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Fundamental View
AS OF 24 Jul 2025Krung Thai Bank is the 3rd largest bank by assets in Thailand, with a 55.07% state ownership through the Financial Institutions Development Fund. We see strong government support underpinning KTB’s underlying credit profile.
The state influence opens the bank up to potentially government-directed lending; it has secured an increasingly meaningful portion of banking business from government agencies and State Owned Enterprises, which underscored its one-notch upgrade by Fitch in Dec-21.
KTB was faced with asset quality challenges in the past and had the highest NPL ratio and restructured loans among the major Thai banks. It has since de-risked its loan book, and asset quality has proven to be more resilient than its peers with lower COVID-19 restructured loans.
Business Description
AS OF 24 Jul 2025- KTB is the 3rd largest bank by assets in Thailand. The Thai Financial Institutions Development Fund owns 55.07% of the bank, and has a free float of 44.93%.
- Being the largest state-owned bank, it secures a meaningful portion of banking business from government agencies and State Owned Enterprises (SOEs) and per the bank, is the preferred bank for the government and SOE employees.
- Though state owned, the bank runs on a commercial basis and is not considered as a policy bank.
- KTB's loan profile comprised 45% retail, 25% private corporates, 10% SME, and 20% Government & SOEs at June 2025.
Risk & Catalysts
AS OF 24 Jul 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 also downgraded its rating outlook on the Thailand sovereign, and consequently the Thai banks including KTB, to negative on 29 April 2025, citing increased risks to Thailand’s economic and fiscal strength, partly due to the potential impact of new US tariffs.
NIM pressure is set to continue into the coming quarters on the back of rate cuts to support growth, exacerbated by KTB’s domestically and large corporates focused book. Loan growth will also remain middling across the Thai banks due to a focus on quality amid the current backdrop.
However, we take comfort in KTB’s conservative focus on the government agencies/SOEs segment, which is supporting asset quality well amid the challenging environment.
Key Metric
AS OF 24 Jul 2025| THB mn | FY21 | FY22 | FY23 | FY24 | 1H25 |
|---|---|---|---|---|---|
| PPP ROA | 1.83% | 1.98% | 2.40% | 2.45% | 2.50% |
| ROA | 0.63% | 0.94% | 1.01% | 1.20% | 1.21% |
| ROE | 6.1% | 9.2% | 9.4% | 10.6% | 10.3% |
| Equity/Assets | 10.5% | 10.9% | 11.4% | 12.3% | 12.2% |
| CET1 Ratio | 15.6% | 15.6% | 16.5% | 17.9% | 18.3% |
| Calculated NPL ratio | 3.50% | 3.26% | 3.08% | 2.99% | 2.94% |
| Provisions/Loans | 1.31% | 0.93% | 1.43% | 1.18% | 1.23% |
| Gross LDR | 99% | 98% | 104% | 100% | 97% |
| Liquidity Coverage Ratio | 196% | 201% | 202% | 207% | n/m |
CreditSight View Comment
AS OF 23 Oct 2025KTB is the 3rd largest bank in Thailand by assets and the largest state-owned bank. It is 55% indirectly owned by the Thai government and thus secures meaningful business from government agencies and SOEs (~20% of total loans), which has undergirded its stable asset quality during and post-COVID; it was faced with asset quality challenges in the past, but fundamentals have improved as it de-risked its loan book. We see greater NIM pressure on KTB than most peers from the turn in base rates. 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. The CET1 ratio though is solid at ~18% and the loan mix is safer than peers. We have it on M/P as the $ AT1 has <1 year to call date.
Recommendation Reviewed: October 23, 2025
Recommendation Changed: April 22, 2025
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Fundamental View
AS OF 24 Jul 2025Bangkok Bank is a family run conservative financial institution, with high capital and liquidity levels.
It acquired Indonesia’s Permata Bank in 2020 which resulted in a meaningful decline in its CET1 ratio to 14%. It is back to ~16% range and management aims to keep the CET1 ratio at ~16% in preparation for Basel III final reforms.
Profitability (ROA and ROE) has historically been below the industry average, due in part to higher exposure to the lower-yielding corporates segment that has resulted in a lower NIM. However, the returns gap has narrowed as this has supported its relatively better asset quality than most peers in a prolonged sluggish macroeconomic environment.
Business Description
AS OF 24 Jul 2025- Bangkok Bank was set up in 1944 and was listed on the Stock Exchange of Thailand in 1975. It is a family-run bank and the current President of the bank, Chartsiri Sophonpanich, is the grandson of the founder of the bank.
- It is the largest bank by assets in Thailand. It was briefly surpassed by Kasikornbank in 2018, but the Bank Permata acquisition has taken BBL back to No.1.
- The bank is corporate-loan focused, and the loan book was split 49% corporate, 16% SME, 12% retail, and 23% international as at June 2025. It is by far the most international amongst the Thai banks, with branches in 14 economies.
- BBL's overseas presence has been enhanced by the acquisition of Bank Permata, the 12th largest bank in Indonesia. Bank Permata's asset size is ~10% of that of BBL.
Risk & Catalysts
AS OF 24 Jul 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 also downgraded its rating outlook on the Thailand sovereign, and consequently the Thai banks including BBL, to negative on 29 April 2025, citing increased risks to Thailand’s economic and fiscal strength, partly due to the potential impact of new US tariffs.
NIM pressure is set to continue into the coming quarters on the back of rate cuts to support growth. Loan growth will also remain middling across the Thai banks due to a focus on quality amid the current backdrop. However, we take comfort in BBL’s prudent provisioning, high loan loss buffers and safer large corporate book.
The acquisition of Bank Permata of Indonesia in May 2020 provides BBL with exposure to the high growth opportunities of the Indonesian market, but this also presents higher risks.
Key Metric
AS OF 24 Jul 2025| THB mn | FY21 | FY22 | FY23 | FY24 | 1H25 |
|---|---|---|---|---|---|
| PPP ROA | 1.65% | 1.60% | 1.92% | 2.02% | 2.15% |
| ROA | 0.65% | 0.67% | 0.93% | 1.00% | 1.07% |
| ROE | 5.6% | 5.9% | 8.1% | 8.3% | 8.7% |
| Equity / Assets | 11.4% | 11.5% | 11.8% | 12.2% | 12.5% |
| CET1 Ratio | 15.2% | 14.9% | 15.4% | 16.2% | 16.7% |
| Calculated NPL ratio | 3.20% | 3.10% | 2.70% | 2.70% | 3.20% |
| Provisions / Loans | 1.38% | 1.24% | 1.26% | 1.30% | 1.47% |
| Gross LDR | 82% | 84% | 84% | 85% | 85% |
| Liquidity Coverage Ratio | 270% | 271% | 277% | 265% | n/m |
CreditSight View Comment
AS OF 19 Nov 2025Bangkok Bank’s strength has been its large corporate book and strong capital. It completed the acquisition of Indonesia’s Bank Permata (~12% of loans) in 2Q20 which reduced its CET1 ratio to 14%, but it has since rebuilt it to ~18%. Returns though have been lower due to thinner corporate margins, and we see greater NIM pressure on BBL than most peers from the turn in base rates. Disclosure from BBL is less than peers and credit costs rose in 9M25. However, we take comfort in BBL’s strong loss buffers and large corporate book. 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 recommendation on the name.
Recommendation Reviewed: November 19, 2025
Recommendation Changed: April 22, 2025
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Search topics about wealth insights and investments.The Export-Import Bank of Korea
- Sector: Financial Services
- Sub Sector: Banks
- Region: Korea
- Bond: EIBKOR 5.125 33
- Indicative Yield-to-Maturity (YTM): 4.55%
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Fundamental View
AS OF 23 Jul 2025KEXIM is a pure policy bank that is directly and indirectly wholly owned by the government of the Republic of Korea, which is obliged under Article 37 of the Export-Import Bank of Korea Act to fund any losses that cannot be covered by the bank’s reserves.
While this is a solvency guarantee and does not explicitly guarantee the timely repayment of debt, we view it as inconceivable that the Korean authorities would fail to provide KEXIM with support in a timely manner, should this be needed, given its crucial policy role and close government links.
Business Description
AS OF 23 Jul 2025- KEXIM was set up in 1976 to support Korean companies in their overseas business through export credit guarantee programs, as well as providing finance for imports and for overseas investment. It provides funding for both short term trade and long term investment, and manages two government-entrusted funds: the Economic Development Cooperation Fund (EDCF), a Korean official development assistance program, and the Inter-Korean Cooperation Fund (IKCF), an economic cooperation program to promote exchanges with North Korea. It is also a conduit through which the government doled out COVID-19 assistance to affected companies.
- Till 2030, KEXIM aims to preferentially focus on seven sectors (hydrogen energy, wind and solar power, rechargeable battery and energy storage systems (ESS), future mobility, 5G and next-generation semiconductors, pharmaceutical and healthcare, and digital technology and cultural content) which are considered new growth drivers of the Korean economy. It has historically focused on the shipbuilding and engineering & construction industries.
- KEXIM is 100% owned by the Korean government: 76% directly and the remainder through stakes held by the Bank of Korea (7%) and Korea Development Bank (17%). In contrast to peer policy banks IBK and KDB, KEXIM has remained more consistently a policy bank but its role has been adjusted to ensure it complements rather than competes with the Korean commercial banks.
Risk & Catalysts
AS OF 23 Jul 2025Previous Korean governments have made moves to privatise the other policy banks, but KEXIM has retained its policy bank role and government ownership, which are not likely to change.
Korea’s shipbuilders have long been the largest users of KEXIM’s services. Losses on exposure to the sector, in particular Daewoo Shipbuilding (DSME), pushed KEXIM into the red in 2016 but the government injected capital and its condition has recovered.
Together with KDB, KEXIM has played a key role in helping corporate Korea survive the COVID-19 induced crisis.
Key Metric
AS OF 23 Jul 2025| KRW bn | FY20 | FY21 | FY22 | FY23 | FY24 |
|---|---|---|---|---|---|
| Pre-Impairment Operating Profit / Average Assets | 1.2% | 1.1% | 1.1% | 1.1% | 1.1% |
| ROAA | 0.1% | 0.5% | 0.4% | 0.6% | 0.8% |
| ROAE | 0.7% | 3.2% | 2.7% | 4.7% | 5.2% |
| Provisions/Average Loans | 1.2% | 0.5% | 0.8% | 0.3% | 0.1% |
| Nonperforming Loans/Total Loans | 1.8% | 1.9% | 1.2% | 0.7% | 0.9% |
| CET1 Ratio | 13.4% | 13.3% | 11.8% | 12.9% | 13.9% |
| Total Equity/Total Assets | 14.8% | 15.1% | 12.6% | 14.3% | 16.3% |
| Net Interest Margin (NIR/Ave Assets) | 0.9% | 0.9% | 0.9% | 0.7% | 0.6% |
CreditSight View Comment
AS OF 15 Sep 2025KEXIM is a wholly government owned policy bank benefiting from a Korean government solvency guarantee. It plays a key role in financing large-ticket exports in particular ships and large-scale overseas engineering projects. Its credit exposures include some industry and borrower concentrations especially to Korea’s shipbuilders and its financial performance has at times suffered. But the Korean government has always acted in a timely manner to endure its solvency, and with this strong backing we view it as a sound credit. We view its secondary levels as in line with where we would expect it to trade, and so continue with our Market perform recommendation.
Recommendation Reviewed: September 15, 2025
Recommendation Changed: September 22, 2020
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Country Overview
AS OF 08 Jul 2025- Oil-dependent economy with diversification efforts: While oil and gas remain the primary drivers of Oman’s economy, contributing significantly to GDP and government revenue, the country is actively pursuing economic diversification through its “Vision 2040” plan. This aims to boost non-oil sectors like manufacturing, tourism, logistics, agriculture, and fisheries.
- Positive growth driven by non-oil sectors: Oman’s GDP has shown growth in recent periods, largely propelled by the expansion of non-oil activities, including manufacturing, services, and construction, even amidst OPEC+ oil production cuts. Natural gas production is also a growing contributor.
- Fiscal reforms and debt reduction: The Omani government has implemented significant fiscal reforms, including a VAT and subsidy reductions, which have helped shift fiscal and external balances into surpluses since 2022. This prudent management has substantially reduced public debt, improving the country’s financial stability and investor confidence.
Our View
AS OF 28 Nov 2025Oman possesses a developing, hydrocarbon-reliant economy, ranking as the 73rd largest globally by nominal GDP as of 2024, estimated at around USD 107 billion. Its economic foundation is primarily built upon its oil and gas reserves, which historically accounted for a significant portion of its GDP and export earnings, though diversification efforts are underway. While still dominant, the government has been actively promoting non-oil sectors like tourism, logistics, manufacturing, and mining through its Oman Vision 2040 initiative to reduce economic reliance on hydrocarbons. The country benefits from its strategic location at the mouth of the Persian Gulf, facilitating trade. It maintains strong economic ties with Gulf Cooperation Council (GCC) member states and Asian economies. Oman’s economic outlook for 2025 is shaped by global energy prices, the success of its diversification programs, and regional stability.
Recommendation Reviewed:
Recommendation Changed:
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Search topics about wealth insights and investments.Korea Electric Power Corp.
- Sector: Energy
- Sub Sector: Utilities
- Region: Korea
- Bond: KORELE 5.5 28
- Indicative Yield-to-Maturity (YTM): 4.858%
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Fundamental View
AS OF 07 Jul 2025- KEPCO is Korea’s only fully integrated electricity utility and is considered a quasi-sovereign credit, with its financial strength anchored by a very high level of government support stemming from its essential role in securing the nation’s power supply.
- In FY24, KEPCO’s credit profile improved significantly due to higher tariffs and stabilizing fuel costs, driving strong rebounds in revenue, EBITDA margin, and cash flow. Credit metrics strengthened, with total debt/EBITDA and net debt/EBITDA improving to 6.7x/6.6x. Although capex remains substantial and continues to keep debt elevated, the stronger operating performance has provided a cushion. These factors, combined with KEPCO’s critical policy function and the strong likelihood of government support, underpin its solid credit standing.
Business Description
AS OF 07 Jul 2025- KEPCO is a quasi-sovereign credit and the sole integrated electric utilities company in Korea. It is majority-owned by the Korean government, which maintains at least a 51% stake as stipulated by law, with shares listed on both the Korea Exchange and the New York Stock Exchange.
- It is South Korea’s leading electricity utility, holding an effective monopoly over the country’s transmission and distribution networks and acting as the primary power generator. Through its six wholly owned generation subsidiaries - Korea Hydro & Nuclear Power (KHNP), Korea South-East Power (KOEN), Korea Western Power (KOWEPO), Korea East-West Power (EWP), Korea Midland Power (KOMIPO), and Korea Southern Power (KOSPO), KEPCO supplies around two-thirds of Korea’s electricity and manages more than half of the nation’s total power capacity. KHNP is the sole nuclear power generation company in Korea. On a consolidated basis, electricity transmission & distribution accounts for over 95% of KEPCO's annual revenues.
Risk & Catalysts
AS OF 07 Jul 2025- Key risks to KEPCO’s standalone credit profile include: 1) higher-than-expected fuel costs due to continued increase of international prices of coal, natural gas and oil as well as a significant depreciation of the KRW against the $; (2) inability to pass through high fuel costs due to insufficient or delayed tariff adjustment; and (3) higher-than-expected capex and investments related to Korea’s green transition. However, we do not foresee these risks to materially impair KEPCO’s ability to access funding, credit rating and overall credit profile as we expect KEPCO to continue receiving an extremely high level of support from the Korean government.
- KEPCO’s exposure to nuclear power operations and coal-fired power generation may post ESG concerns for investors with an ESG mandate. The company also faces challenges from Korea’s push for decarbonization, with tightening environmental regulations and a planned reduction in coal-fired power potentially increasing compliance costs and execution risks during the energy transition.
Key Metric
AS OF 07 Jul 2025| KRW bn | FY20 | FY21 | FY22 | FY23 | FY24 |
|---|---|---|---|---|---|
| Debt to Book Cap | 55.3% | 60.1% | 76.9% | 80.5% | 78.9% |
| Net Debt to Book Cap | 54.1% | 58.7% | 75.3% | 78.4% | 77.8% |
| Debt/Total Equity | 1.2x | 1.5x | 3.3x | 4.1x | 3.7x |
| Debt/Total Assets | 43.0% | 46.7% | 59.6% | 64.3% | 62.6% |
| Gross Leverage | 5.6x | 16.5x | -6.9x | 18.2x | 6.9x |
| Net Leverage | 5.5x | 16.1x | -6.8x | 17.7x | 6.8x |
| Interest Coverage | 7.8x | 3.1x | -7.2x | 1.9x | 4.8x |
| EBITDA Margin | 26.5% | 9.8% | (28.3%) | 9.6% | 23.9% |
CreditSight View Comment
AS OF 05 Nov 2025KEPCO is the sole electricity distributor and transmitter in South Korea, undertaking an irreplaceable policy role. Its credit profile is underpinned by excellent government support which allows the company to enjoy strong access to the onshore and offshore funding channels that mitigate its elevated leverage and insufficient cash coverage for short-term debt. KEPCO is in the process of implementing a financial improvement plan and aim to restore its financial soundness by 2027. Its $ bonds is attractive on a relative value basis compared to lower rated Asian A rated corporate, including the Chinese central SOEs.
Recommendation Reviewed: November 05, 2025
Recommendation Changed: July 24, 2023
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Fundamental View
AS OF 27 Jun 2025KORGAS is Korea’s sole integrated gas utility company and a quasi-sovereign credit, maintaining an effective monopoly over E&P, procurement, storage and production, transmission, and wholesale distribution of natural gas.
Its credit profile is supported by its dominant position in the natural gas and hydrogen utility market, as well as strong government support, which partially offsets the credit impact of delayed and incomplete pass-through of gas procurement costs during periods of natural gas price surges, such as in FY22.
We expect its credit profile to improve in FY25, aided by stabilizing oil and LNG prices, improved tariff adjustments, and ongoing government backing, which should partially mitigate concerns related to its larger planned capex.
Business Description
AS OF 27 Jun 2025- KORGAS is 54.6% owned directly/indirectly by the Korean government (Central Government 26.2%, KEPCO 20.5%, Local Government 7.9%). It is Korea's only fully integrated gas utility, holding an effective monopoly over E&P, procurement, storage, transmission, and wholesale distribution of natural gas. KORGAS plays a key role in Korea’s energy transition, with plans to increase LNG generation capacity by 56% by 2036 from 2022. KORGAS was also designated as Korea’s sole hydrogen distribution agency in 2020.
- The Korean natural gas sector is split into wholesale and retail segments. KORGAS is the exclusive wholesaler, while city gas companies manage retail supply via regional networks. In FY24, 46% of KORGAS's gas sales were to domestic LNG-fired power generation companies (gencos, including KEPCO subsidiaries and IPPs), with the remaining 54% sold to city gas and heating companies.
- KORGAS's operations are heavily regulated, with government oversight on tariffs, investments, and expansion. Besides domestic LNG, KORGAS owns overseas E&P assets to enhance energy security. In line with government policy, KORGAS is investing in hydrogen infrastructure and renewables, using its gas network and expertise to support Korea’s clean energy transition.
Risk & Catalysts
AS OF 27 Jun 2025Risks: (1) delayed tariff adjustments; (2) larger-than-expected debt-funded capex; (3) domestic regulatory and policy risks; (4) overseas E&P volatility, including political, operational and market risks; (5) depreciation of the KRW against the USD; (6) liquidity shortfalls; (7) asset impairment risks due to decline in global oil and gas prices.
Catalysts: (1) stronger-than-expected government support; (2) tariff increases; (3) stabilizing fuel prices; (4) hydrogen and green energy initiatives; (5) regulated city gas operations with a formula-based cost pass-through system.
Key Metric
AS OF 27 Jun 2025| KRW bn | FY20 | FY21 | FY22 | FY23 | FY24 |
|---|---|---|---|---|---|
| Debt to Book Cap | 75.7% | 75.8% | 81.3% | 80.7% | 79.0% |
| Net Debt to Book Cap | 74.6% | 74.2% | 79.8% | 79.1% | 77.2% |
| Debt/Equity | 312.4% | 313.3% | 434.4% | 418.0% | 377.0% |
| Gross Leverage | 9.4x | 9.1x | 9.9x | 11.6x | 8.0x |
| Net Leverage | 9.3x | 8.9x | 9.7x | 11.4x | 7.8x |
| Interest Coverage | 3.4x | 4.8x | 5.1x | 2.2x | 3.4x |
| EBITDA Margin | 12.3% | 11.4% | 8.8% | 8.0% | 13.3% |
CreditSight View Comment
AS OF 04 Sep 2025We maintain our O/P recommendation on KORGAS. Its credit profile is supported by its essential policy role as South Korea’s only vertically integrated natural gas utility and a key energy supplier, which results in strong government backing, a dominant market position, and excellent funding access—offsetting its high leverage. We anticipate its credit profile will strengthen in FY25, driven by stable oil and LNG prices, improved tariff adjustments, and continued government support, which should help address concerns over higher planned capex. We find KORGAS attractive relative to lower-rated Chinese SOEs, BBB-rated low beta Korean corporates, and other Korean quasi-sovereigns.
Recommendation Reviewed: September 04, 2025
Recommendation Changed: June 27, 2023
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Fundamental View
AS OF 26 Jun 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 F23-24. Its Australian mortgage book has also shown strong but sensible growth.
Business Description
AS OF 26 Jun 2025- Macquarie grew out of the Australian business of Hill Samuel Australia, commencing 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 announced the sale of its public AM business in the US and Europe to Nomura.
- MAM has AUM of ~A$941 bn as of FY25, mostly in "traditional" funds management but also including its specialist infrastructure and real assets funds.
Risk & Catalysts
AS OF 26 Jun 2025Macquarie has sizable exposures 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. So far it has managed this risk well.
As a relatively small group operating mainly in wholesale markets, it is vulnerable to a liquidity freeze, but it mitigates this through running a well-matched and liquid balance sheet.
It is a global leader in infrastructure investments and is well positioned for the green transition. It has been a strong beneficiary of volatility in commodity markets, a testament to its risk management capabilities.
Its banking unit, MBL, has been subject to enforcement action in Apr-21 by APRA over the incorrect treatment of some intra-group funding arrangements resulting in a A$500 mn operational risk overlay being applied as well as LCR and NSFR add-ons.
Key Metric
AS OF 26 Jun 2025| AUD mn | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Operating Income | 13,298 | 17,833 | 19,576 | 17,071 | 18,130 |
| Cost/Income | 66.7% | 60.5% | 62.0% | 71.4% | 70.5% |
| Net Profit | 3,015 | 4,706 | 5,182 | 3,522 | 3,715 |
| Return on Equity | 14.3% | 18.7% | 16.9% | 10.8% | 11.2% |
| Total Impairments/Op Profit | 11.8% | 7.2% | 6.1% | (7.4%) | 6.0% |
| Annuity Business Profit Contribution | 46.7% | 42.6% | 34.2% | 36.5% | 43.6% |
| MBL CET1 Ratio (APRA) | 12.6% | 11.5% | 13.7% | 13.6% | 12.8% |
| MBL Liquidity Coverage Ratio | 174% | 175% | 214% | 191% | 175% |
| MBL Net Stable Funding Ratio | 115% | 121% | 124% | 115% | 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.Pertamina
- Sector: Energy
- Sub Sector: Oil and Gas
- Region: Indonesia
- Bond: PERTIJ 3.1 30
- Indicative Yield-to-Maturity (YTM): 5.339%
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Fundamental View
AS OF 18 Jun 2025- Pertamina enjoys very strong linkages with the Government of Indonesia (GoI) and is assured of extraordinary support in times of distress.
- Lower expected Brent crude prices YoY could weigh on its upstream margins and overall EBITDA (given the upstream business accounts for >65% of consolidated EBITDA).
- Although leverage typically remains low, Pertamina incurs large capex spending that could pressure its free cash flow generation.
- High persisting dividend outflows could restrain free cash flow improvements.
Business Description
AS OF 18 Jun 2025- Pertamina is involved in a broad range of upstream and downstream oil, gas, geothermal and petrochemical operations.
- In the upstream sector, it engages in the exploration, development and production and supply of crude oil, natural gas and geothermal energy.
- As for the downstream sector, the company carries out refining, marketing and distribution of oil, gas, fuel products and petrochemical and other non-fuel products.
- As of 31 December 2024, its total proved oil reserves stood at ~1,394 mmbbl (mn barrels of oil) and gas reserves stood at ~1,058 mmboe (mn barrels of oil equivalent). Its average daily oil and gas production was ~1,045,000 boe per day in FY24. The company owns and operates 6 refineries in Indonesia.
- Under the Public Service Obligation (PSO) mandate, Pertamina is responsible for providing certain grades of motor gasoline, automotive diesel oil, kerosene and LPG at subsidized prices. The subsidized retail price is often times lower than the cost of production, creating a shortfall, for which it receives reimbursements from the GoI.
Risk & Catalysts
AS OF 18 Jun 2025- Pertamina’s profitability is materially affected by volatility in oil & gas prices. Prolonged periods of low oil prices could hurt upstream earnings that form the bulk of overall EBITDA (>65%).
- As retail prices of certain fuel products are regulated, realized prices may be below its cost of sales.
- Pertamina has to initially absorb the shortfall between the regulated retail price and the cost of producing and distributing certain fuel products. If the price of crude oil exceeds the price ceiling set by the GoI, the company may receive insufficient subsidy reimbursements.
- Capex typically remains elevated and which pressurizes its free cash flow generation.
Key Metric
AS OF 18 Jun 2025| $ mn | FY20 | FY21 | FY22 | FY23 | FY24 |
|---|---|---|---|---|---|
| Debt to Book Cap | 38.5% | 41.2% | 42.1% | 37.6% | 34.9% |
| Net Debt to Book Cap | 18.9% | 21.9% | 12.5% | 8.5% | 12.3% |
| Debt/Total Equity | 62.5% | 70.0% | 72.7% | 60.4% | 53.6% |
| Debt/Total Assets | 28.3% | 29.9% | 30.8% | 27.4% | 26.3% |
| Gross Leverage | 2.4x | 2.5x | 1.9x | 1.9x | 2.2x |
| Net Leverage | 1.2x | 1.3x | 0.6x | 0.4x | 0.8x |
| Interest Coverage | 7.8x | 8.7x | 11.2x | 8.9x | 7.5x |
| EBITDA Margin | 19.9% | 16.0% | 16.7% | 17.7% | 14.3% |
CreditSight View Comment
AS OF 18 Jun 2025We maintain our Market perform recommendation on Pertamina at the issuer level and remove our preference for Pertamina’s 2041-2048 as our preference has played out, with the bonds tightening 19-24 bp since we expressed our preference for these bonds. We think current spread levels are fair given the downside risk of the O&G sector’s cyclicality and persisting policy uncertainty from Indonesia’s new sovereign wealth fund Danantara. That said, we continue to view Pertamina as a safe-haven pick and remain comfortable with Pertamina’s full state-ownership, timely fuel subsidy and compensation from the Indonesian government, positive free cash flow generation, robust credit metrics and our expectation for Pertamina’s strategic policy role to sustain even amidst macro headwinds and Danantara.
Recommendation Reviewed: June 18, 2025
Recommendation Changed: May 16, 2023
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Search topics about wealth insights and investments.Tencent
- Sector: Technology Media and Telecommunications
- Sub Sector: Technology
- Country: China
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Fundamental View
AS OF 10 Jun 2025We maintain our Outperform recommendation on Tencent post its decent 1Q25 results; topline accelerated, EBITDA margin expanded, free operating cash flow remained robust, and debt metrics remained modest. We expect Tencent’s topline growth to marginally accelerate in FY25, supported by its advertising, domestic/international gaming, fintech and cloud segments; we expect EBITDA margin to marginally improve as its better revenue mix offset the increased R&D spending for AI development; we expect FOCF to expand, and debt metrics to improve from 1Q25. We continue viewing Tencent as a core holding in China and Asia IG credits. We prefer its 2029/2041 notes for spread pick up against Chinese SOEs. We think Tencent is more attractive compared to BIDU/JD and more defensive that BBB China tech.
Business Description
AS OF 10 Jun 2025- Founded in November 1998, Tencent is a leading provider of Internet value added services in China. Since its establishment, Tencent has ventured into instant messaging, social networking, online payments, digital entertainment, and PC and smartphone gaming. Most recently, it has also forayed into high-tech areas such as artificial intelligence, and cloud computing.
- Tencent's leading Internet platforms in China include Weixin/WeChat (online messaging), QQ Instant Messenger (online messaging), Tencent Games (gaming), Tencent Video/Weixin Video Accounts (video platforms), WeChat Pay (payments), and Tencent Cloud. The combined monthly average users (MAU) of Weixin and Wechat reached 1.40 bn as of 31 March 2025.
- In 4Q24, 46% of revenues came from Value Added Services (which consist of Domestic Games, International Games, and Social Networks), 33% came from FinTech and Business Services (e.g. commercial payments and cloud), 19% from Online Advertising and 2% from Others.
- Tencent is currently primarily listed on the Hong Kong Stock Exchange, with a market capitalization of HKD 4.7 tn as of 10 June 2025.
Risk & Catalysts
AS OF 10 Jun 2025While Chinese regulators have adopted a more friendly stance towards tech companies, any regulatory clampdowns abroad and domestically (e.g. antitrust rules, data security, personal information protection laws) may affect Tencent’s business. Tencent’s gaming, music streaming, and online payment units are among those that have come under regulatory scrutiny in the past.
Tencent uses variable interest entities (VIEs) to circumvent China’s restrictions on foreign ownership of Internet Content Providers, which poses regulatory risks. Specifically, VIE transactions involving “change in control” will be subject to antitrust regulatory processes.
US-China tension may escalate under the new Trump Administration, including additional chip sanctions, which may result in higher volatility. Failing to secure a stable supply of advanced AI chips and/(or) find domestic alternatives could weigh on the long-term AI development of Tencent against international peers.
Key Metric
AS OF 10 Jun 2025| RMB bn | FY21 | FY22 | FY23 | FY24 | LTM 1Q25 |
|---|---|---|---|---|---|
| Debt to Book Cap | 27.0% | 31.4% | 29.8% | 25.4% | 26.5% |
| Net Debt to Book Cap | 6.0% | 8.5% | 1.0% | 2.3% | 4.4% |
| Debt/Total Equity | 36.9% | 45.9% | 42.5% | 34.0% | 36.0% |
| Debt/Total Assets | 20.1% | 22.8% | 23.5% | 20.1% | 21.1% |
| Gross Leverage | 1.7x | 1.9x | 1.6x | 1.3x | 1.4x |
| Net Leverage | 0.4x | 0.5x | 0.1x | 0.1x | 0.2x |
| Interest Coverage | 24.7x | 19.0x | 19.9x | 22.5x | 23.0x |
| EBITDA Margin | 34.9% | 34.3% | 38.9% | 42.4% | 43.2% |
CreditSight View Comment
AS OF 14 Nov 2025We maintain our O/P recommendation on Tencent. In 3Q25, revenues accelerated and were ahead of expectations, EBITDA margin expanded on an improved revenue mix, FOCF remained robust, debt metrics improved. We view Tencent as a core holding in China and Asia IG credits, and it is our preferred duration play. While valuations of Tencent is less compelling compared to YE24, its longer duration bonds still offer ~20 bp of spread pick up against Chinese SOEs of similar tenors. We like Tencent’s strong and improving credit outlook compared to its Chinese tech peers, rock solid balance sheet and robust free operating cash flow. We prefer its 2041 bond which offer the highest 20-35 bp spread pick up against Asia A corporate and Chinese SOEs
Recommendation Reviewed: November 14, 2025
Recommendation Changed: August 18, 2022
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Fundamental View
AS OF 05 Jun 2025We expect the credit profile of Sinopec, which is one of the three Chinese national oil companies (NOCs) to continue to be underpinned by its strategic role in China’s energy security and the resulting strong government support.
We expect Sinopec’s standalone credit profile to remain supported in FY24 by resilient refined oil demand and improving demand for chemical products as industrial activities pick up and the destocking trend ends.
To note, we use the financials of HKEx listed Sinopec Corp (386.HK) as a proxy for the credit profile of its parent, the obligor of the outstanding $ bonds (BBG: SINOPE).
Business Description
AS OF 05 Jun 2025- Sinopec Group is a Chinese integrated oil and gas (O&G) company and is one of the largest globally & domestically. In 3Q24, 56.4% of Sinopec Corp' external revenues came from marketing and distribution (i.e. retail and direct sales of refined oil), 13.9% from chemicals, 5.1% from refining, and 5.0% from E&P. Corporate and others segment accounted for the remaining 19.6% of sales revenue, consisting of import and export business, R&D and managerial activities.
- The refining segment purchases crude oil from third parties as well as the E&P segment of the company, and processes crude oil into refined petroleum product. Most of the gasoline, diesel and kerosene are sold internally to the marketing and distribution segment of the company; part of the chemical feedstock is sold internally to the chemical segment, and the other refined petroleum products are sold externally to both domestic and overseas customers. The marketing and distribution segment purchases refined oil products from the refining segment and third parties, and mainly distributes to domestic customers via its wholesale and retail networks.
- In 9M24, Sinopec's total oil and gas output was 386.06 mn barrels of oil equivalent, up 2.6% YoY; this included 190.42/20.87 mmbbls (+1.2%/-6.6%) of domestically produced/overseas crude oil, as well as 1,084 bcf of natural gas (+5.6% YoY). The average realized price of its crude oil and natural gas was $76.6/bbl (+1.1% YoY)and $7.48/thousand cubit feet (+5.4% YoY)respectively.
Risk & Catalysts
AS OF 05 Jun 2025Risks: Lower-than-expected domestic sales of refined oil and chemical products due to a severe economic downturn, higher-than-expected crude oil and gas feedstock costs resulted from geopolitical tensions, elevated inventory losses due to tumbling oil & gas prices, and large capex overrun result in a weaker standalone credit profile. However, we expect the strong government support to offset these downside risks. US sanction related headline risks due to US-China tension and other geopolitical risks.
Catalysts: inflow into China $ bonds as a result of improving China macro outlook and US-China relationship; stronger-than-expected recovery in chemical product demand.
Key Metric
AS OF 05 Jun 2025| RMB bn | FY20 | FY21 | FY22 | FY23 | 3Q24 |
|---|---|---|---|---|---|
| Total Debt/Capitalization | 25.3% | 25.6% | 27.5% | 31.5% | 33.1% |
| Net Debt/Capitalization | 9.4% | 7.6% | 16.3% | 19.8% | 21.4% |
| Total Debt/Total Equity | 33.8% | 34.5% | 38.0% | 46.1% | 49.4% |
| Total Debt/Total Assets | 17.2% | 16.7% | 18.3% | 21.7% | 22.9% |
| Total Debt/EBITDA | 1.5x | 1.2x | 1.5x | 2.0x | 2.3x |
| Net Debt/EBITDA | 0.6x | 0.4x | 0.9x | 1.3x | 1.5x |
| EBITDA/Gross Interest | 16.8x | 20.1x | 16.1x | 14.5x | 14.2x |
| EBITDA Margin | 9.5% | 9.4% | 7.0% | 6.8% | 5.9% |
CreditSight View Comment
AS OF 05 Jun 2025We affirm our Market perform recommendation on Sinopec. A-rated Chinese state-owned enterprises (SOEs), including Sinopec are trading tight due to a lack of new supply and as investors fly to quality amid macro uncertainties in China. We continue to prefer AA-rated Korean quasi-sovereign names for safe carry (like KOROIL, KORGAS, KEPCO) and higher-beta Chinese SOEs for spread pickup.
Recommendation Reviewed: June 05, 2025
Recommendation Changed: May 03, 2021
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