fundamental View
AS OF 21 Oct 2025CBA has a very strong franchise in Australia; it is the leader in the retail market and is making good progress in challenging NAB in business banking.
It has been the best managed of the Australian banks for many years, and has outperformed peers. It lost some of its luster in the latter part of the 2010s due to regulatory and compliance lapses amid charges of complacency, but has since improved into a better institution.
Its capital and liquidity position is robust, and asset quality is strong.
Business Description
AS OF 21 Oct 2025- Originally established by the Australian government in 1911, CBA functioned for some time as Australia's central bank until the establishment of the Reserve Bank of Australia in 1959. It remained under government ownership until the early 1990s, after which it underwent a transformation from a bureaucratic public sector bank into a widely respected commercial organisation.
- Over the past couple of decades, CBA consolidated its position as the leading bank in Australia with a 24-28% share in household deposits and lending, helped by its acquisition of Bank of Western Australia during the 2008 crisis.
- In New Zealand it owns ASB Bank, but otherwise has been selling non-core assets, including its life insurance business.
Risk & Catalysts
AS OF 21 Oct 2025CBA’s financial health is closely linked to the Australian economy, in particular retail credit quality, mainly housing loans. Household confidence is improving, but they continue to be stretched; discretionary consumer spend is improving though on growth in real disposable incomes. Unemployment continues to be comfortable.
Earnings/NIMs are under pressure from strong mortgage market and deposit competition. Business banking growth however has been stellar and highly profitable.
The interest rate cuts coming through from the RBA will improve borrowers’ ability to make interest payments.
Key Metric
AS OF 21 Oct 2025| AUD mn | Y22 | Y23 | Y24 | Y25 |
|---|---|---|---|---|
| Return on Equity | 12.7% | 14.0% | 13.6% | 13.5% |
| Total Revenues Margin | 2.1% | 2.2% | 2.2% | 2.2% |
| Cost/Income | 46.3% | 43.7% | 45.0% | 45.7% |
| APRA CET1 Ratio | 11.5% | 12.2% | 12.3% | 12.3% |
| International CET1 Ratio | 18.6% | 19.1% | 19.1% | 20.9% |
| APRA Leverage Ratio | 5.2% | 5.1% | 5.0% | 4.7% |
| Impairment Charge/Avg Loans | (0.0%) | 0.1% | 0.1% | 0.1% |
| Gross Impaired Loans/Total Loans | n/m | 0.8% | 1.0% | 1.1% |
| Liquidity Coverage Ratio | 130% | 131% | 136% | 130% |
| Net Stable Funding Ratio | 130% | 124% | 116% | 115% |
CreditSight View Comment
AS OF 11 Nov 2025CBA operates as a well-oiled machine in the Australian banking market. It has the leading position in mortgages and deposits, and is challenging NAB in business banking. An AUSTRAC penalty in 2018 damaged its reputation and remediation costs impacted earnings for a couple of years. The bank sold a number of its non-bank business and equity investments to simplify and focus on its core domestic businesses. It has the highest NIM amongst the Aussie banks. Business banking growth has been stellar and highly profitable. Asset quality is comfortable. Its seniors trade marginally tight but at an acceptable level, while its Tier 2s trade fair.
Recommendation Reviewed: November 11, 2025
Recommendation Changed: October 05, 2016
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