Financial Industry 08 (Aug 23 - Dec 26)

[winston]

US bank stocks plunge as investors grow uneasy about mounting risks

Zions sank 12% after disclosing it would take a $50 million loss in the third quarter on two commercial and industrial loans from its California division.

Western Alliance' stock slumped almost 11% after the bank separately disclosed it had initiated a lawsuit alleging fraud by Cantor Group V, LLC.

Investment bank Jefferies, which held an investor day on Thursday, plunged 9%. The firm has disclosed exposure to bankrupt auto parts maker First Brands,

JPMorgan wrote off $170 million in the third quarter related to the Tricolor bankruptcy and said it was reviewing its controls.

Source: Reuters

https://theedgemalaysia.com/node/774505

[winston]

<Research>G Sachs Maintains Cautiously Optimistic View on CN Banks, Prefers CM BANK (03968.HK)

The A- and H-shares of Chinese banks rated by Goldman Sachs recorded weighted absolute returns of 12%/ 21% respectively YTD, Goldman Sachs published a research report saying.

The broker believed that this is not driven by investors seeking dividend returns, but rather by improvements in the fundamentals of various banks, including stabilization of asset quality and narrowing of net interest margin decline.

Looking ahead to 3Q25 results, Goldman Sachs maintained a cautiously optimistic view on China's banking sector.

In terms of stock selection, Goldman Sachs will focus on banks that can reduce the impact of bond investments on earnings and capital fluctuations during the net interest margin recovery process, appropriately maintain credit growth and uphold provisions and capital adequacy.

Goldman Sachs believed that large state-owned banks and CM BANK (03968.HK) are more capable of achieving sustainable net interest margin recovery compared to their peers, thus offering greater shareholder return potential.

The broker slightly adjusted its 2025-2027 PPOP/ net profit forecasts for banks it rated, reflecting improved prospects for fee income growth, weakened credit demand, decreased contribution from investment income and higher provisions, etc..

Related News: Citi Expects CN Banks to Outpace Mkt in 4Q; Top Picks ICBC/ CCB/ BANK OF CHINA

Goldman Sachs lowered its target prices for covered Chinese banks' H-shares by 1-9%. Of which, the broker preferred CM BANK, with rating at Buy, and cut its target price from $53.34 to $52.98.

Goldman Sachs also rated the H-shares of CM BANK, PSBC (01658.HK), BANK OF CHINA (03988.HK) and CCB (00939.HK) at Buy.

Source: AASTOCKS Financial News

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

[winston]

by behappyalways:-

Singapore bank sets aside record $470mn provision for Hong Kong property loans

Source: FT

https://www.ft.com/content/275e8716-8f0 ... c402939e20

[winston]

China Banks: More reason to be less worried about NIM

Mortgages rates have clearly stabilised YTD at 3.06-3.09%, despite May’s LPR cut, with mortgage spreads over 5-year LPR even rising slightly (Fig 1).

This is positive for banks with a high mortgage loan mix: CCB among SOE banks (1H25: 22.4%) and CMB among joint stock banks (1H25: 20.2%).

PBOC’s commentary in its 3Q25 monetary implementation report also leads us to view future LPR cuts as minimal, thus improving the outlook for NIM.

Maintain sector OW on improving operating metrics and Southbound inflows.

Source: CGS

https://rfs.cgsi.com/api/download?file= ... 7D1CBCA6CF

[winston]

Malaysia: Banking (OVERWEIGHT)
Steady loan growth

System loan growth remained resilient in Oct-25 at +5.4% YoY, underscoring a resilient lending dynamic despite a softer deposit backdrop underpinned by weaker CASA and foreign currency inflows.

However, we noticed leading indicators moderated.

Interest spread narrowed further on the back of lower loan yields, and we estimate NIM compression to persist into 4Q25 before elevated deposit costs finally stabilise.

Overall, our stance on the banking sector remains constructive, supported by undemanding valuations, dividend yields exceeding c.5%, and a favourable risk-reward setup.

Maintain OVERWEIGHT and reiterate BUY ratings on Affin, ABMB, AMMB, CIMB, Maybank, Public, and RHB.

Source: HLIB

[winston]

Malaysia - Banking Industry

An operationally improved outlook

Sector upgrade to POSITIVE

Having weathered through economic volatility and much challenges to funding cost in 2025, we expect 2026 to be an operationally more conducive year for the sector, with projected aggregate operating profit and net profit growth of 4.7%/5.0% respectively (3.4%/3.8% in 2025E).

Dividend yields are decent at >5% for most banks, while valuations are still undemanding, with most banks trading close to -1std deviation to their historical mean forward PERs.

Top 3 BUYs are CIMB, AMMB and ABMB. Other BUYs are HLFG, PBK and RHB. We have downgraded HLBK to HOLD.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/502409.pdf

[winston]

Why is DBS - Southeast Asia’s largest lender - seeking a stake in one of Malaysia’s smallest banks?

Malaysia currently has 27 commercial banks: Eight majority Malaysian-owned and 19 foreign-owned.

The DBS–Alliance Bank proposal may take up to six months to complete due to regulatory and shareholder approvals required.

The DBS–Alliance Bank proposal may take up to six months to complete due to regulatory and shareholder approvals required.

Hong Leong Bank could become a target for Maybank or CIMB. A merger with either would create a financial powerhouse capable of challenging DBS.

Public Bank, with assets of US$129.9 billion, could instead become a merger candidate for RHB Bank.

Both Public Bank and RHB share a common shareholder in Malaysia’s Employees Provident Fund (EPF), and a merger between them would resolve long-standing shareholding concerns flagged by BNM.

Source: CNA

https://www.channelnewsasia.com/asia/db ... ar-5550516

[winston]

China Banks: <Research>CICC Predicts YoY Rise in CN Banks' Operating Income & NP Next Yr, Further Narrowing in NIM Pressure

CICC indicated in a research report its continued optimism for the absolute and relative performance of Chinese banks.

The broker forecasted that the listed banks under its coverage would see operating income/ net profit attributable to shareholders increase by 2.5%/ 1.9% YoY in 2026 and 3.6%/ 2.6% YoY in 2027.

This forecast was built on the further narrowing of net interest margin pressure and improved credit allocation, which would primarily stem from weaker credit demand and insufficient risk compensation, with more pronounced regional and industry characteristics in credit allocation.

CICC also estimated accelerated supply-side reform in the industry, a rapid decrease in the number of banking licenses, and improved industry competition and business landscape.

Source: AAStocks Financial News

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

[winston]

Diverging trends in GIL and total provision

We estimate banks’ loan growth at 4.9% in 2025 and 4.5-5.5% in 2026F.

Banks’ GIL rose by RM430.2m (+1.3% mom) in Nov 25 but total provision slid by RM459.6m mom in Nov 25.

Reiterate Overweight on Malaysian banks given our expectations of writebacks in management overlay in FY26-27F and rising dividend payout ratios.

Source: CGS

https://rfs.cgsi.com/api/download?file= ... 9B4A792EB1

[winston]

HK/China Insurance Sector - More upside ahead

We lift insurers’ target price by 3%-18%, supported by improving sector outlook and higher target multiples

Near-term catalysts:
a) stronger RMB, to benefit insurers’ investment outlook;
b) bond yield stabilisation from the anti-involution campaign; and
c) positive 4Q25F earnings expectations

Sector trading at 1.3x/0.8x FY26F PB/PEV, suggests 14%- 37% further upside

Top picks: Ping An (2318 HK) and AIA (1299 HK)

Source: DBS

https://www.dbs.com/insightsdirect/indu ... ecid=29120