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Sector: Financial Services
Kasikornbank
- Sector: Financial Services
- Sub Sector: Banks
- Region: Thailand
- Bond: KBANK 5.458 28
- Indicative Yield-to-Maturity (YTM): 4.77%
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Fundamental View
AS OF 05 Dec 2025Kasikornbank (KBANK) is a historically sound and profitable bank.
Capitalisation is strong and the bank has among the highest CASA ratios in the banking sector. Asset quality took a surprise turn for the worse in 4Q22 due to its larger SME exposure and the bank has since focused on de-risking its portfolio. Credit costs are improving but remain elevated.
Margins are high compared to most other Thai banks we cover as a result of its strong SME franchise, but the shift in growth focus to the safer but lower yielding segments has diminished its margin lead.
Business Description
AS OF 05 Dec 2025- KBank is currently the second largest bank in Thailand. It briefly was the largest from 2018 until mid-2020, upon which Bangkok Bank completed its acquisition of Indonesia's Bank Permata and took its place.
- KBank's history can be traced back to 1945 when it was first established as Thai Farmers Bank. It was listed on the Stock Exchange of Thailand in 1976 and changed its name to Kasikornbank in 2003.
- As of September 2025, the bank's loan mix by segment consists of 41% corporate, 25% SME, 29% retail and 5% others.
- KBank is known for its strong SME franchise. It also partially owns a life insurance company, Muang Thai Life.
Risk & Catalysts
AS OF 05 Dec 2025We see a significant impact to the Thai economy from potential US tariffs, with ripple effects in the form of lower bank NIMs and higher credit costs than earlier guided for this year. Moody’s and Fitch have also downgraded their rating outlook on the Thailand sovereign (and consequently the Thai banks including BBL at Moody’s, which it currently rates in line with the sovereign) to negative in April and September 2025 respectively on increased risks to Thailand’s economic and fiscal strength.
KBANK has a higher retail/SME loan mix and sizable restructured loans portfolio (~8.8% of total loans), so credit costs remain elevated compared to peers with guidance now revised to 165-170 bp for 2025. We expect a similar range for 2026 given challenges to the Thai economy including US tariffs, but KBANK’s higher NIM and low-40%s cost-income ratio provide comfortable room for that to be absorbed. The focus on safer segments is helping to rein in credit costs.
KBANK’s switch to focus on safer segments however will weigh on the NIM, which is compounded by more rate cuts from the BOT to support growth. The NIM currently remains higher than most of its peers.
Key Metric
AS OF 05 Dec 2025| THB mn | FY21 | FY22 | FY23 | FY24 | 9M25 |
|---|---|---|---|---|---|
| PPP ROA | 2.38% | 2.36% | 2.52% | 2.64% | 2.59% |
| ROA | 0.98% | 0.86% | 0.99% | 1.15% | 1.19% |
| ROAE | 8.3% | 7.3% | 8.2% | 9.0% | 9.1% |
| Equity / Assets | 13.1% | 13.4% | 13.9% | 14.9% | 15.2% |
| CET1 Ratio | 15.5% | 15.9% | 16.5% | 17.4% | 18.7% |
| Gross NPL ratio | 3.76% | 3.19% | 3.19% | 3.20% | 3.19% |
| Provisions / Loans | 1.73% | 2.11% | 2.08% | 1.90% | 1.64% |
| Gross LDR | 93% | 91% | 92% | 91% | 88% |
| Liquidity Coverage Ratio | 174% | 164% | 195% | 184% | n/m |
CreditSight View Comment
AS OF 23 Oct 2025Kasikornbank is the 2nd largest bank in Thailand. We are cautious about its one third loan book exposure to SMEs given the macro backdrop; credit costs spiked in 4Q22 mainly from the SME book and high yield small ticket lending, and the restructured loan book remains sizable compared to peers. The bank however has switched to focus on safer segments, which is weighing on the historically high NIM but helped to stabilize credit costs. Credit costs remain fairly elevated but comfortably absorbed thus far. Capital is high with CET1 above 18%. The NIM though is on a decline from lower rates, safer new loans, higher parking of funds in liquidity. We see a meaningful US tariff impact, with ripple effects in the form of lower bank NIMs and continued high credit costs.
Recommendation Reviewed: October 23, 2025
Recommendation Changed: April 22, 2025
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Fundamental View
AS OF 05 Dec 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 has been built back to 18%. Management aims to keep the CET1 ratio above ~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 05 Dec 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 September 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 05 Dec 2025We see a significant impact to the Thai economy from potential US tariffs, with ripple effects in the form of lower bank NIMs and higher credit costs than earlier guided for this year. Moody’s and Fitch have also downgraded their rating outlook on the Thailand sovereign (and consequently the Thai banks including BBL at Moody’s, which it currently rates in line with the sovereign) to negative in April and September 2025 respectively on increased risks to Thailand’s economic and fiscal strength.
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 05 Dec 2025| THB mn | FY21 | FY22 | FY23 | FY24 | 9M25 |
|---|---|---|---|---|---|
| PPP ROA | 1.65% | 1.60% | 1.92% | 2.02% | 2.24% |
| ROA | 0.65% | 0.67% | 0.93% | 1.00% | 1.12% |
| ROE | 5.6% | 5.9% | 8.1% | 8.3% | 8.9% |
| Equity / Assets | 11.4% | 11.5% | 11.8% | 12.2% | 12.9% |
| CET1 Ratio | 15.2% | 14.9% | 15.4% | 16.2% | 18.0% |
| Calculated NPL ratio | 3.20% | 3.10% | 2.70% | 2.70% | 3.30% |
| Provisions / Loans | 1.38% | 1.24% | 1.26% | 1.30% | 1.49% |
| Gross LDR | 82% | 84% | 84% | 85% | 82% |
| Liquidity Coverage Ratio | 270% | 271% | 277% | 265% | n/m |
CreditSight View Comment
AS OF 03 Dec 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 are moving it from Underperform to Market perform as its new issues trade at fair levels.
Recommendation Reviewed: December 03, 2025
Recommendation Changed: December 03, 2025
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Search topics about wealth insights and investments.Sumitomo Mitsui Financial Group
- Sector: Financial Services
- Sub Sector: Banks
- Region: Japan
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Fundamental View
AS OF 26 Nov 2025After reorganising and building up capital for the full impact of Basel 3, SMFG has recently been acquisitive to develop its next phase of growth, and now has a lower capital buffer than Mizuho.
It has a strong retail, mid and large corporate franchise in Japan, but its securities arm SMBC Nikko punches below weight.
Given its size and systemic importance, SMFG is considered too big to fail, and will be supported by the Japanese government if needed.
Business Description
AS OF 26 Nov 2025- The core unit of SMFG is Sumitomo Mitsui Banking Corp (SMBC), whose main predecessors were Sumitomo Bank and Mitsui Bank.
- SMFG's group companies include the securities firm SMBC Nikko, SMBC Trust Bank, SMBC Card Company, SMBC Consumer Finance, Sumitomo Mitsui Finance and Leasing, SMFG India Credit Company (SMICC), Sumitomo Mitsui DS Asset Management, and SMBC Aviation Capital.
- SMFG does not have a large trust business as Sumitomo Trust and Chuo Mitsui Trust chose not to join SMFG, but merged with each other to form the separate Sumitomo Mitsui Trust Holdings.
- It has been acquisitive over the years, particularly in emerging Asia and leasing assets. In 2021, the group took a 49% stake in Vietnam's FE Credit, 74.9% of Indian NBFI Fullerton Capital (now called SMICC), 4.99% of Philippines' RCBC, and 4.5% of US investment bank Jefferies. In 2022, it increased its stake in RCBC to 20%. In 2023, it acquired a 15% stake in Vietnam's VP Bank, and increased its stake in Jefferies from 4.5% to 15%, and in 2024 took its stake in SMICC to 100%. In 2025 it took a 24% stake in India's Yes Bank, and increased its Jefferies stake to 20%.
Risk & Catalysts
AS OF 26 Nov 2025SMFG has the strongest Japan retail franchise amongst its peers, and a very strong corporate banking franchise.
Similar to the other megabanks, SMFG aims to focus more on the US, and reduce low return RWAs in Europe and Asia ex-Japan.
SMFG has made a number of acquisitions and taken stakes in banks and NBFIs in Vietnam, the Philippines, India and Indonesia. The group took JPY 135 bn of goodwill impairments in FY24 on its Vietnam investments. RoE on these investments has been poor.
It has increased its 15% stake in Jefferies to 20%, to develop revenue opportunities for SMBC Nikko. Further investments in SMBC Nikko will be required.
Its CET1 ratio buffer is ~200 bp, which we would like to see maintained.
Key Metric
AS OF 26 Nov 2025| JPY bn | FY21 | FY22 | FY23 | FY24 | 1H25 |
|---|---|---|---|---|---|
| Net Interest Revenue/Average Assets | 0.64% | 0.68% | 0.70% | 0.82% | 0.88% |
| Operating Income/Average Assets | 1.23% | 1.26% | 1.39% | 1.44% | 1.58% |
| Operating Expense/Operating Income | 62% | 61% | 60% | 58% | 53% |
| Pre-Impairment Operating Profit / Average Assets | 0.48% | 0.51% | 0.58% | 0.60% | 0.79% |
| Impairment charge/Average Loans | (0.31%) | (0.22%) | (0.27%) | (0.32%) | (0.16%) |
| ROAA | 0.30% | 0.32% | 0.36% | 0.41% | 0.64% |
| ROAE | 5.9% | 6.5% | 7.0% | 8.0% | 12.5% |
CreditSight View Comment
AS OF 17 Nov 2025SMFG’s banking business had performed well, while its non-bank subsidiaries had underperformed over FY21-22. The group had a better 2H vs a poor 1H23, with improved trading and fee revenues, partially offset by higher credit costs at the non-bank businesses. The group became acquisitive from 2021, taking a 49% stake in a leading Vietnamese NBFI and 15% of its parent (VP Bank), 20% of RCBC of the Philippines, 74.9% of NBFI Fullerton India (now 100%), 4.5% in US IB Jefferies (increasing to 15%), and 24% of India’s Yes Bank for the next stage of growth. Its high CET1 ratio has been whittled down by acquisitions. FY24 results were boosted by share sales and structured investment trusts, 1H25 showed a large jump on base effects. Govt. support is assured. We like its PerpNC10 AT1s for duration.
Recommendation Reviewed: November 17, 2025
Recommendation Changed: August 05, 2025
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Search topics about wealth insights and investments.Mitsubishi UFJ Financial Group
- Sector: Financial Services
- Sub Sector: Banks
- Region: Japan
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Fundamental View
AS OF 26 Nov 2025MUFG is the largest of Japan’s three megabanks, and has the most diversified operations by business line and geography. It had also been the most acquisitive till the early 2020s.
Core profitability had been weak due to Japan’s ultra-low interest rates and growth; that improved post an efficiency drive and a CEO change in April 2020; the bank has improved international margins and fee income, and benefits from rising domestic interest rates.
Given its size and systemic importance, MUFG is considered too big to fail, and will be supported by the Japanese government if needed.
Business Description
AS OF 26 Nov 2025- The 2 main banks of MUFG are MUFG Bank (earlier Bank of Tokyo-Mitsubishi UFJ or BTMU) & Mitsubishi UFJ Trust & Banking. In the early stages of Japan's long banking crisis, Bank of Tokyo merged with Mitsubishi Bank, and in the late stages they absorbed UFJ (former Sanwa Bank & Tokai Bank) while Mitsubishi Trust absorbed Toyo Trust & Nippon Trust.
- The group includes consumer lenders Mitsubishi-UFJ NICOS & ACOM, and securities/IB JVs with Morgan Stanley. MUFG invested in Morgan Stanley in 2008 and now has a ~20% stake. In Dec-22, it completed the sale of its US retail and commercial bank, MUFG Union Bank, to US Bancorp.
- It has a majority stake in Thailand's Bank of Ayudhya (now Krungsri), 20% stakes in Vietnam's Vietinbank and Philippines' Security Bank, and 100% of Indonesia's Bank Danamon.
- In 2019, it acquired Colonial First State from Commonwealth Bank of Australia to strengthen its global asset management business, in 2020 it invested $700 mn in SE Asia's Grab, and more recently has bought Home Credit's Philippine and Indonesian subsidiaries, Link (an Australian pension fund administrator), auto loan companies in Indonesia, Albacore Capital, StanChart's Indonesian retail operations, and a stake in an Indian NBFI.
Risk & Catalysts
AS OF 26 Nov 2025Its recent divisional performance has been strong, with the domestic businesses benefiting from higher BOJ rates, and robust growth in fee income.
Credit costs have been rising because of increased exposure to personal unsecured loans in Japan and Southeast Asia, as well as higher-risk lending in Southeast Asia.
Its close relationship with Morgan Stanley has led it to take large positions in US corporate finance loans, which has been problematic on occasion.
We see limited risk from rising JGB yields as the large equity unrealised gains dwarf the unrealised losses on the bond portfolio.
Key Metric
AS OF 26 Nov 2025| JPY bn | FY21 | FY22 | FY23 | FY24 | 1H25 |
|---|---|---|---|---|---|
| Net Interest Revenue/Average Assets | 0.57% | 0.79% | 0.64% | 0.73% | 0.73% |
| Operating Income/Average Assets | 1.11% | 1.22% | 1.23% | 1.22% | 1.48% |
| Operating Expense/Operating Income | 69% | 65% | 61% | 67% | 56% |
| Pre-Impairment Operating Profit / Average Assets | 0.34% | 0.43% | 0.48% | 0.40% | 0.65% |
| Impairment charge/Average Loans | (0.30%) | (0.61%) | (0.36%) | 0.00% | (0.12%) |
| ROAA | 0.32% | 0.30% | 0.39% | 0.47% | 0.65% |
| ROAE | 6.7% | 6.5% | 8.1% | 9.3% | 12.5% |
| CET1 post Basel 3 reforms excl. secs gains | 10.4% | 10.3% | 10.1% | 10.8% | 10.5% |
CreditSight View Comment
AS OF 19 Dec 2025MUFG is the largest of the megabanks with more diversified business lines than its peers. Digitalisation and operational efficiency improvements, in addition to higher rates in Japan and the US, had led to much better results in FY24. Lending discipline has lifted international margins; domestic margins though lag its peers. Its ~20% shareholding in Morgan Stanley has been a boon. Its $ liquidity is the best amongst its peers, and government support is assured. Its CET1 ratio ratio has fallen to ~180 bp, which we see as low; pro-forma for the Shriram acquisition it will fall to a particularly low ~120 bp. However, we see the group’s earnings power improving from BOJ rate rises and so continue with our Market perform recommendation. We see current levels on its 6NC5 of G+72 bp as fair.
Recommendation Reviewed: December 19, 2025
Recommendation Changed: August 05, 2025
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Fundamental View
AS OF 25 Nov 2025UBS agreed to acquire Credit Suisse in March 2023 after the latter collapsed following a severe liquidity crisis.
CS was a large and complex organisation, so the integration, and the inevitable associated losses and costs, will dominate UBS’s strategic outlook and financial performance for several years.
However, UBS was able to negotiate substantial downside protection which should shield it from losses at CS.
Away from CS, UBS has reshaped its business model, with a greater emphasis on wealth management and less focus on investment banking, particularly fixed income.
Its earnings remain somewhat dependent on capital market conditions, but its capital, asset quality and profitability ratios have been among the strongest for European banks.
Business Description
AS OF 25 Nov 2025- Headquartered in Zurich, Switzerland, UBS has private, corporate and institutional clients worldwide and retail clients in Switzerland. It is one of the world's largest wealth managers.
- It completed the acquisition of CS on 12 June 2023. It has merged CS’s domestic Swiss bank (Credit Suisse Schweiz AG) with its own domestic bank (UBS Switzerland AG) in 2024, keeping the CS brand “for the time being”.
- CS’s holding company (Credit Suisse Group AG) has been merged into UBS Group AG, so that the group has a single holding company, and the operating subsidiaries, including UBS AG and Credit Suisse AG, were merged on 31 May 2024.
- UBS operates through its Corporate Center and four business divisions: Global Wealth Management, Personal & Corporate Banking, Asset Management, and the Investment Bank, plus a new Non-core and Legacy division following the acquisition of CS.
- The Investment Bank has been restructured in recent years to scale back fixed income trading and focus on equities trading and origination & advisory business.
Risk & Catalysts
AS OF 25 Nov 2025The proposed amendments to the Swiss ‘Too Big To Fail’ capital and TLAC framework by the Swiss authorities could result in substantially higher capital requirements for UBS.
The decision of the Swiss Federal Administrative Court in October 2025 that the write-down of Credit Suisse AT1s by FINMA in March 2023 was unlawful creates uncertainty about any possible liability for UBS.
A French court imposed fines and civil damages of €4.5 bn ($5.1 bn) in February 2019, which UBS appealed. The French Supreme Court overturned the penalties and damages in November 2023, and the case has been remanded to the Court of Appeal for a retrial.
Key Metric
AS OF 25 Nov 2025| $ mn | 3Q25 | Y24 | Y23 | Y22 | Y21 |
|---|---|---|---|---|---|
| Return On Equity | 11.1% | 6.0% | 38.4% | 13.0% | 12.4% |
| Total Revenues Margin | 3.1% | 3.0% | 2.9% | 3.1% | 3.2% |
| Cost/Income | 77.0% | 84.8% | 95.0% | 72.1% | 73.6% |
| CET1 Ratio (Transitional) | 14.8% | 14.3% | 14.3% | 14.2% | 15.0% |
| CET1 Ratio (Fully-Loaded) | 14.8% | 14.3% | 14.4% | 14.2% | 15.0% |
| Leverage Ratio (Fully-Loaded) | 5.8% | 5.8% | 5.4% | 5.7% | 5.7% |
| Liquidity Coverage Ratio | 182% | 188% | 216% | 164% | 155% |
| Impaired Loans (Gross)/Total Loans | 0.6% | 0.6% | 0.4% | 0.4% | 0.4% |
CreditSight View Comment
AS OF 05 Jan 2026We have Market perform recommendations on UBS AG (operating bank) and UBS Group (holding company) having revised the HoldCo recommendation from Underperform in August 2024. Its rescue and takeover of Credit Suisse in March 2023 was a seminal event that has had major consequences for UBS’s strategy and financial performance, as well as carrying substantial execution risk. However, the integration is on track, and UBS’s performance has been steadily improving. Capital, asset quality and liquidity all look strong, although Swiss regulatory capital requirements are set to increase significantly in coming years.
Recommendation Reviewed: January 05, 2026
Recommendation Changed: August 14, 2024
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Fundamental View
AS OF 25 Nov 2025Standard Chartered has been making good progress in the past few years, improving its asset quality and profitability and dealing with legacy litigation issues. Capital, funding and liquidity look solid.
However, tensions between China and the West, including reciprocal trade tariffs between the US and China, and global economic headwinds continue to cloud the near term outlook.
Its unusual business mix – headquartered and regulated in the UK but operating primarily in Asia, Africa and the Middle East – means it is well diversified but sensitive to geopolitical developments and emerging market volatility.
Business Description
AS OF 25 Nov 2025- Standard Chartered PLC is the holding company and listed entity of the group, in which Standard Chartered Bank is the main operating company.
- Although Standard Chartered is headquartered in London and therefore subject to UK banking regulation, its operations are mainly in Asia (Hong Kong is its biggest single market, Africa and the Middle East. It is present in over 60 markets.
- It has the usual variety of businesses across these regions, including corporate and institutional banking, retail banking, commercial banking and private banking. It specialises in trade finance and cross-border cash management.
- It is classified as a G-SIB, with a regulatory capital buffer of 1%.
Risk & Catalysts
AS OF 25 Nov 2025Political tensions in Hong Kong, a slowing economy in China and a weak commercial real estate sector, and a US/China trade war have threatened the growth and stability of some of Standard Chartered’s key markets.
A number of Standard Chartered’s markets have underperformed in the past but are now turnaround stories, including India, Korea, Indonesia and the UAE.
The group has had to improve its AML and sanctions controls. In April 2019, it paid a $947 mn fine to US authorities over breaches of US sanctions and a £102 mn fine to the UK FCA for AML weaknesses.
Key Metric
AS OF 25 Nov 2025| $ mn | 3Q25 | Y24 | Y23 | Y22 | Y21 |
|---|---|---|---|---|---|
| Return on Equity | 9.8% | 8.0% | 7.0% | 5.7% | 4.5% |
| Total Revenues Margin | 2.2% | 2.3% | 2.2% | 2.0% | 1.8% |
| Cost/Income | 61.5% | 64.0% | 64.1% | 66.9% | 74.3% |
| CET1 Ratio (Transitional) | 14.2% | 14.2% | 14.1% | 14.0% | 14.1% |
| CET1 Ratio (Fully-Loaded) | 14.2% | 14.2% | 14.1% | 13.9% | 14.1% |
| Leverage Ratio (Fully-Loaded) | 4.6% | 4.8% | 4.7% | 4.8% | 4.9% |
| Loan Impairment Charge | 0.3% | 0.2% | 0.2% | 0.3% | 0.1% |
| Impaired Loans (Gross)/Total Loans | 1.9% | 2.2% | 2.5% | 2.5% | 2.7% |
CreditSight View Comment
AS OF 02 Dec 2025We revised our recommendation on Standard Chartered HoldCo senior from Underperform to Market perform on 26 April 2023, but we changed our recommendations on Tier 2 and AT1 from Fair to Rich on 10 January 2024. The changes reflect StanChart’s recent resilient performance, while taking into account the potential impact from US tariffs policies and exposure to China. Capital and liquidity ratios are robust, and profitability has improved significantly, but the bank continues to face geopolitical tensions inherent in its extensive operations in Hong Kong, China and the rest of Asia.
Recommendation Reviewed: December 02, 2025
Recommendation Changed: April 26, 2023
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Search topics about wealth insights and investments.State Bank of India
- Sector: Financial Services
- Sub Sector: Banks
- Country: India
- Bond: SBIIN 4.875 28
- Indicative Yield-to-Maturity (YTM): 5.23%
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Fundamental View
AS OF 19 Nov 2025State Bank of India (SBI) is the largest state-owned bank in India and is in some respects the country’s flagship bank. Given the bank’s ~55% government ownership and systemic importance, government support for SBI is very strong.
The bank’s capital buffers are relatively low, but we take comfort in the strong government support.
Business Description
AS OF 19 Nov 2025- State Bank of India is the largest commercial bank in India. Its predecessor banks date back to the 19th century. In the early 20th century, they merged to form the Imperial Bank of India, which became the State Bank of India after India gained independence in 1947.
- The Government of India remains the largest shareholder with a 55.03% stake. Per the SBI Act, the government's shareholding cannot fall below 55%.
- SBI's merged with its 5 associate banks and Bharatiya Mahila Bank in 2018. The merger catapulted SBI into one of the world's 50 largest banks.
- The bank has 85% of its loans in the domestic market, and has steadily increased its international business too over the past few years with offices across all international business centres. The domestic book is split 43% retail, 33% corporates, ~14% SMEs and ~10% to the agri segment as of September 2025.
- It has diversified its operations with well regarded subsidiaries in the areas of fund management, credit cards, insurance, and capital markets.
Risk & Catalysts
AS OF 19 Nov 2025SBI does not have a strong buffer vs. the regulatory minimum of 8%, but its size, systemic importance and majority government shareholding confer particularly strong government support. But consequentially, any deterioration in the sovereign ratings will also affect the bank’s credit.
RBI repo rate cuts will impact the NIM in FY26-27, with another 25 bp reduction on the table in December. System loan growth has been slow despite improved system liquidity, but picked up in F2Q26. Momentum should sustain into F2H26 given GST rate cuts and the 3Q festive season. A sustained pickup in private sector capex though hinges on consumption strength enduring beyond the festive period.
We are cautious about pockets of stress in Indian retail, particularly unsecured retail and microfinance. Asset quality however is trending well as SBI’s personal unsecured loans book is ~95% to salaried employees of top tier corporates and the government.
Key Metric
AS OF 19 Nov 2025| INR mn | FY22 | FY23 | FY24 | FY25 | 1H26 |
|---|---|---|---|---|---|
| NIM | 3.12% | 3.37% | 3.28% | 3.09% | 2.93% |
| ROAA | 0.67% | 0.96% | 1.04% | 1.10% | 1.15% |
| ROAE | 11.9% | 16.5% | 17.3% | 17.3% | 16.4% |
| Equity to Assets | 5.6% | 5.9% | 6.1% | 6.6% | 7.4% |
| CET1 Ratio | 10.3% | 10.6% | 10.6% | 11.1% | 11.7% |
| Gross NPA Ratio | 3.97% | 2.78% | 2.24% | 1.82% | 1.73% |
| Provisions/Loans | 0.91% | 0.54% | 0.14% | 0.38% | 0.47% |
| PPP ROA | 1.58% | 1.59% | 1.60% | 1.72% | 1.69% |
CreditSight View Comment
AS OF 05 Nov 2025SBI is India’s largest bank and a well-run franchise. Government support (55% shareholding, can’t drop below 51%) underpins SBI’s relative positioning, while fundamentally, it has good operating metrics and business plans, a comfortable LDR, sufficient CET1 ratio (recently boosted by an equity raise in Jul-25), and the best management among the public sector banks. India’s macro backdrop remains relatively robust and SBI’s lower risk personal unsecured loans clientele is supporting asset quality well. Lower rates should keep asset quality well-supported. Rate cuts will feed through to the NIM in FY26, but treasury gains have provided some offset. Loan growth has been off to a slow start for the sector but is picking up. We like the name, but have it on M/P as it trades fair.
Recommendation Reviewed: November 05, 2025
Recommendation Changed: April 25, 2025
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Fundamental View
AS OF 19 Nov 2025ICICI Bank is one of the leading private banks in India and has a good diversified business model, with well regarded life and general insurance subsidiaries.
Under its previous CEO, the bank suffered setbacks from sizeable bad debt problems in FY17/18, but the situation has since stabilised following a leadership change and the bank has done well ever since.
Business Description
AS OF 19 Nov 2025- The original Industrial Credit and Investment Corporation of India (ICICI) was established in 1955 by the World Bank, the Government of India and representatives of Indian industry as a financial institution to provide Indian businesses with medium and long-term project financing.
- In 1994, ICICI established a commercial banking subsidiary, ICICI Bank as India's financial sector opened up, and in 2002 ICICI merged with ICICI Bank, keeping the latter's name.
- Retail now accounts for 52% of its loan book, corporates are at 20%, while rural and business banking & SMEs are at 6% and 20% respectively, and overseas (which is being de-emphasised) consists of just 2% at F2Q26.
- The bank has well regarded life insurance (ICICI Prudential) and general insurance (ICICI Lombard) businesses.
Risk & Catalysts
AS OF 19 Nov 2025ICICI has been delivering both relatively strong loan and deposit growth momentum, while maintaining its leading LDR and profitability, in testament to its strong franchise.
RBI repo rate cuts will impact the NIM in FY26-27, with another 25 bp reduction on the table in December. System loan growth has been slow despite improved system liquidity, but picked up in F2Q26. Momentum should sustain into F2H26 given GST rate cuts and the 3Q festive season. A sustained pickup in private sector capex though hinges on consumption strength enduring beyond the festive period.
We are cautious about pockets of stress in Indian retail, particularly unsecured retail and microfinance. However, ICICI’s prudence towards the segment than peers, and the banks not playing in the small ticket segment in general, are keeping asset quality well controlled.
Leadership and governance issues under the previous CEO Ms. Chanda Kochhar have been dealt with well, since her replacement in Oct-18.
Key Metric
AS OF 19 Nov 2025| INR bn | FY22 | FY23 | FY24 | FY25 | 1H26 |
|---|---|---|---|---|---|
| NIM | 3.96% | 4.48% | 4.53% | 4.32% | 4.32% |
| ROAA | 1.77% | 2.13% | 2.37% | 2.37% | 2.36% |
| ROAE | 14.7% | 17.2% | 18.7% | 17.9% | 16.8% |
| Equity/Assets | 12.1% | 12.6% | 12.7% | 13.7% | 14.5% |
| CET1 Ratio | 17.3% | 16.9% | 15.4% | 15.8% | 14.9% |
| Gross NPA Ratio | 3.60% | 2.81% | 2.16% | 1.67% | 1.58% |
| Provisions/Loans | 0.97% | 0.65% | 0.30% | 0.34% | 0.37% |
| PPP ROA | 2.97% | 3.28% | 3.36% | 3.37% | 3.39% |
CreditSight View Comment
AS OF 19 Nov 2025ICICI Bank is a preferred name among the Indian FIs we cover. We like the bank’s robust capital and loan loss buffers, strong asset quality, as well as peer leading margins, profitability and liquidity position. Under its previous CEO, the bank suffered setbacks from sizable bad debt problems in FY17/18 but the situation has since stabilised following a leadership change. The bank has emerged stronger from a capital, asset quality and earnings perspective, as it de-risked its book, and took pro-active actions to protect its capital by raising equity and selling small stakes in its well-regarded insurance subsidiaries to raise funds and set aside more general provisions. ICICI last issued a $ bond in 2017; we have ICICI on M/P due to likely low trading liquidity.
Recommendation Reviewed: November 19, 2025
Recommendation Changed: December 07, 2020
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Search topics about wealth insights and investments.Security Bank (PH)
- Sector: Financial Services
- Sub Sector: Banks
- Country: Philippines
- Bond: SECBPM 5.5 29
- Indicative Yield-to-Maturity (YTM): 4.694%
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Fundamental View
AS OF 18 Nov 2025Security Bank has historically been a wholesale focused bank. Rapid retail expansion pre-pandemic led to a large asset quality hit when COVID-19 struck. The bank completed revamping its underwriting processes at end-2021 and has resumed brisk growth in the retail book since.
The bank had a less well-established deposit franchise than most peers, resulting in a heavy hit to NIMs when rates rose this cycle. This has led it to focus aggressively on growing the higher yielding retail and MSME segments, the latter via forming a new business banking segment in 2022.
Previously high capital ratios have hence fallen; the CET1 ratio is a low 12-13%.
MUFG is a 20% shareholder of Security Bank.
Business Description
AS OF 18 Nov 2025- Security Bank was established in 1951 and obtained its universal banking license from the BSP in 1994. It is today the 9th largest bank in the Philippines.
- The bank is majority-owned by longtime owner Frederick Y. Dy (23.7%) and MUFG Bank (20%), which acquired its stake in April 2016.
- SB Finance, a joint venture between Security Bank and Thailand's Bank of Ayudhya (Krungsri), a consolidated subsidiary of MUFG, was launched in 2019. The unit is a consumer finance company formed to engage in the unsecured loans business in the Philippines, focusing on the lower mass retail segment.
- Security Bank's loan portfolio is 32% consumer, 4% MSME, 29% middle market and 35% corporate at 2Q25. The consumer and MSME book comprises mortgages (44%), auto loans (23%), credit card (23%) and small business loans (10%).
Risk & Catalysts
AS OF 18 Nov 2025Any rating downgrade of the Philippine sovereign would have a negative impact on Security Bank.
RRR cuts and rates coming down, along with brisk growth in higher yielding but riskier retail and MSME (business banking), are supporting the NIM well. Asset quality indicators however have unsurprisingly started to weaken with a jump in credit costs. We remain cautious given the relatively thin reserve cover and capital buffer. Management is now exercising some prudence in retail loan growth after the emergence of stress in credit cards.
Capital ratios have fallen due to brisk RWA growth and now trail peers. We view current levels as low, but do not rule out capital support from MUFG if needed.
A prolonged hit to sentiment from the flood controls scandal would exacerbate the slowdown in GDP and credit growth, and pressure asset quality.
Key Metric
AS OF 18 Nov 2025| PHP mn | FY21 | FY22 | FY23 | FY24 | 9M25 |
|---|---|---|---|---|---|
| Net Interest Margin | 4.43% | 4.23% | 4.49% | 4.73% | 4.70% |
| ROA | 1.0% | 1.4% | 1.1% | 1.1% | 1.1% |
| ROE | 5.6% | 8.4% | 7.0% | 8.1% | 8.2% |
| PPP ROA | 2.30% | 2.17% | 1.97% | 2.18% | 2.40% |
| CET1 Ratio | 19.1% | 16.1% | 15.3% | 12.9% | 12.7% |
| Total Equity/Total Assets | 17.88% | 14.94% | 15.62% | 12.50% | 13.41% |
| Gross NPL Ratio | 3.94% | 2.95% | 3.36% | 2.85% | 3.02% |
| Net LDR | 85.7% | 83.0% | 88.8% | 84.6% | 74.6% |
| Liquidity Coverage Ratio | 150% | 144% | 158% | 178% | 189% |
| Net Stable Funding Ratio | 138% | 122% | 131% | 130% | 143% |
CreditSight View Comment
AS OF 19 Nov 2025Security Bank has historically been a wholesale focused bank. Rapid retail expansion leading up to the pandemic led to a large asset quality fallout. It has since resumed aggressive growth in higher yielding but riskier retail and MSME segments to counter NIM pressure. This along with improving funding costs from a declining rate environment has supported the NIM. Asset quality however is showing strains from the brisk growth in riskier segments as we had anticipated, leading it to start exercising some prudence in retail loan growth. We remain cautious about the asset quality implications given the relatively thin reserve cover and capital buffer (~12-13% CET1 ratio). We have an Underperform recommendation.
Recommendation Reviewed: November 19, 2025
Recommendation Changed: May 21, 2024
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Search topics about wealth insights and investments.Bank of Philippine Islands
- Sector: Financial Services
- Sub Sector: Banks
- Country: Philippines
- Bond: BPIPM 5 30
- Indicative Yield-to-Maturity (YTM): 4.40%
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Fundamental View
AS OF 13 Nov 2025Bank of the Philippine Islands (BPI) is the 3rd largest bank in the Philippines by assets.
We view the bank as too big to fail given its systemic importance in the country. There is also a strong probability of support from the government in addition to its main shareholder, the Ayala Corporation if needed.
BPI has a long history, and we view it as a fundamentally sound bank with strong and improved profitability, and comfortable liquidity. Capital management however has become less conservative, and while asset quality is relatively well managed, we are keeping an eye on strong growth in the non-wholesale book.
Business Description
AS OF 13 Nov 2025- The history of the Bank of the Philippine Islands traces back to 1851. It is the oldest bank in the Philippines and South East Asia. It was first listed on the Philippine Stock Exchange in 1971, and became a universal bank in 1982.
- Ayala Corporation, one of the biggest conglomerates in the country, became BPI's dominant shareholder in 1969. Ayala Corp still holds a 49% stake in the bank.
- BPI has been acquisitive across the years. It merged with Far East Bank and Trust Company and acquired Ayala Insurance Holdings Corp in 2000. It acquired DBS Bank Philippines in 2001 and Prudential Bank Philippines in 2005. DBS was a shareholder of BPI but exited its position in 2013. More recently in January 2024, it completed the acquisition of the Gokongwei conglomerate's Robinsons Bank.
- The bank is predominantly a corporate bank with 69% of its loan book outstanding to corporates, and the balance to MSME and retail as of 3Q25. Management is keen to skew the loan mix further towards MSME and retail.
Risk & Catalysts
AS OF 13 Nov 2025Direct impact from US tariffs is limited given that the Philippines is not a major goods exporter, but there will be second order effects from a slowdown in regional and global growth.
The recent public infrastructure graft scandal will dampen government spending and private investment over the next couple of quarters, weighing on GDP and corporate loan growth. A prolonged hit to sentiment would exacerbate these effects and put pressure on asset quality.
Further BSP rate cuts are likely to support growth, which will pressure the NIM. BPI, however, remains on track for NIM expansion this year, driven by a pivot toward higher-yielding retail/MSME lending, RRR reductions, and reduced liquidity drag. We see asset quality risks from the strong focus on unsecured retail and MSME growth, but BPI’s wholesale-focused book (69% of total loans) provides comfort and provisioning capacity is strong.
Any rating downgrade of the Philippine sovereign would negatively impact BPI.
Key Metric
AS OF 13 Nov 2025| PHP mn | FY21 | FY22 | FY23 | FY24 | 9M25 |
|---|---|---|---|---|---|
| PPP ROA | 2.01% | 2.41% | 2.52% | 2.78% | 3.02% |
| Reported ROA (Cumulative) | 1.10% | 1.59% | 1.93% | 1.98% | 2.02% |
| Reported ROE (Cumulative) | 8.4% | 13.1% | 15.4% | 15.1% | 15.0% |
| Net Interest Margin | 3.30% | 3.59% | 4.09% | 4.31% | 4.60% |
| CET1 Ratio | 15.8% | 15.1% | 15.3% | 13.9% | 14.9% |
| Total Equity/Total Assets | 12.1% | 12.2% | 12.4% | 13.0% | 13.7% |
| NPL Ratio | 2.49% | 1.76% | 1.84% | 2.13% | 2.29% |
| Provisions/Loans | 0.91% | 0.58% | 0.22% | 0.32% | 0.68% |
| Liquidity Coverage Ratio | 221% | 195% | 207% | 159% | n/m |
| Net Stable Funding Ratio | 155% | 149% | 154% | 146% | n/m |
Our View
AS OF 19 Nov 2025BPI is the third largest bank in the Philippines with a long history. Its traditionally conservative approach has led to a loss of loan market share in the past, as well as a lower NIM than BDO and MBT. Recent brisk expansion in higher yielding retail and MSME loans has strongly improved profitability levels and driven NIM expansion despite rate cuts. While asset quality has slipped with the loan mix shift, it remains acceptable. However, we are watchful of risks from the strong growth in the non-wholesale book as provision reserves have been pared down to lower levels than peers. Still, we are overall comfortable with BPI given the large wholesale book (69% of loans) and underwriting record, strong provisioning capacity and comfortable liquidity. We have BPI on U/P from an RV standpoint.
Recommendation Reviewed: November 19, 2025
Recommendation Changed: May 21, 2025
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