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Sector: Financial Services
The Export-Import Bank of Korea
- Sector: Financial Services
- Sub Sector: Banks
- Region: Korea
- Bond: EIBKOR 5.125 33
- Indicative Yield-to-Maturity (YTM): 4.55%
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Fundamental View
AS OF 23 Jul 2025KEXIM is a pure policy bank that is directly and indirectly wholly owned by the government of the Republic of Korea, which is obliged under Article 37 of the Export-Import Bank of Korea Act to fund any losses that cannot be covered by the bank’s reserves.
While this is a solvency guarantee and does not explicitly guarantee the timely repayment of debt, we view it as inconceivable that the Korean authorities would fail to provide KEXIM with support in a timely manner, should this be needed, given its crucial policy role and close government links.
Business Description
AS OF 23 Jul 2025- KEXIM was set up in 1976 to support Korean companies in their overseas business through export credit guarantee programs, as well as providing finance for imports and for overseas investment. It provides funding for both short term trade and long term investment, and manages two government-entrusted funds: the Economic Development Cooperation Fund (EDCF), a Korean official development assistance program, and the Inter-Korean Cooperation Fund (IKCF), an economic cooperation program to promote exchanges with North Korea. It is also a conduit through which the government doled out COVID-19 assistance to affected companies.
- Till 2030, KEXIM aims to preferentially focus on seven sectors (hydrogen energy, wind and solar power, rechargeable battery and energy storage systems (ESS), future mobility, 5G and next-generation semiconductors, pharmaceutical and healthcare, and digital technology and cultural content) which are considered new growth drivers of the Korean economy. It has historically focused on the shipbuilding and engineering & construction industries.
- KEXIM is 100% owned by the Korean government: 76% directly and the remainder through stakes held by the Bank of Korea (7%) and Korea Development Bank (17%). In contrast to peer policy banks IBK and KDB, KEXIM has remained more consistently a policy bank but its role has been adjusted to ensure it complements rather than competes with the Korean commercial banks.
Risk & Catalysts
AS OF 23 Jul 2025Previous Korean governments have made moves to privatise the other policy banks, but KEXIM has retained its policy bank role and government ownership, which are not likely to change.
Korea’s shipbuilders have long been the largest users of KEXIM’s services. Losses on exposure to the sector, in particular Daewoo Shipbuilding (DSME), pushed KEXIM into the red in 2016 but the government injected capital and its condition has recovered.
Together with KDB, KEXIM has played a key role in helping corporate Korea survive the COVID-19 induced crisis.
Key Metric
AS OF 23 Jul 2025| KRW bn | FY20 | FY21 | FY22 | FY23 | FY24 |
|---|---|---|---|---|---|
| Pre-Impairment Operating Profit / Average Assets | 1.2% | 1.1% | 1.1% | 1.1% | 1.1% |
| ROAA | 0.1% | 0.5% | 0.4% | 0.6% | 0.8% |
| ROAE | 0.7% | 3.2% | 2.7% | 4.7% | 5.2% |
| Provisions/Average Loans | 1.2% | 0.5% | 0.8% | 0.3% | 0.1% |
| Nonperforming Loans/Total Loans | 1.8% | 1.9% | 1.2% | 0.7% | 0.9% |
| CET1 Ratio | 13.4% | 13.3% | 11.8% | 12.9% | 13.9% |
| Total Equity/Total Assets | 14.8% | 15.1% | 12.6% | 14.3% | 16.3% |
| Net Interest Margin (NIR/Ave Assets) | 0.9% | 0.9% | 0.9% | 0.7% | 0.6% |
CreditSight View Comment
AS OF 15 Sep 2025KEXIM is a wholly government owned policy bank benefiting from a Korean government solvency guarantee. It plays a key role in financing large-ticket exports in particular ships and large-scale overseas engineering projects. Its credit exposures include some industry and borrower concentrations especially to Korea’s shipbuilders and its financial performance has at times suffered. But the Korean government has always acted in a timely manner to endure its solvency, and with this strong backing we view it as a sound credit. We view its secondary levels as in line with where we would expect it to trade, and so continue with our Market perform recommendation.
Recommendation Reviewed: September 15, 2025
Recommendation Changed: September 22, 2020
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Fundamental View
AS OF 23 Jul 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 23 Jul 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 F1Q26.
- The bank has well regarded life insurance (ICICI Prudential) and general insurance (ICICI Lombard) businesses.
Risk & Catalysts
AS OF 23 Jul 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. Rate cuts will impact the NIM in FY26, but treasury gains provide some offset. Loan growth has been slow for the sector as a whole despite improved system liquidity; the hope is for rate cuts to drive a pickup in loan growth.
We are cautious about Indian unsecured retail and microfinance given a stretched urban middle and lower-middle class consumer by earlier high inflation and interest costs. ICICI’s prudence towards the segment than peers however is 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 23 Jul 2025| INR bn | FY22 | FY23 | FY24 | FY25 | 1Q26 |
|---|---|---|---|---|---|
| NIM | 3.96% | 4.48% | 4.53% | 4.32% | 4.34% |
| ROAA | 1.77% | 2.13% | 2.37% | 2.37% | 2.41% |
| ROAE | 14.7% | 17.2% | 18.7% | 17.9% | 17.2% |
| Equity/Assets | 12.1% | 12.6% | 12.7% | 13.7% | 14.3% |
| CET1 Ratio | 17.3% | 16.9% | 15.4% | 15.8% | 15.5% |
| Gross NPA Ratio | 3.60% | 2.81% | 2.16% | 1.67% | 1.67% |
| Provisions/Loans | 0.97% | 0.65% | 0.30% | 0.34% | 0.50% |
| PPP ROA | 2.97% | 3.28% | 3.36% | 3.37% | 3.54% |
CreditSight View Comment
AS OF 23 Jul 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. The senior looks wide but we have ICICI on M/P due to likely low trading liquidity.
Recommendation Reviewed: July 23, 2025
Recommendation Changed: December 07, 2020
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Fundamental View
AS OF 26 Jun 2025Macquarie was tested during the global financial crisis, but managed to steer through the crisis without reporting losses. A strong balance sheet mitigated liquidity problems, but its banking unit had to turn to Australia’s central bank at that time for support.
The group has an impressive track record of managing risks and achieving good returns, and has built capabilities in a number of areas. Divestments are controlled based on market conditions. It was a beneficiary of market volatility in the commodity space in F23-24. Its Australian mortgage book has also shown strong but sensible growth.
Business Description
AS OF 26 Jun 2025- Macquarie grew out of the Australian business of Hill Samuel Australia, commencing operations in 1969. Macquarie Group Ltd (MGL) is the holding company and listed entity, under which there is the banking group Macquarie Bank Ltd (MBL) which consists of the Banking & Financial Services (BFS) and Commodities & Global Markets (CGM) businesses, and a non-banking group which consists of the Macquarie Asset Management (MAM) and Macquarie Capital (MC) businesses.
- From the 1990s, the group has been associated with the "Macquarie Model" which focused on identifying cash-generating infrastructure assets & packaging them into funds that could be sold, with Macquarie taking fees as banker, arranger and asset manager.
- It acquired asset managers including Delaware Investments in the US and Blackmont Capital in Canada, boutique investment bank Fox-Pitt Kelton and specialists such as Tristone Energy (Canada). It acquired US asset manager, Waddell & Reed in April 2021, which added around US$76 bn of assets under management. It has announced the sale of its public AM business in the US and Europe to Nomura.
- MAM has AUM of ~A$941 bn as of FY25, mostly in "traditional" funds management but also including its specialist infrastructure and real assets funds.
Risk & Catalysts
AS OF 26 Jun 2025Macquarie has sizable exposures to credit and equity risk, and so could be adversely impacted by falls in asset prices. In addition, volatile/weak markets could and has impeded its ability to exit some of its investments. Its earnings profile partially depends on exits and therefore is lumpy in nature. So far it has managed this risk well.
As a relatively small group operating mainly in wholesale markets, it is vulnerable to a liquidity freeze, but it mitigates this through running a well-matched and liquid balance sheet.
It is a global leader in infrastructure investments and is well positioned for the green transition. It has been a strong beneficiary of volatility in commodity markets, a testament to its risk management capabilities.
Its banking unit, MBL, has been subject to enforcement action in Apr-21 by APRA over the incorrect treatment of some intra-group funding arrangements resulting in a A$500 mn operational risk overlay being applied as well as LCR and NSFR add-ons.
Key Metric
AS OF 26 Jun 2025| AUD mn | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Operating Income | 13,298 | 17,833 | 19,576 | 17,071 | 18,130 |
| Cost/Income | 66.7% | 60.5% | 62.0% | 71.4% | 70.5% |
| Net Profit | 3,015 | 4,706 | 5,182 | 3,522 | 3,715 |
| Return on Equity | 14.3% | 18.7% | 16.9% | 10.8% | 11.2% |
| Total Impairments/Op Profit | 11.8% | 7.2% | 6.1% | (7.4%) | 6.0% |
| Annuity Business Profit Contribution | 46.7% | 42.6% | 34.2% | 36.5% | 43.6% |
| MBL CET1 Ratio (APRA) | 12.6% | 11.5% | 13.7% | 13.6% | 12.8% |
| MBL Liquidity Coverage Ratio | 174% | 175% | 214% | 191% | 175% |
| MBL Net Stable Funding Ratio | 115% | 121% | 124% | 115% | 113% |
CreditSight View Comment
AS OF 04 Aug 2025Macquarie has a strong record of profitability since its inception. Its AM business focused on infrastructure, including green assets, is a global leader. It manages risks and returns effectively, and in FY22+23 was a large beneficiary of O&G and power price volatility. The Aus banking business has steadily gained mortgage marketshare. Large investment disposals from AM and Macquarie Capital led to a record year in FY22; strong commodities outperformance led to another record in FY23. FY24 income was affected by asset realisations and gas & power income. FY25 was helped by asset sales, but 1Q net income was lower YoY. Capital is adequate, ALM conservative, and being APRA regulated (at bank) is a plus. However, senior spreads at both bank and group are tight. Fines from ASIC are imminent.
Recommendation Reviewed: August 04, 2025
Recommendation Changed: August 04, 2025
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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 16 Jun 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 ~57% 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 16 Jun 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 56.92% 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 42% retail, 34% corporates, ~14% SMEs and ~10% to the agri segment as of end-March 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 16 Jun 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.
Rate cuts will feed through to the NIM in FY26, but improved system liquidity will provide some support for the NIM and loan growth.
Asset quality is trending well despite a stretched urban middle and lower-middle class consumer class, as SBI’s personal unsecured loans book is ~95% to salaried employees of top tier corporates and the government.
Management announced plans for an INR 250 bn equity fundraise in FY26, which would provide an around 0.6 ppt boost to capital ratios at the consolidated level on a pro-forma basis.
Key Metric
AS OF 16 Jun 2025| INR mn | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| NIM | 3.04% | 3.12% | 3.37% | 3.28% | 3.09% |
| ROAA | 0.48% | 0.67% | 0.96% | 1.04% | 1.10% |
| ROAE | 8.4% | 11.9% | 16.5% | 17.3% | 17.3% |
| Equity to Assets | 5.6% | 5.6% | 5.9% | 6.1% | 6.6% |
| CET1 Ratio | 10.3% | 10.3% | 10.6% | 10.6% | 11.1% |
| Gross NPA Ratio | 4.98% | 3.97% | 2.78% | 2.24% | 1.82% |
| Provisions/Loans | 1.77% | 0.91% | 0.54% | 0.14% | 0.38% |
| PPP ROA | 1.65% | 1.58% | 1.59% | 1.60% | 1.72% |
CreditSight View Comment
AS OF 02 Sep 2025SBI is India’s largest bank and a well-run franchise. Government support 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 provide some offset. Loan growth has been off to a slow start for the sector, but comfortable system liquidity should provide some support. We like the name, but have it on M/P as it trades fair.
Recommendation Reviewed: September 02, 2025
Recommendation Changed: April 25, 2025
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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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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.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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