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Archives: CreditSights Issuer List
Republic of Korea
- Bond: KOREA 5.625 25
- Indicative Yield-to-Maturity (YTM): 4.21%
- Credit Rating : ( Aa2 / AA / AA- )
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Country Overview
AS OF 28 May 2025- Highly Developed Mixed Economy: South Korea boasts a highly developed mixed economy, ranking as the 13th largest globally by nominal GDP and the 4th largest in Asia as of 2025, with a nominal GDP of approximately USD 1.950 trillion.
- Rapid Economic Development: The nation experienced a remarkable economic transformation known as the “Miracle on the Han River”, evolving from an underdeveloped country to a high-income, developed nation in a few decades.
- Global Leader in Key Industries: South Korea is a global leader in sectors such as electronics, telecommunications, automobile production, chemicals, shipbuilding, and steel, with significant investments in research and development (around 4.93% of GDP).
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Fundamental View
AS OF 28 May 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 28 May 2025- Citigroup ranks as the 3rd largest U.S. bank by total assets ($2.57 tn) at 1Q25 and 3rd largest by Total Equity ($213 bn).
- Citi is 4th in terms of U.S. deposits with approximately $743 bn as of 1Q25 across 661 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 is in the process of exiting 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 28 May 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.
While not as severe as a Wells-type situation, Citi’s regulatory mishaps introduce risks should the bank fail to show improvement in internal controls, or if another major risk management failure crops up. Our base case: Citi will be able to satisfy regulators and end up with improved infrastructure, though it will likely be a multi-year process with resultant upward cost pressures.
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 to the degree tariff policies drive USD appreciation.
Key Metric
AS OF 28 May 2025| $ mn | FY21 | FY22 | FY23 | FY24 | LTM 1Q25 |
|---|---|---|---|---|---|
| ROAE (annual) | 10.9% | 7.5% | 4.5% | 6.1% | 6.4% |
| ROAA (annual) | 0.92% | 0.61% | 0.38% | 0.51% | 0.53% |
| PPNR / Avg. Assets | 1.02% | 0.97% | 3.93% | 3.56% | 3.86% |
| Efficiency Ratio | 68% | 67% | 272% | n/m | n/m |
| Net Interest Margin (Annual) | 1.94% | 2.20% | 2.37% | 2.29% | 2.29% |
| Net charge-offs (LTM) / Loans | 0.70% | 0.55% | 0.95% | 1.29% | 1.31% |
| Common Dividend Payout | 19% | 27% | 130% | n/m | n/m |
| CET1 Ratio | 12.3% | 13.0% | 13.4% | 13.6% | 13.4% |
| Supplementary Leverage Ratio (SLR) | 5.7% | 5.8% | 5.8% | 5.9% | 5.8% |
| Liquidity Coverage Ratio (LCR) | 115% | 118% | 116% | 117% | 117% |
CreditSight View Comment
AS OF 25 Sep 2025Citi’s Underperform recommendation is driven by valuation as given tight spreads across the sector, we have a general preference for higher-quality names within the GSIB space. However we’re comfortable with Citi as a credit and still believe in Fraser’s transformation efforts. In 2Q25 tariff-driven uncertainty proved to be a positive driver of activity in a number of lines. Transitional efforts including the planned IPO of Banamex and profitability improvement remain areas to watch.
Recommendation Reviewed: September 25, 2025
Recommendation Changed: December 05, 2024
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Fundamental View
AS OF 28 May 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.
Goldman’s results have been weighed in recent years by costs associated with exiting the unsuccessful foray into various consumer banking businesses; such costs are largely in the rearview mirror. Wealth and Asset Management are now the most likely areas of growth in the coming years, where Goldman can leverage its strengths in HNW and alternative asset management.
Business Description
AS OF 28 May 2025- Goldman Sachs is now the fifth largest bank holding company in the U.S. with approximately $1.76 tn in assets as of 1Q25 and a market capitalization of $175.4 bn as of May 23rd, 2025.
- Goldman Sachs presents its activities through three business segments: Global Banking & Markets, Asset & Wealth Management, and Platform Solutions.
- Goldman's historical 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 streams amid a sluggish capital market environment. 5
Risk & Catalysts
AS OF 28 May 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, 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, most likely through 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 28 May 2025| $ mn | FY21 | FY22 | FY23 | FY24 | 1Q25 |
|---|---|---|---|---|---|
| ROAE (annual) | 21.3% | 9.7% | 7.3% | 12.0% | 12.3% |
| ROAA (annual) | 1.5% | 0.7% | 0.5% | 0.8% | 0.9% |
| PPNR / Avg. Assets | 1.86% | 1.08% | 3.29% | 3.92% | 1.16% |
| Efficiency Ratio | 54% | 65% | 282% | 266% | 63% |
| Net charge-offs (LTM) / Loans | 0.19% | 0.30% | 0.68% | 0.61% | 0.61% |
| Common Dividend Payout | 10.6% | 28.4% | 158.9% | 129.4% | 25.9% |
| CET1 Ratio | 13.6% | 15.0% | 14.4% | 15.0% | 14.8% |
| Supplementary Leverage Ratio (SLR) | 5.5% | 5.8% | 5.5% | 5.5% | 5.5% |
| Liquidity Coverage Ratio (LCR) | 122% | 129% | 128% | 126% | 126% |
CreditSight View Comment
AS OF 17 Jul 2025We maintain our Market perform recommendation for Goldman Sachs; we remain quite comfortable with the name fundamentally but see better value at JPMorgan and Wells Fargo among money center banks, particularly in the context of our shift to a more defensive stance across the sector. Goldman should be back to a normal pace of issuance so technicals should not be quite as much of a tailwind going forward as they had been in 2023 and early 2024, though the fundamental picture continues to improve with improved capital markets conditions as well as reduced drag from exited businesses. Market conditions thus far have aligned well with Goldman’s strengths in trading, and investment banking is showing signs of picking up as advisory and ECM improved in 2Q.
Recommendation Reviewed: July 17, 2025
Recommendation Changed: January 12, 2022
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Fundamental View
AS OF 28 May 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 28 May 2025- JPMorgan ranks as the largest U.S. bank by total assets ($4.4 tn at 1Q25) and deposits ($2.49 tn at 1Q25).
- 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 28 May 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, with Jennifer Piepszak taking herself out of the running and moving into the COO seat, with remaining candidates including Marianne Lake (CEO of Consumer), Troy Rohrbaugh (CEO of Commercial/Investment Bank), and Mary Erdoes (CEO of Asset/Wealth Management).
The sector remains exposed to reputational, legislative/administrative risk, and cyber threats, although the significant tech spend over the past few years should (theoretically) result in a stronger position for JPM to manage the security threats.
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 28 May 2025| $ mn | FY21 | FY22 | FY23 | FY24 | 1Q25 |
|---|---|---|---|---|---|
| ROAE (annual) | 17.0% | 13.2% | 16.0% | 17.4% | 17.5% |
| ROAA (annual) | 1.3% | 1.0% | 1.3% | 1.4% | 1.4% |
| PPNR / Avg. Assets | 1.32% | 1.39% | 7.06% | n/m | 2.08% |
| Efficiency Ratio | 59% | 58% | 214% | n/m | 53% |
| Net Interest Margin (Annual) | 1.63% | 2.00% | 2.70% | 2.63% | 2.60% |
| Net charge-offs (LTM) / Loans | 0.26% | 0.25% | 0.48% | 0.63% | 0.65% |
| Common Dividend Payout | 24% | 32% | 101% | n/m | 24% |
| CET1 Ratio | 13.1% | 13.2% | 15.0% | 15.7% | 15.4% |
| Supplementary Leverage Ratio (SLR) | 5.4% | 5.6% | 6.1% | 6.1% | 6.0% |
| Liquidity Coverage Ratio (LCR) | 110% | 110% | 113% | 113% | 113% |
CreditSight View Comment
AS OF 21 Jul 2025Our Outperform view on JPM is all about defensive value: rightfully perceived as the industry bellwether, spread differentials among Big 6 peers have collapsed with investors now able to rotate into highest quality with only a nominal spread sacrifice. Defensive value has become more important given extreme policy uncertainty and we continue to like the value in JPM after recent widening across IG and the bank peer group essentially round-tripped back to early 2025 levels. Core credit strengths including capitalization may slide with the BISIII softening and delay, but from an extremely strong starting point.
Recommendation Reviewed: July 21, 2025
Recommendation Changed: December 05, 2024
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Search topics about wealth insights and investments.San Miguel Corporation
- Sector: Manufacturing
- Sub Sector: Diversified Conglomerates
- Country: Philippines
- Region: Philippines
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Fundamental View
AS OF 27 May 2025SMC’s FY24 earnings and credit metrics EBITDA improved YoY as we had expected from resilient broad-based demand recovery, lower thermal coal input costs, new project contributions, and good cost control measures.
We are comfortable with SMC’s large diversified operations and dominant market share in key sectors, which could outweigh its persisting high airport and infrastructure capex.
We see low non-call risk for the c.2025 and c.2026 perps in the SMC complex, given SMC’s strong ability and willingness to repay earlier perps at SMC GP, good access to diverse funding channels, and deep reputational concerns upon a non-call.
Business Description
AS OF 27 May 2025- SMC is a massive conglomerate in the Philippines with business interests across six business segments: Food & Beverage (F&B), fuel refining and retailing, power, packaging, infrastructure, and others.
- Its F&B business is operated through San Miguel Food & Beverage, the largest F&B company in the Philippines with three main divisions: Beer and Non-alcoholic Beverage (including beers and juices), Spirits (gin and Chinese wine), and Food (including packaged foods, animal feeds, poultry and fresh meats).
- SMC’s fuel refining and retailing business is operated through Petron Corporation (~68% stake), the largest oil refining and retailing company in the Philippines, and one of the largest in Malaysia. Petron has a total refining capacity of ~268k barrels/day.
- SMC’s power business is operated through SMC Global Power Holdings (SMC GP, 100% stake), one of the largest power generating companies in the Philippines. It maintains a diversified portfolio across coal (62%), natural gas (26%), and renewable energy (12%) sources.
- Through its packaging business, it manufactures glass containers, plastic crates, pellets, bottles and caps, aluminium cans, and other types of packaging products.
- It operates its Infrastructure business through San Miguel Holdings Corp (SMHC), in which it holds a 100% stake. It currently operates ~190 km of toll roads in the country, connecting high-traffic, arterial routes in Luzon.
Risk & Catalysts
AS OF 27 May 2025SMC’s revenues are concentrated in the Philippines (~80%), which poses geographical concentration risk.
SMC incurs significant capex, particularly in its power/energy and infrastructure businesses. In October 2020, SMC began construction of the mega New Manila International Airport (requires ~PHP 750 bn of capex spread over 5-7 years). This could keep SMC’s credit metrics elevated and free cash flows in negative territory.
As a holding company, SMC is reliant on dividend upstreaming from its operating subsidiaries to service its debt, which can be difficult should the operating subsidiaries face cash flow difficulties.
SMC operates in the businesses of thermal power generation and fuel refining, which may be looked at unfavourably by some ESG-focused investors.
Key Metric
AS OF 27 May 2025| PHP bn | FY22 | FY23 | FY24 | 1Q24 | 1Q25 |
|---|---|---|---|---|---|
| Debt to Book Cap | 72.3% | 71.6% | 73.0% | 72.0% | 71.0% |
| Net Debt to Book Cap | 58.5% | 60.4% | 61.2% | 60.6% | 58.0% |
| Debt/Total Equity | 261.3% | 251.9% | 269.9% | 256.7% | 244.8% |
| Debt/Total Assets | 69.8% | 68.1% | 68.2% | 68.0% | 68.4% |
| Gross Leverage | 9.1x | 8.4x | 8.3x | 8.2x | 7.9x |
| Net Leverage | 7.4x | 7.1x | 7.0x | 6.9x | 6.5x |
| Interest Coverage | 2.8x | 2.1x | 2.1x | 2.1x | 2.1x |
| EBITDA Margin | 12.2% | 13.8% | 14.0% | 12.5% | 15.6% |
CreditSight View Comment
AS OF 23 Jul 2025We have a Market perform recommendation on SMC and its sole c.Jul-25 $ perp; we see limited extension risk for SMC’s perp, yet we don’t see much price upside from current levels. SMC’s c.Jul-2025 trades close to par and fairly to Ayala Corp’s c.Sep-2026 in our view. We like SMC’s dominant market position in multiple sectors, long operating track record and diversified operations. Yet it incurs sizable airport and infrastructure capex that would likely keep its credit metrics elevated and free cash flows negative. Meanwhile, we remain watchful of SMC’s ability to support SMC GP past 2025.
Recommendation Reviewed: July 23, 2025
Recommendation Changed: April 05, 2023
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Fundamental View
AS OF 19 May 2025BNP’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 fairly resilient, 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.
Capital ratios are run tightly considering BNP’s balance sheet size, although this is in the context of its liquid and well-managed risk profile.
Business Description
AS OF 19 May 2025- 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 19 May 2025BNP Paribas remains the subject of various claims concerning the Madoff matter; amongst other claims. Litigation provisions on the balance sheet stood at €841 mn at 30 June 2024. BNP says the latest claims against it stand at $1.1 bn as of June 2024.
If there was a negative rating action on the sovereign via an outlook change or notch downgrade, 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.
There were signs of modest asset quality deterioration in 1Q25, although the bank has not revised its guidance, which targets cost of risk of 40 bp in 2025 and 2026.
Key Metric
AS OF 19 May 2025| mn | Y21 | Y22 | Y23 | Y24 | 1Q25 |
|---|---|---|---|---|---|
| Return On Equity | 8.2% | 8.2% | 9.0% | 9.3% | 9.1% |
| Total Revenues Margin | 1.8% | 1.7% | 1.7% | 1.8% | 1.9% |
| Cost/Income | 67.3% | 60.7% | 62.6% | 61.8% | 63.7% |
| CET1 Ratio (Transitional) | 12.9% | 12.3% | 13.2% | 12.9% | 12.4% |
| CET1 Ratio (Fully-Loaded) | 12.9% | 12.3% | 13.2% | 12.9% | 12.4% |
| Leverage Ratio (Fully-Loaded) | 4.1% | 4.4% | 4.6% | 4.6% | 4.4% |
| Liquidity Coverage Ratio | 143.0% | 129.0% | 148.0% | 137.0% | 133.0% |
| Impaired Loans (Gross)/Total Loans | 3.3% | 2.9% | 2.9% | 2.8% | n/a |
CreditSight View Comment
AS OF 16 Sep 2025BNP 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. It has extensive operations in Italy via its subsidiary BNL. 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 2027. 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.
Recommendation Reviewed: September 16, 2025
Recommendation Changed: October 30, 2018
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Search topics about wealth insights and investments.UnionBank of the Philippines
- Sector: Financial Services
- Sub Sector: Banks
- Region: Philippines
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Fundamental View
AS OF 19 May 2025The bank has historically generated higher returns than peers, but it geared its focus significantly towards the retail segment through acquiring Citi’s Philippine retail portfolio in 2022 and organic growth, which brought retail loans to more than half the total book.
Returns have suffered despite the good boost to core revenues, as asset quality deterioration from the riskier growth direction resulted in high credit costs which we have forewarned. Continued rounds of capital infusions from shareholders have thus been required. The reserve cover is maintained relatively thin.
Business Description
AS OF 19 May 2025- UnionBank of the Philippines was incorporated in 1968, and listed on the Philippine Stock Exchange in June 1992. Principal shareholders are Aboitiz Equity Ventures (49.66%), Insular Life (16%), & Social Security System (18%).
- UBP undertook mergers with International Corporate Bank in 1994 and International Exchange Bank in 2006. City Savings Bank (a thrift bank) was purchased in Jan 2013. City Savings received merger approval with PR Savings (a bank engaged in motorcycle, agri-machinery, & teachers' salary loans) in Dec 2018 from the BSP. It acquired the Citi Philippines retail franchise in 2022.
- The loan book is broadly split 38% wholesale loans and 62% retail loans (comprising 34% credit cards, 21% mortgages and 7% salary loans at the parent, 36% teachers loans, salary loans and motorcycle loans by the thrift bank subsidiary, City Savings Bank, and 1% UnionDigital) at Mar-25.
Risk & Catalysts
AS OF 19 May 2025Any rating downgrade of the Philippine sovereign or reduction of shareholding by Aboitiz Equity Ventures would negatively impact UBP.
The bank’s aggressive retail expansion has improved the NIM, but negatively impacted overall profitability because of high credit costs (particularly since 2H23) which we have forewarned. We continue to dislike its focus on riskier retail given the already large loan book exposure. It is now focusing on lower risk, shorter term loans at UnionDigital, but the improvement in credit costs have been slow to come through given fallout from higher risk taking in other segments.
The bank however benefits from good shareholder support; it successfully completed a third stock rights offering of PHP 10 bn in 2Q24 (2023: PHP 12 bn; 2022: PHP 40 bn) to shore up capital. Lower opex from 2Q24 onwards is also aiding the bottomline.
Key Metric
AS OF 19 May 2025| PHP mn | FY21 | FY22 | FY23 | FY24 | 1Q25 |
|---|---|---|---|---|---|
| Net Interest Margin | 4.60% | 4.80% | 5.50% | 6.00% | 6.30% |
| Reported ROA (Cumulative) | 1.6% | 1.3% | 0.8% | 1.1% | 0.5% |
| Reported ROE (Cumulative) | 11.5% | 9.7% | 5.6% | 6.4% | 2.9% |
| PPP ROA | 2.59% | 2.17% | 2.31% | 3.08% | 2.74% |
| CET1 Ratio | 16.3% | 11.3% | 13.9% | 15.6% | 14.9% |
| Total Equity/Total Assets | 13.5% | 13.6% | 15.3% | 17.1% | 16.8% |
| Gross NPL Ratio | 5.00% | 4.80% | 6.27% | 6.89% | 6.90% |
| Net LDR | 63.1% | 67.4% | 73.8% | 77.3% | 74.6% |
| Liquidity Coverage Ratio | 272% | 148% | 163% | 250% | n/m |
| Net Stable Funding Ratio | 149% | 124% | 124% | 128% | n/m |
CreditSight View Comment
AS OF 19 Aug 2025UBP’s NIM and core revenue generation is strong thanks to its pivot towards higher yielding retail via organic growth and acquiring Citi’s local retail portfolio. However, returns have suffered as the asset quality repercussions which we have forewarned from its aggressive growth strategy towards the risky retail segments have come through, with elevated credit costs since 2H23. It has slowed loan growth but credit costs have not shown signs of stabilisation given a still high appetite for risk. The reserve cover is maintained relatively thin. Continued shareholder support with yet another stock rights offering in 2Q24 has ensured sufficient capital for now. We drop coverage on UBP given the impending maturity of its sole $ bond in Oct-25.
Recommendation Reviewed: August 19, 2025
Recommendation Changed: January 01, 1970
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Search topics about wealth insights and investments.Republic of the Philippines
- Country: Philippines
- Bond: RPGB 5.75 29
- Indicative Yield-to-Maturity (YTM): 4.32%
- Credit Rating : Baa2/BBB/BBB
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Country Overview
AS OF 02 May 2025- The Philippines is one of the fastest-growing emerging market economies, though GDP per capita remains relatively low at USD 3,870 per year, comparable to Egypt.
- Key economic drivers include business process outsourcing (BPO) and tourism, alongside a manufacturing sector specializing in electronics, automotive production, and food processing.
- While the country has limited natural resources, it is a significant global supplier of nickel ore.
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Search topics about wealth insights and investments.Jollibee Foods
- Bond: JFCPM 5.332 30
- Indicative Yield-to-Maturity (YTM): 4.55%
- Credit Rating : Unrated
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Fundamental View
AS OF 08 Apr 2025- Largest QSR Operator in the Philippines: JFC dominates the local fast-food market and continues to expand globally with brands like Jollibee, Chowking, Greenwich, and The Coffee Bean & Tea Leaf.
- Diversified Revenue Streams: Operates a mix of company-owned and franchised stores across multiple markets, reducing reliance on any single region.
- Strong Brand Equity: Maintains a loyal customer base with localized menu offerings and aggressive international expansion in North America, Europe, the Middle East, and Asia.
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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 28 Mar 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, while asset quality is strong.
Business Description
AS OF 28 Mar 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 twenty years, CBA has consolidated its position as the leading bank in Australia with a 24-28% share in household deposits and lending, helped by its acquisition during the 2008 crisis of Bank of Western Australia.
- In New Zealand it owns ASB Bank, but otherwise has been selling non-core assets, including its life insurance business.
Risk & Catalysts
AS OF 28 Mar 2025CBA’s financial health is closely linked to the Australian economy, in particular retail credit quality, mainly housing loans.
Earnings/NIMs are under pressure from strong mortgage market and deposit competition. Business banking growth however has been stellar and highly profitable.
Losses on housing loans have been minimal; the low stock on the housing market has led to home prices rising from Mar-23 onwards, contrary to expectations. Low rental vacancy rates (1%) and low unemployment rates (~4%) have been very supportive of asset quality. House prices are currently going through a soggy patch, but we are not concerned.
Key Metric
AS OF 28 Mar 2025| AUD mn | Y21 | Y22 | Y23 | Y24 | 1H25 |
|---|---|---|---|---|---|
| Return on Equity | 11.7% | 12.7% | 14.0% | 13.6% | 13.8% |
| Total Revenues Margin | 2.3% | 2.1% | 2.2% | 2.2% | 1.1% |
| Cost/Income | 47.0% | 46.3% | 43.7% | 45.0% | 45.2% |
| APRA CET1 Ratio | 13.1% | 11.5% | 12.2% | 12.3% | 12.2% |
| International CET1 Ratio | 19.4% | 18.6% | 19.1% | 19.1% | 18.8% |
| APRA Leverage Ratio | 6.0% | 5.2% | 5.1% | 5.0% | 4.9% |
| Impairment Charge/Avg Loans | 0.1% | (0.0%) | 0.1% | 0.1% | 0.0% |
| Gross Impaired Loans/Total Loans | 0.4% | 0.3% | 0.4% | 0.4% | 0.5% |
| Liquidity Coverage Ratio | 129% | 130% | 131% | 136% | 127% |
| Net Stable Funding Ratio | 129% | 130% | 124% | 116% | 116% |
CreditSight View Comment
AS OF 13 Aug 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. Strong mortgage market and deposit competition had capped NIMs despite higher cash rates. 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: August 13, 2025
Recommendation Changed: October 05, 2016
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