Financial Industry 08 (Aug 23 - Dec 26)

[behappyalways]

On the left we have the Great Financial Crisis of 2008

On the right we have WTF DO WE CALL THIS
https://x.com/ValEricaorAmy/status/1830514684585214006

[behappyalways]

This is one reason we haven't seen more aggressive rate cuts from the PBoC in China.
https://x.com/AyeshaTariq/status/1831293159214620950

[winston]

<Research>UOB Kay Hian Says CN Banks Interim Earnings Generally in Line; Top Pick CM BANK (03968.HK)

UOB Kay Hian commented in its recent report that the 1H24 earnings of Chinese banks were largely in line with expectations.

The broker estimated that the cumulative reduction in mortgage rates by 80 bps will impact next year's earnings of Chinese banks by 6.5 bps or 9.2%.

UOB Kay Hian maintained an Overweight rating on Chinese banks, noting that macro headwinds and the mortgage repricing news could affect stock prices.

However, after the recent correction, the valuation of such stocks has been depressed and the dividend yields rebounded, which may bring a ray of hope for defensive stocks.

The broker selected CM BANK (03968.HK) as its top pick, stating that even though CM BANK has higher mortgage risk, with its higher NII contribution, financial indicators (including ROE, asset quality, and provision buffer) remaining superior to peers, and a dividend yield of 7.2%, the impact on its potential earnings is relatively lower than that of state-owned banks.

Believing that CM BANK has ample buffer capital to maintain its dividend level, UOB Kay Hian gave it a Buy rating with a TP of $42.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

CHN: Banks (NEUTRAL) - What could Rmb1tr of capital be used for? (27/9)

We think a Rmb1tr capital injection into China’s six SOE banks, should it materialise, can be levered by >12x to help fund >Rmb12tr of new loans.

We believe this leverage factor would be greater now than the 2009 economic stimulus, due to internal-rating based models adopted by banks.

A Rmb1tr capital injection could thus be a pre-emptive move to fund strong loan growth, though many questions still remain about execution.

Maintain sector Neutral weighting. Top picks are CCB, BOC, CMB and CITIC.

Source: CIMB

https://rfs.cgsi.com/api/download?file= ... DDD49DEFB5

[behappyalways]

UNREALISED LOSSES BY U.S. BANKS
7x HIGHER THAN 2008 FINANCIAL CRISIS
https://x.com/RadarHits/status/1838561187761398247

[winston]

The Bank Stock Rally Is Just About Over

by Jeff Clark

Readers who bought bank stocks two weeks ago based on the bullish technical setup should take profits now. The next big move for the sector looks like it will be lower.

Source: Jeff Clark Trader

https://tradesoftheday.com/2024/10/23/t ... bout-over/

[winston]

Mainland banks face higher loan risks

Stress arising from retail loans and inclusive micro and small enterprise lending has caused the bad loan ratios related to personal borrowers and credit cards to rise.

The loans to micro and small businesses accounted for 13 percent of China's banking system.

Rural banks are most exposed to lending to micro and small enterprises, facing higher risks due to borrowers' lower income levels and weaker collateral.

The underlying asset-quality deterioration could exceed reported figures, due to various forbearance measures including loan extensions until 2027.

The balance of loans to small and micro-enterprises nationwide increased 14.7 percent year-on-year to 32.58 trillion yuan (HK$35.65 trillion) as of September.

Source: The Standard

https://www.thestandard.com.hk/section- ... loan-risks

[behappyalways]

Investors really love financials here. The promise of less regulatory scrutiny under the Trump admin is one driver of inflows, which were the largest since February of 2022 over the last four weeks!
https://x.com/Mayhem4Markets/status/1860709960390201421

[winston]

HK: Moody's Remains Negative Outlook for HK Banking Sector on Heightened Asset Risk & Profitability Pressures

Ratings agency Moody's released a report maintaining a negative outlook on Hong Kong's banking sector due to heightened asset risk and profitability pressures.

Moody's expected Hong Kong's 2025 real GDP to grow moderately by 2.8% and the operating environment to remain stable.

Asset risk will remain elevated as the debt servicing ability of property-related borrowers has been deteriorating, collateral valuations have declined and loan loss coverage has reduced.

Net interest margins will be on a downtrend but credit costs will remain elevated as rate cuts and weak loan demand constrain loan pricing.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/analy ... stock-news

[winston]

China’s 4 top state-owned banks to raise US$72 billion from stock sales to boost capital

China Construction Bank (CCB) plans to mop up as much as 105 billion yuan, Bank of China about 165 billion yuan, Bank of Communications (Bocom) at least 120 billion yuan and Postal Savings Bank of China about 130 billion yuan.

The finance ministry will subscribe to the shares of all four banks, while China Tobacco will buy Bocom’s shares and China Mobile will acquire shares of Postal Savings Bank.

Source: SCMP

https://www.scmp.com/business/china-bus ... e=homepage