Financial Industry 07 (Jul 18 - Aug 23)

[behappyalways]

The bank is looking to cut its overall cost base by $1 billion, Bloomberg reported this week. This could include an "aggressive plan" to reduce its headcount of more than 51,000 workers.

Credit Suisse Set To Slash Thousands Of Jobs Despite Handing Out Hundreds Of Millions To Retain Top Talent
https://www.zerohedge.com/markets/credi ... retain-top

[winston]

Now’s the Time to Buy These Stocks

by Jody Chudley

Corporate share repurchases can be a tremendous contrarian indicator.

Buybacks should be the smart money in the market. Instead, they are the opposite.

The reality is that when the economy is great and share prices are high, the big banks – and most of corporate America – buy back stock aggressively.

Citigroup, which trades at a minuscule 50% of book value, is the best value that I see in the sector today.

Source: Wealthy Retirement

https://dailytradealert.com/2022/08/06/ ... -stocks-5/

[winston]

CN Banks Reportedly Attempt to Inflate Loan Vol.

Chinese banks are employing creative methods to inflate their loan volumes, as they struggle to meet the central government's demand to inject more liquidity into the economy, reported Bloomberg News, citing people familiar with the matter.

As borrowers become increasingly reluctant to take on debt amid the economic growth slowdown, certain state-owned banks in China are issuing loans to companies and then allowing them to deposit funds at the same interest rate.

Some other banks, on the other hand, have been borrowing from one another through short-term financing arrangements, which can be disguised as new loans to boost volumes, the report added.

Source: AAStocks Financial News

[winston]

China Strategy – Chinese banks to underperform amid weakening fundamentals

While Chinese banks as a sector posted in-line earnings in 2Q22, a diverging trend in earnings growth emerged between large state-owned banks (with growth came in below expectation) and major joint-stock banks (JSBs) and regional banks (with growth came in stronger-than-expected).

That said, underlying fundamentals for most banks have moderated at a faster-than-expected pace, owing to sharp sequential net interest margin (NIM) compression, weak fee income, and higher-than-expected growth in operating expenses (especially for large banks).

2Q22 saw a steeper-than-expected NIM compression with NIMs of major JSBs compressed more than those of large state-owned banks mainly driven by declining loan yield.

Going into 2H22, the NIM compression is expected to continue, though at a milder pace, driven by a combination of loan prime rate (LPR) cuts, weak loan demand, regulatory guidance on loan pricing, a modest recovery of retail credit, and a better managed deposit cost.

NIM is expected to come under pressure in 1Q23, reflecting the impact of cumulative cuts in the 5-year LPR and the re-pricing of mortgages.

Overall non-performing loan (NPL) ratio remained flat sequentially in 2Q22 but gross NPL formation rate edged up amid challenging macro conditions in the same period.

The exposure to developers’ loan remains a key concern. Overall developers’ loan increased by about 3% half-on-half (HoH) and non-performing developers’ loans increased materially by 75 basis points (bps) HoH to 3.2% as of Jun 22.

We expect Chinese banks to continue underperforming the broad market in the near-term in light of deteriorating fundamentals – NIM compression and concerns on developers’ loan NPL.

A key event to watch out for in the coming quarter would be the 20th Party Congress, which is scheduled to be held on 16 October 2022, and whether there could be a stepping up of easing policy support.

While Chinese banks’ relatively high 8-9% dividend yield would be appealing to income-oriented investors, we view Chinese Telcos as an alternative.

Within Chinese banks, we prefer Bank of China (BOC, 3988 HK, Fair value HKD3.5) on the back of its high dividend yield of around 9% and its relatively higher foreign currency exposure which could benefit from USD rate hike cycle.

In the medium- and long-term, we favour banks with strong retail business and Postal Savings Bank of China (PSBC, 1658 HK, Fair value HKD5.5) as the preferred play on the back of strong retail business, robust fee income growth and relative attractive valuation.

Source: OCBC

[winston]

not vested

This Stock Offers a Solid Risk-Reward Profile Right Now

by Jody Chudley

SPDR S&P Bank ETF (NYSE: KBE)

NIMs, after being crushed by Federal Reserve zero interest rate policy, are now heading back toward normality.

The increase in profits from widening NIMs will far outpace any deterioration in loan performance.

Source: Wealthy Retirement

https://dailytradealert.com/2022/10/03/ ... right-now/

[behappyalways]

區塊鏈重塑金融新疆界 CNBC解析DeFi利弊｜FOCUS午間新聞 20221007
https://m.youtube.com/watch?v=hIpVCSpZnqE

[behappyalways]

Fed堅持升息美股欲振乏力 瑞信傳聞攪亂一池春水 TVBS文茜的世界財經周報 20221009
https://m.youtube.com/watch?v=Okh7v3-6yOo

[winston]

CHN: Banks (NEUTRAL) - How much are buffers worth? (25/10)

Concerns over a slow economy persisting in FY23F have led us to downgrade the ratings of a number of China banks under our coverage.

But buffers relating to provisioning NPL recognition can result in minimal EPS downside risks, with CMB, ABC, CCB CQRCB best positioned (Fig 1).

We estimate these buffers equate to an average of 225% of 1H22 >90 days overdue loans, or 121% 70% of FY22F net profit PPOP, respectively.

Retain sector Neutral rating. Top picks are CMB, BOC and PAB.

Source: CIMB

[winston]

These Stocks Are Just Beginning to Rally

by C. Scott Garliss

The Fed has said it’s going to raise rates another 1.5% by next March. That means banks are going to make even more money on loans.

As long as rates stay high, it will be a massive tailwind for the sector.

Source: DailyWealth.com

https://dailytradealert.com/2022/10/26/ ... -to-rally/

[winston]

Banks Stuck With $42 Billion Debt Seize Chance to Offload It

by Jill R. Shah and Claire Ruckin

Source: Bloomberg

https://finance.yahoo.com/news/banks-st ... 21701.html