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Sub-sector: Banks
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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Fundamental View
AS OF 12 Nov 2025UOB has solid stand-alone credit profile and benefits from the high likelihood of support from the government of Singapore, where it is one of the three major local banks.
The bank is more focused on Singapore and Southeast Asia than on Greater China; its traditional strengths are the SME and retail sectors, although its large corporate book is now over 60% of loans.
UOB has been conservatively managed with a sound risk profile, a strong focus on liquidity and a long track record of relatively good performance. However, its 3Q25 results showed some softness with substantial provisions set aside for HK and US CRE.
Business Description
AS OF 12 Nov 2025- UOB was established in 1935 as a Chinese family-owned bank catering to the Hokkien (Fujian) community, Singapore's largest Chinese ethnic sub-group. The Wee family owns about 18% of the shares. A further 5.2% is held by the Lien family which previously controlled Overseas Union Bank, which UOB merged within 2001. The Wee family has significant real estate and hospitality interests in Singapore and regionally.
- UOB's main markets are Singapore and Malaysia where its presence dates back to before Singapore's independence. It expanded through acquisitions in Thailand (Bank Radanasin and Bank of Asia) and Indonesia (Bank Buana), and more recently bought over Citi's consumer franchise in Malaysia, Thailand, Indonesia and Vietnam.
- Franchise strengths are in SME and consumer lending. Building & construction accounts for 27% of loans, followed by housing at 24%, financial institutions at 11% and general commerce at 11% at 2Q25.
- Loans by geography comprise Singapore at 50% of loans, Greater China at 14%, Malaysia at 10%, Thailand at 8%, and Indonesia at 3% at 2Q25.
Risk & Catalysts
AS OF 12 Nov 2025UOB has a greater focus on Southeast Asia than its Singapore bank peers, which leaves it open to more asset quality risk in a downturn / high interest rate environment. It has 8% of its loan book in Thailand, where we are cautious about macroeconomic conditions.
The bank has benefited more from the final Basel III rules implementation than its peers – its CET 1 ratio was previously the lowest among the three but now aligns with peers.
It posted a large profit decline in 3Q25 which was a negative surprise. Although the improved coverage ratios following the preemptive provision recognition are welcome, its NPL coverage ratio remains 40-60 ppt behind peers, and we did not find reassurance from its credit cost outlook. Topline performance also lagged peers.
Key Metric
AS OF 12 Nov 2025| SGD mn | FY21 | FY22 | FY23 | FY24 | 9M25 |
|---|---|---|---|---|---|
| PPP ROA | 1.23% | 1.31% | 1.52% | 1.51% | 1.44% |
| ROA | 0.92% | 0.99% | 1.19% | 1.19% | 0.81% |
| ROE | 10.2% | 11.9% | 14.2% | 13.7% | 9.0% |
| Equity to Assets | 9.3% | 8.6% | 8.8% | 9.2% | 8.9% |
| CET1 Ratio (fully-loaded) | 13.5% | 13.3% | 13.4% | 15.4% | 14.5% |
| NPL Ratio | 1.62% | 1.58% | 1.52% | 1.53% | 1.60% |
| Provisions / Loans | 0.20% | 0.20% | 0.25% | 0.27% | 0.68% |
| Liquidity Coverage Ratio | 133% | 147% | 158% | 143% | 142% |
| Net Stable Funding Ratio | 116% | 116% | 120% | 116% | 116% |
CreditSight View Comment
AS OF 07 Nov 2025UOB is conservatively run with a large family ownership and a sound balance sheet. The bank is more focused on SG and Southeast Asia than on Greater China. Outside SG, its main operations in ASEAN are in Thailand, Malaysia and Indonesia which collectively make up ~20% of its loan book. It acquired Citi’s consumer operations in Thailand, Malaysia, Indonesia and Vietnam, which has been good for the franchise. The bank has benefitted more from the final Basel III rules implementation than its peers but it has lost this advantage again since 3Q25. The substantial preemptive provisions taken in 3Q25 to strengthen coverage ratios heavily hit the bank’s 3Q25 results, but UOB’s NPL coverage ratio remained 40-60 ppt behind the two peers. New NPAs have risen due to its CRE exposure in HK and the US.
Recommendation Reviewed: November 07, 2025
Recommendation Changed: July 04, 2017
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Fundamental View
AS OF 07 Nov 2025BDO Unibank (BDO) is the largest bank in the Philippines in terms of assets & market share.
Given its size and systemic importance, BDO is considered too big to fail and is strongly likely to be supported by its controlling shareholder SM Investments, as well as the Philippine government in times of stress.
BDO is widely viewed as the soundest bank in the country given its strong fundamentals, well-diversified businesses, and good management.
Business Description
AS OF 07 Nov 2025- BDO Unibank was established as Acme Savings Bank in 1968, and was then acquired by SM Investments in 1976. It became a commercial bank in 1994 and a universal bank in 1996.
- BDO was listed in May 2002. SM Investments remains the bank's largest shareholder with a 41% stake.
- BDO has expanded through a series of M&As. Among its key transactions, it merged with Dao Heng Bank Philippines in 2001, Banco Santander Philippines in 2003, UOB Philippines in 2005, Equitable PCI Bank in 2007, GE Money Bank in 2009, Citibank Savings, DB Trust and Real Bank in 2014, One Network Bank in 2015 (the largest rural bank in the Philippines), and RB Pandi's banking business in 2019. It also acquired the insurance business of Generali in the Philippines in 2016.
- BDO has the largest distribution network in the country and is ranked the largest bank in terms of consolidated resources, total assets, loans, deposits and trust funds under management.
- Its loan book was split 51% large corporates, 24% middle market, and 25% consumer at 2Q25. 41% of the consumer book comprised mortgages, 29% credit cards, 13% auto loans and the remaining personal loans (13%) and others (5%).
Risk & Catalysts
AS OF 07 Nov 2025Direct impact from US tariffs is limited given that the Philippines is not a major goods exporter, but there is likely to be some second order effects from a slowdown in regional and global growth.
We anticipate a negative impact to loan and GDP growth from the recent public infrastructure spending corruption scandal, which will slow government spending and private investments for the next couple of quarters. Further BSP rate cuts are likely in order to support growth, which will put downward pressure on the NIM.
We see few asset quality risks for BDO given a comfortable NPL cover (3Q25: 134%) and build up of the CET1 ratio (3Q25: 14.4%), as well as BDO’s large corporates book (~50% of total loans) and underwriting track record.
Any rating downgrade of the Philippine sovereign would negatively impact BDO.
Key Metric
AS OF 07 Nov 2025| PHP mn | FY21 | FY22 | FY23 | FY24 | 9M25 |
|---|---|---|---|---|---|
| NIM | 4.05% | 4.14% | 4.37% | 4.35% | 4.29% |
| Reported ROA (Cumulative) | 1.2% | 1.5% | 1.7% | 1.8% | 1.7% |
| Reported ROE (Cumulative) | 10.4% | 13.0% | 15.2% | 15.1% | 14.1% |
| Equity/Assets | 11.7% | 11.3% | 11.5% | 11.8% | 11.9% |
| CET1 Ratio | 13.6% | 13.4% | 13.8% | 14.1% | 14.4% |
| NPL ratio | 2.8% | 2.0% | 1.9% | 1.8% | 1.8% |
| Provisions/Loans | 0.72% | 0.64% | 0.59% | 0.46% | 0.44% |
| PPP ROA | 2.1% | 2.3% | 2.7% | 2.5% | 2.4% |
| Liquidity Coverage Ratio | 145% | 141% | 123% | 132% | 143% |
| Net Stable Funding Ratio | 124% | 124% | 124% | 122% | n/m |
CreditSight View Comment
AS OF 19 Nov 2025BDO is the largest bank in the Philippines. Management is well-regarded, the business is well-diversified and it is the market leader in many business lines. The NIM has peaked with the turn in policy rates, but non-interest income is close to a third of operating income given good fee generation and overall core profitability is strong. We remain comfortable with BDO given the large corporate book and comfortable NPL cover, as well as underwriting track record, which provide comfort around the recently robust growth in retail loans. Capital has also been steadily built up with the CET1 ratio at 14.4% at 3Q25. BDO’s sole $ bond likely has low trading liquidity and hence limited opportunity for RV play given the short less than a year to maturity in Jan-26.
Recommendation Reviewed: November 19, 2025
Recommendation Changed: November 28, 2023
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Search topics about wealth insights and investments.Woori Financial Group
- Sector: Financial Services
- Sub Sector: Banks
- Country: Korea
- Bond: WOORIB 4.875 28
- Indicative Yield-to-Maturity (YTM): 5.108% (Indicative as of March 2)
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Fundamental View
AS OF 05 Nov 2025Woori FG’s performance record had been less consistent than some of its more commercially focused peers but improved in FY21-22. Its FY23 performance lagged behind its peers, but FY24 profit growth was peer-leading, partially thanks to not having the ELS compensation issue which hit the other three FGs in 1Q24. 9M25 performance was softer again due to several one-offs.
Asset quality used to be a strength with the lowest NPL ratios and credit costs among the four FGs but has deteriorated since 2Q23, and we no longer see a gap with the other FGs.
Capital standing is a relative weakness but is closer than ever before to that of its peers on the back of active portfolio management.
Business Description
AS OF 05 Nov 2025- Woori's predecessor banks were rescued by the Korea Deposit Insurance Corporation (KDIC) following the 1997 Asian Financial Crisis.
- Woori Bank is one of Korea's 'Big Four' commercial banks. It previously owned two regional banks, Kwangju and Kyongnam, but these were spun off in 2014. Woori also sold its stake in Woori Investment Securities and its savings bank and life insurance arms to NH Financial Group.
- Woori set up a HoldCo (Woori FG) in January 2019 to expand into more diversified business lines, particularly investment banking. It used to have a HoldCo, but it was dissolved in 2014 when it was merged with Woori Bank.
- Its main subsidiaries are 100%-owned Woori Card, Woori Financial Capital (auto leasing), Woori Investment Bank and 72.3%-owned Woori Asset Trust. In August 2024, the group relaunched securities business by acquiring Korea Foss Securities and merging it with Woori Investment. The group also acquired a 75.34% stake in Tongyang Life and full ownership of ABL Life and has consolidated them since 1 July 2025.
Risk & Catalysts
AS OF 05 Nov 2025Woori FG was for many years majority-owned by the Korean government via the Deposit Insurance Corporation (KDIC), but KDIC has steadily sold down its shareholding, and Woori purchased and cancelled the remaining shares in 2024. That said, Woori FG remains a large, systemically important bank with strong potential government backing if needed.
Woori FG is less diversified than KB and Shinhan, with most of its earnings coming from the bank and small contributions from the card and leasing businesses. The group has accelerated its M&A pace since 2024; it relaunched securities business and acquired two insurance companies. However, It will likely take more time than expected for the new non-banking segments to make a meaningful contribution to the group.
Loan growth is expected to be more challenging given tighter regulation on mortgage lending.
Key Metric
AS OF 05 Nov 2025| KRW bn | FY21 | FY22 | FY23 | FY24 | 9M25 |
|---|---|---|---|---|---|
| Pre-Provision Profit ROA | 0.99% | 1.15% | 1.10% | 1.17% | 1.07% |
| ROA | 0.66% | 0.70% | 0.54% | 0.61% | 0.71% |
| ROE | 10.6% | 11.5% | 8.3% | 9.3% | 10.9% |
| Provisions/Loans | 0.17% | 0.26% | 0.53% | 0.45% | 0.52% |
| NPL Ratio | 0.30% | 0.31% | 0.35% | 0.57% | 0.70% |
| Woori Bank CET1 Ratio | 13.0% | 12.7% | 13.2% | 13.1% | 14.5% |
| Equity/Assets | 6.45% | 6.58% | 6.71% | 6.83% | 6.33% |
| Net Interest Margin Bank + Card | 1.62% | 1.84% | 1.82% | 1.70% | 1.72% |
CreditSight View Comment
AS OF 31 Oct 2025Woori FG was for some years the weakest of Korea’s Big 4 Financial Groups. Operating performance had shown an improvement for a few years but disappointed in FY23. FY24 results were peer-leading, mainly supported by non-interest income, but 9M25 results lagged again (excl. purchase gains). The group has been seeking opportunities to expand its non-bank businesses. Its new securities entity launched in Aug-24 and the acquisition of two insurance companies were completed in Jul-25. Both the group and the bank CET1 ratios are behind peers, but a strong improvement from earlier. The bank LCR is low at ~107% and NSFR is acceptable at ~112%. We have a M/P recommendation based on senior ’29 trading levels. As a systemically important bank, government support is assured.
Recommendation Reviewed: October 31, 2025
Recommendation Changed: April 24, 2017
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Fundamental View
AS OF 05 Nov 2025Shinhan FG was the best-managed of the large Korean financial groups over many years. During the Asian Financial Crisis, it took advantage of the opportunity to acquire competitors and other businesses, increasing its scale and expanding its business lines.
Its performance has been more variable in the past few years. After a bumpy 2020, it had a better FY21 and FY22, thanks to rising interest rates. However, operating performance turned weak again in FY23, and its FY24 profit growth was softer than peers, impacted by non-bank performance. 9M25 witnessed some improvement.
In addition to owning a Big 4 bank in Korea, Shinhan FG also has a diversified non-banking business portfolio, including a leading credit card company and a top 10 securities firm.
Business Description
AS OF 05 Nov 2025- Shinhan Financial Group (Shinhan FG) is one of Korea's most diversified financial groups and the holding company of the second largest Korean bank - Shinhan Bank. It also has credit cards, securities, asset management and insurance subsidiaries.
- Shinhan Bank was set up in 1982 with seed capital from Korean residents in Japan. It was more professionally managed than the heavily politicised older banks and came through the 1997 Asian Financial Crisis in relatively good shape, taking the opportunity to acquire the larger and much longer-established Chohung Bank in 2003.
- In 2007, it made another timely acquisition, buying LG Card from its creditors after it failed during the 2003 Korean consumer lending crisis. Shinhan Card is the largest card issuer in Korea.
- Shinhan is also looking for overseas opportunities where growth is strong and Korean businesses have a presence, with a focus on Vietnam (where Shinhan Card also bought a consumer finance business in 2019) and Indonesia.
Risk & Catalysts
AS OF 05 Nov 2025As one of Korea’s “Big Four” financial groups, we believe Shinhan FG would likely receive governmental support if needed.
Asset quality pressure has been rising from domestic real estate project financing at non-bank subsidiaries, with credit costs rising from very low levels.
Loan growth is expected to be more challenging given tighter regulation on mortgage lending like its peers.
Profit growth may encounter challenges if there is volatility in the KRW, which could lead to significant FX losses.
Key Metric
AS OF 05 Nov 2025| KRW bn | FY21 | FY22 | FY23 | FY24 | 9M25 |
|---|---|---|---|---|---|
| Pre-Provision Profit ROA | 1.11% | 1.10% | 1.23% | 1.19% | 1.30% |
| ROA | 0.66% | 0.72% | 0.66% | 0.63% | 0.80% |
| ROE | 9.2% | 10.0% | 8.6% | 8.4% | 11.1% |
| Provisions/Average Loans | 0.28% | 0.34% | 0.57% | 0.51% | 0.41% |
| NPL Ratio | 0.39% | 0.41% | 0.56% | 0.71% | 0.76% |
| CET1 Ratio | 13.10% | 12.79% | 13.17% | 13.02% | 13.56% |
| Equity/Assets | 7.3% | 7.6% | 7.8% | 7.6% | 7.4% |
| Net Interest Margin | 1.81% | 1.96% | 1.97% | 1.93% | 1.90% |
CreditSight View Comment
AS OF 31 Oct 2025Shinhan FG is one of the four nation-wide commercial banking groups in Korea, with a leading credit card arm. As a systemically important bank, government support is assured. It had over many years the best operating track record, but lost its way and KB and Hana caught up; its performance was inconsistent for a few years but has improved recently. Its 9M25 returns remained high and just behind KBFG. Its CET 1 ratio was also slightly behind KBFG but leading the other two peers. The bank LCR is low at ~105% and NSFR is acceptable at ~111%. It NPL coverage ratio has declined but still decent at 124%, and it plans to lower the CET 1 ratio to slightly above 13%. We are downgrading it to U/P on tight valuations.
Recommendation Reviewed: October 31, 2025
Recommendation Changed: October 31, 2025
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Fundamental View
AS OF 05 Nov 2025Hana Financial Group (Hana FG) struggled for several years to make its acquisition of the former Korea Exchange Bank a success, but results improved dramatically in 2015 as revenues grew and cost efficiencies improved. It has produced strong results since 2020.
The group is looking for inorganic growth in its non-bank businesses as it has fallen behind Shinhan FG and KBFG in this area, but has so far shied away from a large acquisition.
Hana Bank has the highest CET 1 ratio among the Korean Big 4 banks.
Business Description
AS OF 05 Nov 2025- Hana FG is the third-largest financial group in South Korea. From small origins as a finance company in the 1970s, after the 1997 Asian crisis, Hana grew by acquiring three other banks, including the much older Seoul Bank, which had a banking and trust management business.
- Hana FG bought Korea Exchange Bank (KEB) from Lone Star in 2012 after overcoming many hurdles, but due to staff union opposition, it could not merge with Hana Bank until 2015.
- Hana FG's overseas business is smaller than its peers, and is complemented by KEB's extensive international operations. KEB was started in 1967 as a government-owned bank specializing in foreign exchange. It had a leading share in FX transactions and trade finance among Korean banks.
- Hana FG has shown good growth in its credit card and securities non-bank businesses, but is less diversified than its larger peers KB and Shinhan, which have also acquired insurance companies. Its latest acquisition (in 2019) was a 15% stake in Vietnam's state-owned Bank for Investment & Development (BIDV). In 2023, Hana FG decided not to proceed with the acquisition of KDB Life Insurance after two months of due diligence.
Risk & Catalysts
AS OF 05 Nov 2025Hana FG’s credit costs at ~30 bp in FY24 and 9M25 were lower than peers (in the range of 46-52 bp). However, the group’s NPL coverage ratio was also ~20-30 ppt behind peers.
NIMs are lower than those of KB and Shinhan at both the group and bank levels. The profit contribution from non-bank entities to group profits is also lagging behind these two peers. Both metrics are comparable to Woori’s.
Non-banking businesses have underperformed in recent years, with profit contributions falling from 20–30% in 2019–2021 to around 10%, primarily due to elevated provisions for domestic real estate project financing and valuation losses related to overseas commercial real estate.
Loan growth is expected to be more challenging given tighter regulation on mortgage lending.
Key Metric
AS OF 05 Nov 2025| KRW bn | FY21 | FY22 | FY23 | FY24 | 9M25 |
|---|---|---|---|---|---|
| Pre-Provision Profit ROA | 1.07% | 1.10% | 1.11% | 1.00% | 1.11% |
| ROA | 0.74% | 0.66% | 0.59% | 0.61% | 0.72% |
| ROE | 10.9% | 10.1% | 9.0% | 9.1% | 10.6% |
| Provisions/Loans | 0.16% | 0.34% | 0.46% | 0.32% | 0.29% |
| NPL Ratio | 0.32% | 0.34% | 0.50% | 0.62% | 0.73% |
| CET1 Ratio | 13.8% | 13.2% | 13.2% | 13.2% | 13.3% |
| Equity/Assets | 6.8% | 6.4% | 6.6% | 6.7% | 6.7% |
| Net Interest Margin | 1.66% | 1.83% | 1.82% | 1.69% | 1.72% |
CreditSight View Comment
AS OF 31 Oct 2025Hana FG grew through acquisitions but only in 2015 was it able to merge its two main bank units to form KEB-Hana Bank. Hana’s management has a good record but for some years struggled to extract value from its acquisitions. Its performance for the past few years has generally been strong. More focus has been put on RWA management and capital enhancement since 2H24. There is potential for further improvements in the non-bank segment. Hana’s credit costs were lower than those of its peers, but this has also resulted in the lowest NPL coverage ratio at ~105% among the four FGs. The bank LCR and NSFR are low at 106-107%. The group aims to maintain a CET1 ratio of 13-13.5%. We are downgrading it to U/P on tight valuations.
Recommendation Reviewed: October 31, 2025
Recommendation Changed: October 31, 2025
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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 21 Oct 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, and asset quality is strong.
Business Description
AS OF 21 Oct 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 couple of decades, CBA consolidated its position as the leading bank in Australia with a 24-28% share in household deposits and lending, helped by its acquisition of Bank of Western Australia during the 2008 crisis.
- In New Zealand it owns ASB Bank, but otherwise has been selling non-core assets, including its life insurance business.
Risk & Catalysts
AS OF 21 Oct 2025CBA’s financial health is closely linked to the Australian economy, in particular retail credit quality, mainly housing loans. Household confidence is improving, but they continue to be stretched; discretionary consumer spend is improving though on growth in real disposable incomes. Unemployment continues to be comfortable.
Earnings/NIMs are under pressure from strong mortgage market and deposit competition. Business banking growth however has been stellar and highly profitable.
The interest rate cuts coming through from the RBA will improve borrowers’ ability to make interest payments.
Key Metric
AS OF 21 Oct 2025| AUD mn | Y22 | Y23 | Y24 | Y25 |
|---|---|---|---|---|
| Return on Equity | 12.7% | 14.0% | 13.6% | 13.5% |
| Total Revenues Margin | 2.1% | 2.2% | 2.2% | 2.2% |
| Cost/Income | 46.3% | 43.7% | 45.0% | 45.7% |
| APRA CET1 Ratio | 11.5% | 12.2% | 12.3% | 12.3% |
| International CET1 Ratio | 18.6% | 19.1% | 19.1% | 20.9% |
| APRA Leverage Ratio | 5.2% | 5.1% | 5.0% | 4.7% |
| Impairment Charge/Avg Loans | (0.0%) | 0.1% | 0.1% | 0.1% |
| Gross Impaired Loans/Total Loans | n/m | 0.8% | 1.0% | 1.1% |
| Liquidity Coverage Ratio | 130% | 131% | 136% | 130% |
| Net Stable Funding Ratio | 130% | 124% | 116% | 115% |
CreditSight View Comment
AS OF 11 Nov 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. It has the highest NIM amongst the Aussie banks. 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: November 11, 2025
Recommendation Changed: October 05, 2016
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