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Sector: Financial Services
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Fundamental View
AS OF 17 Sep 2025ING displays robust and consistent asset quality, good earnings and a well-balanced funding profile although we expect financial metrics to soften from these peaks.
These attributes are supported by its strong franchise in retail and wholesale banking in the Benelux region and its good geographic diversification.
At the same time, it has sizeable exposures to cyclical industry sectors in its Wholesale Banking division, although these have been reduced in recent years. Capital cushions are being run down over time closing the gap between the bank’s capital position and those of some of its major European peers.
Business Description
AS OF 17 Sep 2025- ING was founded in 1991 by a merger between Nationale-Nederlanden and NMB Postbank Group. It is now the largest Dutch bank by total assets.
- ING is focused on retail and commercial banking in the Benelux countries, with direct banking franchises in Germany, Spain, Italy, Australia, as well as Poland, Romania, Turkey and the Philippines.
- In April 2016, it completed the process of divesting all of its insurance business (in Europe, the US and Asia), under the Restructuring Plan conditions imposed by the European Commission after it received state aid in 2008-2009.
- In November 2016, ING announced that its resolution entity would be its holding company, ING Groep NV. ING Groep is now the issuing entity for all TLAC/MREL-eligible debt (AT1, Tier 2 and senior unsecured), and its sole operating entity is ING Bank N.V.
Risk & Catalysts
AS OF 17 Sep 2025Recently, Moody’s amended the outlook on ING’s senior unsecured debt rating to Positive.
ING is looking to become more acquisitive, so it remains a candidate for M&A in the coming years. In 1H25, it increased its stake in Van Lanschot to 20.3%.
ING’s CET1 ratio will trend down towards its 12.5% target in the coming years, bringing it more in line with other major peers.
Key Metric
AS OF 17 Sep 2025| € mn | Y21 | Y22 | Y23 | Y24 | 2Q25 |
|---|---|---|---|---|---|
| Return On Equity | 8.8% | 7.1% | 14.4% | 12.6% | 13.3% |
| Total Revenues Margin | 2.0% | 1.9% | 2.3% | 2.3% | 2.1% |
| Cost/Income | 60.5% | 60.3% | 51.2% | 53.6% | 53.2% |
| CET1 Ratio (Transitional) | 15.9% | 14.5% | 14.7% | 13.6% | 13.3% |
| CET1 Ratio (Fully-Loaded) | 15.9% | 14.5% | 14.7% | 13.6% | 13.3% |
| Leverage Ratio (Fully-Loaded) | 5.9% | 5.1% | 5.0% | 4.7% | 4.3% |
| Liquidity Coverage Ratio | 139.0% | 134.0% | 143.0% | 143.0% | 141.0% |
| Impaired Loans (Gross)/Total Loans | 1.8% | 1.7% | 1.8% | 1.9% | 1.8% |
CreditSight View Comment
AS OF 31 Oct 2025After divesting its insurance operations, the remaining business, ING Bank, has stayed a solid Benelux-based bank with a strong direct banking arm in several countries. Profitability growth has been supported by a gradual recovery in the Dutch economy. Net interest revenues are declining but fundamentally, the bank looks in good shape versus several other core European banks and fee income is increasing. Capital ratios are trending downwards given distributions on offer to shareholders. In January 2025, it announced its intention to exit Russia but in September it was announced the deal has stalled. We moved from Outperform to Market perform on 6 February 2025.
Recommendation Reviewed: October 31, 2025
Recommendation Changed: February 07, 2025
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Search topics about wealth insights and investments.China CITIC Financial Asset Management (Huarong)
- Sector: Financial Services
- Sub Sector: Banks
- Region: China
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Fundamental View
AS OF 10 Sep 2025A large impairment loss in FY20 brought CITIC AMC (formerly Huarong) to the brink of insolvency, but a state-led rescue plan provided it with liquidity support and brought its capital back above minimum requirements. CITIC has replaced the MoF as its largest shareholder. CITIC AMC remains as one of the Big 5 state-owned AMCs in China and will continue to perform national services.
On the guidance of the authorities, CITIC AMC has divested almost all of its non-core subsidiaries.
We expect its core operations to remain weak and volatile, until China’s economy is back on the upswing, residents regain confidence in the property market, and improved capital markets lead to better valuations on its securities books.
Business Description
AS OF 10 Sep 2025- China CITIC Financial Asset Management (formerly Huarong) is one of the five major state-owned asset management companies in China. It was first set up in 1999 to take over the bad debts of ICBC.
- The AMCs were originally due to be wound up after dealing with these "policy loans" that had come onto the books of the banks under government direction before their commercialisation, but the AMCs found a new role as commercial bad debt managers.
- CITIC AMC was commercialised in 2012 and completed its IPO on the HK stock exchange in 2015. Since then, it expanded its financial services to banking, financial leasing, securities & futures, trust, as well as consumer finance. However, after heavy losses in FY20, the company has divested almost all of its non-core business as directed by the authorities.
- Following the CITIC-led rescue plan and the equity transfer from the Ministry of Finance (MOF) to CITIC, CITIC has become its largest shareholder (26.46%). Other significant shareholders include MOF (24.76%), Zhongbaorongxin (18.08%), Cinda AMC (4.89%), China Life Insurance (4.50%), National Social Security Fund (3.08%), Warburg Pincus (2.57%), and ICBC Financial AM (2.44%). It was renamed to share the "CITIC" brand in Nov-23.
Risk & Catalysts
AS OF 10 Sep 2025CITIC’s support is strong (name change, investment in CEB and CITIC Ltd, subsidiary disposal, new management team, etc.) and more meaningful to the company compared to direct ownership by the government.
Derisking continues with lower property exposure, non-core businesses have largely been disposed of and the company is able to focus on its main DDA business per the guidance of the authorities.
While the company was able to deliver profit growth on the back of CITIC support and its associate interest holdings, core performance remains weak, and there could be continued volatility in the name.
AMCs may find it harder to dispose DDAs at good valuations amid a deceleration economic cycle. Longer holding periods will dampen return yields.
Key Metric
AS OF 10 Sep 2025| CNY mn | FY21 | FY22 | FY23 | FY24 | 1H25 |
|---|---|---|---|---|---|
| ROA | 0.10% | (2.20%) | 0.02% | 0.75% | 1.10% |
| ROE | 1.0% | (49.8%) | 3.6% | 18.4% | 21.1% |
| Total Capital Ratio | 13.0% | 15.1% | 15.1% | 15.7% | 16.0% |
| Leverage Ratio | 14.2x | 16.1x | 11.5x | 10.1x | 8.6x |
| Equity/Assets | 0.0% | 3.1% | 2.9% | 3.7% | 4.0% |
CreditSight View Comment
AS OF 02 Sep 2025CITIC AMC (ex-Huarong) continued to book profits 1H25, helped by investments in three listed SOEs. Core businesses remained weak and volatile, as the company continues to lower valuations on existing DDAs acquired many years ago. Its non-DDA financial assets also have a more volatile performance than peers. CITIC’s support is strong, derisking continues with a meaningful improvement in the provision coverage ratio, non-core businesses have all been cleared, and the company is able to focus on main DDA business per the authorities’ guidance. The capital adequacy ratio has improved meaningfully to 16%, surpassing Cinda. Disclosure remains poor. We expect it to trade ~30 bp wider than CCAMCL.
Recommendation Reviewed: September 02, 2025
Recommendation Changed: July 14, 2025
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Search topics about wealth insights and investments.Export-Import Bank of India
- Sector: Financial Services
- Sub Sector: Financial Services
- Region: India
- Indicative Yield-to-Maturity (YTM): 4.92%
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Fundamental View
AS OF 21 Aug 2025- The Export-Import Bank of India (EXIMBK) was founded in 1982. Its credit standing is built upon the key role it plays in the promotion of India’s cross border trade and investment development, as India’s official export credit agency.
- EXIMBK is 100% owned by the Government of India. Given its crucial policy role, close governmental links and quasi-sovereign status, we view it as inconceivable that the Indian government would fail to provide EXIMBK with support in a timely manner, if needed.
Business Description
AS OF 21 Aug 2025- EXIMBK presently serves as a growth engine for the internationalization efforts of Indian businesses, facilitating the import of technology and export product development, export production, export marketing, pre- and post-shipment, as well as overseas investment.
- As at FY25, EXIMBK's loan portfolio was principally made up of export finance (65%) and term loans to exporters (21%), with the remaining 14% split among the financing of overseas investment, import finance, and export facilitation. 38% come under the policy business/face GOI risk while the remaining 62% are to the commercial business.
- By geography, the bank has a primary exposure of 31% to Africa, 59% to Asia (mainly South Asia), 7% to Europe and the Americas, and the remaining to the rest of the world.
Risk & Catalysts
AS OF 21 Aug 2025- As a quasi-sovereign issuer with backstops from the Government of India and the Reserve Bank of India (RBI), it is viewed as a proxy to the sovereign. Any downgrade to India’s sovereign rating will flow through to EXIMBK as well.
- EXIMBK’s policy role may require it to, at times, take on exposures that could lead to financial losses. This has led to poor asset quality and high impairment charges similar to the public sector commercial banks during the years leading up to the pandemic.
- Capital standing, however, is robust thanks to capital infusions from the Government of India which have been stepped up in recent years – INR 50 bn was injected in FY19, followed by infusions of INR 15 bn and INR 13 bn in FY20 and FY21 respectively. The bank received INR 7.5 bn in FY22 despite capital levels remaining strong during the year. No infusions have been made since FY23 due to the comfortable capital position.
Key Metric
AS OF 21 Aug 2025| INR mn | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Net Interest Margin (Annual) | 1.84% | 2.19% | 2.29% | 2.06% | 1.83% |
| ROAA | 0.19% | 0.54% | 1.04% | 1.43% | 1.58% |
| ROAE | 1.49% | 3.97% | 7.76% | 11.47% | 13.16% |
| Equity/Assets | 13.23% | 14.12% | 12.87% | 12.06% | 11.95% |
| Tier 1 Capital Ratio | 24.0% | 28.6% | 23.7% | 19.6% | 23.9% |
| Gross NPA Ratio | 6.69% | 3.56% | 4.09% | 1.94% | 1.71% |
| Provisions/Loans | 2.46% | 0.90% | 1.24% | 0.29% | (0.32%) |
| Pre-Impairment Operating Profit / Average Assets | 2.13% | 2.31% | 2.41% | 2.12% | 1.83% |
CreditSight View Comment
AS OF 06 Jan 2025Exim Bank of India is the country’s key policy bank with full government support. It provides financial assistance to exporters and importers with a view to promote trade in India. It is 100% owned by the Government of India (GoI) and is a proxy to the India sovereign in international debt markets (quasi-sovereign status). The bank cannot be liquidated without the government’s approval and has a track record of government capital infusions. The bank’s asset quality is back on track after some wobbles in previous years. Capital levels are strong. We maintain a Market perform recommendation on the bank.
Recommendation Reviewed: January 06, 2025
Recommendation Changed: January 04, 2021
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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 Aug 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 working through its risk issues 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 Aug 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 33% consumer, 3% MSME, 29% middle market and 35% corporate at 1Q25. The consumer and MSME book comprises mortgages (45%), auto loans (23%), credit card (23%) and small business loans (9%).
Risk & Catalysts
AS OF 18 Aug 2025Any rating downgrade of the Philippine sovereign would have a negative impact on Security Bank.
Margin pressure from the bank’s earlier weaker deposit franchise is easing with the declining rate environment and growth focus on the higher yielding retail and MSME (business banking) segments. It is now exercising some prudence in retail loan growth given the emergence of stress in credit cards.
Asset quality is showing strains from the brisk growth in riskier segments as we had anticipated. We remain cautious about the asset quality implications given the relatively thin reserve cover and capital buffer.
Capital ratios have fallen due to brisk RWA growth and are now behind peers. We regard this level as low, but do not rule out capital support from MUFG if needed.
Key Metric
AS OF 18 Aug 2025| PHP mn | FY21 | FY22 | FY23 | FY24 | 1H25 |
|---|---|---|---|---|---|
| Net Interest Margin | 4.43% | 4.23% | 4.49% | 4.73% | 4.56% |
| ROA | 1.0% | 1.4% | 1.1% | 1.1% | 1.0% |
| ROE | 5.6% | 8.4% | 7.0% | 8.1% | 8.1% |
| PPP ROA | 2.30% | 2.17% | 1.97% | 2.18% | 2.23% |
| CET1 Ratio | 19.1% | 16.1% | 15.3% | 12.9% | 12.3% |
| Total Equity/Total Assets | 17.88% | 14.94% | 15.62% | 12.50% | 12.80% |
| Gross NPL Ratio | 3.94% | 2.95% | 3.36% | 2.85% | 3.16% |
| Net LDR | 85.7% | 83.0% | 88.8% | 84.6% | 75.0% |
| Liquidity Coverage Ratio | 150% | 144% | 158% | 178% | 194% |
| Net Stable Funding Ratio | 138% | 122% | 131% | 130% | 140% |
CreditSight View Comment
AS OF 19 Aug 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: August 19, 2025
Recommendation Changed: May 21, 2024
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Fundamental View
AS OF 14 Aug 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 14 Aug 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 14 Aug 2025The acquisition of CS will be a long and complex process, and the necessary restructuring is likely to result in losses and costs, although UBS has substantial protection, not least in the large negative goodwill.
Litigation costs have been a feature of UBS’s results in recent years, although it has agreed settlements in various cases recently.
A French court imposed fines and civil damages of €4.5 bn ($5.1 bn) in February 2019, which UBS appealed. The Court of Appeal retried the case de novo in March 2021 and reduced the fine to €3.75 mn plus civil damages of €800 mn and confiscation of €1 bn. UBS has set aside reserves of €1.1 bn. 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 14 Aug 2025| $ mn | 2Q25 | Y24 | Y23 | Y22 | Y21 |
|---|---|---|---|---|---|
| Return On Equity | 10.9% | 6.0% | 38.4% | 13.0% | 12.4% |
| Total Revenues Margin | 3.0% | 3.0% | 2.9% | 3.1% | 3.2% |
| Cost/Income | 80.5% | 84.8% | 95.0% | 72.1% | 73.6% |
| CET1 Ratio (Transitional) | 14.4% | 14.3% | 14.3% | 14.2% | 15.0% |
| CET1 Ratio (Fully-Loaded) | 14.4% | 14.3% | 14.4% | 14.2% | 15.0% |
| Leverage Ratio (Fully-Loaded) | 5.5% | 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 07 Nov 2025We 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: November 07, 2025
Recommendation Changed: August 14, 2024
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Fundamental View
AS OF 13 Aug 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 13 Aug 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 13 Aug 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 seen as 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 13 Aug 2025| $ mn | 2Q25 | Y24 | Y23 | Y22 | Y21 |
|---|---|---|---|---|---|
| Return on Equity | 12.8% | 8.0% | 7.0% | 5.7% | 4.5% |
| Total Revenues Margin | 2.5% | 2.3% | 2.2% | 2.0% | 1.8% |
| Cost/Income | 57.9% | 64.0% | 64.1% | 66.9% | 74.3% |
| CET1 Ratio (Transitional) | 14.3% | 14.2% | 14.1% | 14.0% | 14.1% |
| CET1 Ratio (Fully-Loaded) | 14.3% | 14.2% | 14.1% | 13.9% | 14.1% |
| Leverage Ratio (Fully-Loaded) | 4.7% | 4.8% | 4.7% | 4.8% | 4.9% |
| Loan Impairment Charge | 0.2% | 0.2% | 0.2% | 0.3% | 0.1% |
| Impaired Loans (Gross)/Total Loans | 2.1% | 2.2% | 2.5% | 2.5% | 2.7% |
CreditSight View Comment
AS OF 04 Nov 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: November 04, 2025
Recommendation Changed: April 26, 2023
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Search topics about wealth insights and investments.BMO Financial
- Sector: Financial Services
- Sub Sector: Consumer Finance and Banking
- Region: Canada
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Fundamental View
AS OF 13 Aug 2025BMO is geographically diversified within Canada & via its commercial banking business in the U.S. and is also well-diversified by revenue with contribution from fee income businesses.
Credit has performed worse than peers in 2024, but losses have stabilized in 2025, based on underwriting and risk management changes in recent years as well as seasoning effects.
Business Description
AS OF 13 Aug 2025- BMO Financial Group is the third largest depository institution in Canada with C$1.44 tn in assets as of F2Q25 and a market capitalization of US$77 bn. Total deposits were C$958 bn at F2Q25.
- BMO operates 1,890 branches in Canada and the United States in 2024.
- As of YE24, BMO had 1,013 branches within the United States, mostly in the Midwest. BMO ranked 11th in deposit market share in the U.S. (SNL), with a top-2 share in Illinois.
Risk & Catalysts
AS OF 13 Aug 2025BMO has a strong core deposit base in Canada and in the U.S., which mitigates the potential for a liquidity event. BMO remains well-capitalized relative to requirements with a target CET1 ratio of 12.5% (13.5% at F2Q25).
BMO closed the acquisition of Bank of the West from BNP Paribas in February 2023, significantly expanding its footprint in the U.S. We don’t expect deal integration to have much impact on the credit profile.
We view real estate-related risk in Canada as manageable for BMO given low LTV of exposures in vulnerable markets and conservative underwriting. Commercial real estate accounts for ~10% of total loans, and office is quite manageable at ~1% of total.
Credit trends have largely stabilized in 1H25, while provisions could incrementally increase in 2H25 in light of current macro uncertainties.
BMO’s reserves and capital levels all point to BMO maintaining a conservative balance sheet stance and having flexibility to manage through a more extended period of macro weakness in Canada.
Key Metric
AS OF 13 Aug 2025| $ mn | FY21 | FY22 | FY23 | FY24 | LTM 2Q25 |
|---|---|---|---|---|---|
| Revenue | 20,509 | 26,727 | 21,694 | 24,095 | 25,173 |
| Net Income | 6,167 | 10,519 | 3,291 | 5,380 | 5,935 |
| ROAE | 0.98% | 0.98% | 0.98% | 0.98% | 0.98% |
| NIM | 1.56% | 1.56% | 1.56% | 1.56% | 1.56% |
| Net Charge-offs / Loans | 0.14% | 0.08% | 0.14% | 0.39% | 0.43% |
| Total Assets | 797,018 | 860,451 | 969,851 | 1,011,587 | 1,042,299 |
| Unsecured LT Funding | 51,915 | 64,886 | 63,418 | 115,839 | 118,598 |
| CET1 Ratio (Fully-Phased-In) | 13.7% | 16.7% | 12.5% | 13.6% | 13.5% |
CreditSight View Comment
AS OF 13 Nov 2025We maintain our Market perform for BMO, with our preference within the group remaining to trade up in quality to RBC and TD. Surprising deterioration in asset quality metrics was the story throughout the latter part of F2024, with provisions well above historical average levels. Management has attributed the weakness largely to large wholesale loans to new borrowers originated in 2021, but given the steady climb in reserve coverage as well as changes to risk management and underwriting in recent years, BMO is confident quarterly provision ratios should moderate across F2025 alongside further potential benefits from efficiency initatives. This appeared to be the case thus far with the improvement in credit performance particularly notable in F3Q25.
Recommendation Reviewed: November 13, 2025
Recommendation Changed: August 26, 2020
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Fundamental View
AS OF 25 Jul 2025IBK benefits from a legally binding solvency guarantee from the Korean government and is viewed as a Korean quasi-sovereign issuer. The bank is listed, but remains majority state-owned. Previous governments had proposed privatizing it, but subsequent governments scrapped these plans. The government intends to keep its stake above 50%, and wants IBK to focus on lending to SMEs and provide earlier stage investment capital.
IBK manages the difficult feat of combining its policy role to support Korean SMEs with performance that compares creditably with Korean commercial banks.
Business Description
AS OF 25 Jul 2025- IBK was established under its own Act in 1961 to assist the development of Korea's small business sector. It claims a 24% market share in SME lending.
- It was listed in the early 1990s, but was re-nationalised following heavy losses in the Asian economic crisis of the late 1990s. It was re-listed in 2003, and is majority owned by the government which holds 59.5%; the National Pension Scheme holds 5.6%, and other policy banks have small stakes (7.2% by Korea Development Bank and 1.8% by the Export-Import Bank of Korea).
- Under Article 43 of the IBK Act, if the bank incurs losses they should be set against its reserves and "if the reserves are not sufficient the Government shall assume the remaining loss". Although this is a solvency guarantee and not an explicit guarantee for the timely payment of debts, we believe the Korean government will ensure IBK is in a position to make such timely payments.
Risk & Catalysts
AS OF 25 Jul 2025The bank’s ratings are closely tied to the Korean sovereign’s ratings due to its quasi-sovereign status.
Its ratings and its default risk should therefore not be impacted by any deterioration in its financials, provided the government continues to inject new capital when needed, which it is expected to.
Its policy mandate requires it to use at least 70% of its funding for SMEs. Risks are mitigated by its granular SME exposures which are more than 80% secured, including guarantee from state-owned credit guarantee agencies. Korean governments have also always been quick to provide support including capital injections to IBK when needed, with the most recent injection of KRW 1.3 tn during the COVID.
Key Metric
AS OF 25 Jul 2025| KRW bn | FY21 | FY22 | FY23 | FY24 | 1H25 |
|---|---|---|---|---|---|
| Pre-Provision Operating Profit / Average Assets | 1.30% | 1.49% | 1.59% | 1.39% | 1.34% |
| ROAA | 0.6% | 0.6% | 0.6% | 0.6% | 0.6% |
| ROAE | 9.2% | 9.5% | 8.8% | 8.1% | 8.8% |
| Provisions/Average Loans | 0.34% | 0.50% | 0.67% | 0.52% | 0.44% |
| Nonperforming Loans/Total Loans | 0.85% | 0.85% | 1.05% | 1.34% | 1.37% |
| CET1 Ratio | 11.3% | 11.1% | 11.3% | 11.3% | 11.7% |
| Total Equity/Total Assets | 6.92% | 6.79% | 7.10% | 7.25% | 7.18% |
| NIM | 1.51% | 1.78% | 1.79% | 1.70% | 1.59% |
CreditSight View Comment
AS OF 16 Jun 2025IBK is not wholly government owned – 59.5% direct government ownership, 7.2% KDB and 1.8% KEXIM – but is a policy bank benefiting from a Korean government solvency guarantee. For a policy bank it also has a fairly good track record and manages the difficult feat of combining its policy role to support Korean SMEs with performance that compares creditably with Korean commercial banks. As the leading lender to Korea’s medium and small businesses, IBK plays a key role in the country’s economy, enhanced by the longstanding objective of numerous administrations to achieve a more diversified economy less reliant on the “chaebol”. Successive Korean governments have always been quick to provide support including capital injections to the policy banks when needed.
Recommendation Reviewed: June 16, 2025
Recommendation Changed: March 17, 2017
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Search topics about wealth insights and investments.Siam Commercial Bank
- Sector: Financial Services
- Sub Sector: Banks
- Country: Thailand
- Region: Thailand
- Bond: SCBTB 3.9 24
- Indicative Yield-to-Maturity (YTM): 5.573% (Indicative as of March 2)
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Fundamental View
AS OF 24 Jul 2025Siam Commercial Bank (SCBTB) has been a sound and profitable bank. It has a focus on the retail segment and targets to increase margins by growing its non-traditional banking businesses. It announced a major business overhaul in September 2021 to establish a new parent company called SCB X to segregate the group’s core banking services (Gen 1) from its new fintech and digital businesses and to enable greater flexibility and independence.
Recent credit costs however have been elevated due to the riskier exposure that these entail. However, profitability remains healthy and the capital buffer is strong at both the Holdco (SCB X) and Bank (SCB) level.
Business Description
AS OF 24 Jul 2025- Siam Commercial Bank was founded as the "Book Club" in 1904. In 1907, it started operating as a commercial bank and was renamed as "The Siam Commercial Bank". It completed its IPO on the Stock Exchange of Thailand in 1976.
- The bank is 23.58% owned by the King of Thailand, and a further 23.32% is owned by the Vayupak Fund 1, which is controlled by the government.
- SCB is the fourth largest Thai bank by assets and is known for its robust retail franchise.
- Its loan profile was 36% corporate, 17% SME, and 47% retail as of June 2025.
Risk & Catalysts
AS OF 24 Jul 2025We see a meaningful impact to the Thai economy from potential US tariffs, with ripple effects in the form of lower bank NIMs (as more rate cuts come through to support growth) 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 KBANK, 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.
The group’s business overhaul and strategic direction comes with higher credit costs from the riskier target segments at the Gen2/3 businesses given the challenged macroeconomic environment. Credit costs may rise again in 2026 there is a bad outcome on tariffs. However, SCB X’s higher NIM and low-40%s cost-income ratio should provide comfortable room for that to be absorbed. We also take comfort in the ringfencing of the bank unit (SCB) from the Group’s riskier business units, and management’s minimum CET1 ratio of 16% at SCB.
Loan growth is likely to remain modest in FY25 given a still soft growth outlook for Thailand.
Key Metric
AS OF 24 Jul 2025| THB mn | FY21 | FY22 | FY23 | FY24 | 1H25 |
|---|---|---|---|---|---|
| PPP ROA | 2.63% | 2.50% | 2.88% | 2.87% | 2.97% |
| ROA | 1.1% | 1.1% | 1.3% | 1.3% | 1.4% |
| ROE | 8.4% | 8.3% | 9.3% | 9.1% | 10.4% |
| Equity/Assets | 13.4% | 13.5% | 14.1% | 14.2% | 13.9% |
| CET1 Ratio | 17.6% | 17.7% | 17.6% | 17.7% | 17.8% |
| Reported NPL ratio | 3.79% | 3.34% | 3.44% | 3.37% | 3.31% |
| Provisions/Loans | 1.84% | 1.45% | 1.82% | 1.76% | 1.64% |
| Gross LDR | 93% | 93% | 99% | 97% | 97% |
| Liquidity Coverage Ratio | 202% | 216% | 217% | 212% | n/m |
CreditSight View Comment
AS OF 23 Oct 2025SCB is the 4th largest bank in Thailand and has a leading retail franchise. Asset quality during COVID was poor. It created a new HoldCo structure (SCBX) in 2022 to shift digital units and unsecured retail loans outside the bank, and pledged a >16% CET1 ratio at SCB. The BOT has also ringfenced SCB which further reduces the risk for the SCBTB bonds. The NIM has been strong vs. peers as expected. We expect there to still be a sizable restructured book at SCB, and higher retail exposure amid elevated household debt has resulted in credit costs staying high, but these have been comfortably absorbed. 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 rec.
Recommendation Reviewed: October 23, 2025
Recommendation Changed: April 22, 2025
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Search topics about wealth insights and investments.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 24 Jul 2025- Kasikornbank (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 24 Jul 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 March 2025, the bank's loan mix by segment consists of 41% corporate, 26% SME, 28% retail and 5% others.
- KBank is known for its strong SME franchise. Its focus industries in SME are construction, construction materials, food & beverage, and hardware.
- It partially owns a life insurance company, Muang Thai Life.
Risk & Catalysts
AS OF 24 Jul 2025- We 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 KBANK, 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.
- KBANK still has a higher retail/SME loan mix and sizable restructured loans portfolio (~8.3% of total loans) and so credit costs remain elevated compared to peers, with guidance now revised to 165-170 bp for 2025. Credit costs may rise again in 2026 if there is a bad outcome on tariffs. KBANK’s higher NIM and low-40%s cost-income ratio however should provide comfortable room for that to be absorbed. The focus on safer segments seems is also 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 though currently remains higher than most of its peers.
Key Metric
AS OF 24 Jul 2025| THB mn | FY21 | FY22 | FY23 | FY24 | 1H25 |
|---|---|---|---|---|---|
| PPP ROA | 2.38% | 2.36% | 2.52% | 2.60% | 2.61% |
| ROA | 0.98% | 0.86% | 0.99% | 1.14% | 1.21% |
| ROAE | 8.3% | 7.3% | 8.2% | 8.9% | 9.2% |
| Equity / Assets | 13.1% | 13.4% | 13.9% | 14.9% | 15.0% |
| CET1 Ratio | 15.5% | 15.9% | 16.5% | 17.4% | 17.7% |
| Gross NPL ratio | 3.76% | 3.19% | 3.19% | 3.20% | 3.18% |
| Provisions / Loans | 1.73% | 2.11% | 2.08% | 1.90% | 1.62% |
| Gross LDR | 93% | 91% | 92% | 91% | 89% |
| 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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