Financial Industry 08 (Aug 23 - Dec 26)

[winston]

2026 outlook: Improving fundamentals and attractive yield

Expect improving fundamentals for China banks with NII growth likely turning positive for most major ones

>5% dividend yield for China banks H-share remains attractive when we expect China bond yield to remain low in 2026

Strong non-NII momentum to continue at HK banks and support earnings growth
Top pick among China banks is ICBC (1398 HK); prefer HSBC (5 HK) over local HK banks, mainly from shareholder return perspective

Source: DBS

https://www.dbs.com/insightsdirect/indu ... ecid=29126

[winston]

Malaysia - Banking (OVERWEIGHT)
Resilient, rewarding, re-rating

Malaysia’s banking sector outlook remain constructive for 2026, premised on a resilient domestic economy and enhanced shareholder returns.

We project steady system loan growth of 4.8%–5.3% YoY for 2026, supported by our 4.5% in-house GDP forecast, Visit Malaysia 2026 campaign and RM50bn in SME fiscal support.

While export normalisation remains uncertain, banks' earnings visibility are bolstered by stabilising NIMs and robust NOII momentum.

Also, capital management serves as a primary catalyst, with sector-wide DPR increases potentially driving yields up to c.6.5%, by our estimates.

Despite recent share price strength, the sector valuation remains undemanding, trading at 0.95x P/B which is below the pre-Covid mean of 1.21x.

We continue to advocate a broad-based buying strategy, while nominating Maybank, CIMB, and Alliance as our top picks for 1H26.

Source: HLIB

[behappyalways]

"Affordability!": Trump Calls For Temporary 10 Percent Cap On Credit Card Interest Rates
https://www.zerohedge.com/personal-fina ... rest-rates

[winston]

Trump Targets Card Swipe Fees After Interest Rate Threats

by Steven T. Dennis, Paige Smith and Georgie McKay

First, President Donald Trump targeted the interest rates credit-card companies levy against US consumers.

Now he’s targeting the interchange fees that merchants must pay to tap, swipe and insert their cards at checkout.

Credit Card Competition Act would require larger banks to offer retailers, the ability to bypass dominant networks Visa Inc. and Mastercard Inc. for transactions,

Source: Bloomberg

https://finance.yahoo.com/news/trump-ta ... 35142.html

[winston]

It’s Time to Bet Against the Banks

by Jeff Clark

The BPFINA is once again in an extremely overbought condition. And, when it turns lower, we’ll get another sell signal.

Given that the bank stocks are trading at their highest book value multiples since late-2021 – which was a bad time to buy bank stocks – the next sell signal is likely to kick off a larger decline.

It looks to me like BKX could lose 10% to 15% over the next two months.

Traders should also keep in mind the action in banks tends to lead the action in the broad stock market.

Just as the bank stocks have led the market higher since April, if the banks do indeed start to fall from here, the rest of the stock market will likely follow.

Source: Jeff Clark Trader

https://dailytradealert.com/2026/01/16/ ... the-banks/

[winston]

Banking (OVERWEIGHT)
Mixed bag of data

Dec-25 system loan growth slowed to +4.8% YoY as corporate softness offset resilient household demand.

Despite tepid applications, firm approvals and rising CASA momentum, suggest stabilising NIMs entering 2026.

Asset quality remains robust, with the GIL ratio improving to 1.37% backed by substantial provision buffers.

We project 2026 growth at 4.8%–5.3%, anchored by SME activity coupled with the VM2026 tailwinds.

We downgrade RHB to HOLD following its recent rally but add AMMB to our top picks alongside Maybank, CIMB, and Alliance.

Overall, we maintain OVERWEIGHT rating on the sector.

Source: HLIB

[winston]

Malaysian banks’ dividend plan may stretch capital position, warns Moody’s

By Jean MacKillop

CIMB Group Holdings Bhd (KL:CIMB), the country’s second-largest bank, plans to return up to RM2 billion to shareholders over the next two years.

Smaller rival Public Bank Bhd (KL:PBBANK) is preparing to raise its dividend payout ratio guidance to 60% for 2025, while AMMB Holdings Bhd (KL:AMBANK) seeks to double payouts within five years.

For now, Malaysian banks will remain “well capitalised, supported by internal capital generation that will be much higher than asset growth” as the sector generates 10%-11% return on equity.

System-wide common equity tier 1 capital ratio — a measure of a bank’s capital strength based on the highest quality of regulatory capital — was broadly steady at 14.7% at the end of June 2025, a level generally considered high by analysts.

Source: theedgemalaysia.com

https://theedgemalaysia.com/node/792185

[winston]

Malaysia - Banking (OVERWEIGHT)
Good start for 2026

Jan-26 system loan growth held steady at +4.7% YoY (-1bp MoM), anchored by household lending albeit offset by moderation in the business segment.

Despite tapering deposit growth, a robust +26.7% YoY surge in approvals and rising CASA momentum (+8.0% YoY) suggest stabilising NIMs as 2025 OPR repricing lags subside.

Asset quality remains resilient, with the GIL ratio at 1.40% well-cushioned by substantial management overlays.

Following recent profit-taking, we view CY27’s valuations at -1SD below the 5-year mean P/B as a compelling entry point.

We maintain our OVERWEIGHT rating on the sector, with top picks comprising MAYBANK, CIMB, AMBANK, and ABMB.

Source: HLIB

[behappyalways]

Loans To Non-Banks Threaten Banking Crisis
https://www.zerohedge.com/markets/loans ... ing-crisis

[behappyalways]

China’s mega banks post scant profit gains on margin squeeze
https://www.theedgesingapore.com/news/c ... in-squeeze