发帖
雷达卡
ASIAN BANKS
Credit tsunami
• NPL ratios across Asia could double this year to 4.42%
and the next two-to-three years could prove difficult for
bank earnings if our worst-case scenario materialises.
Banks in China and Hong Kong are likely to be least
affected by the global downturn. We rate Wing Hang
Bank and Bank of China Outperform due to a
combination of relative safety and reasonable price.
• Even though Asian bank stocks lost 59% of their value
from the 2008 peak to 29 January, 2009, valuations
remain well above trough levels. P/BV multiples are 28%
higher than the historical low. The cheapest bank shares
are not yet poised for recovery.
• While we are waiting for share prices to recover, it might
be worth considering a dividend play. Banks in Hong
Kong offer the most attractive yields as well as
reasonable fundamentals.
Jim Antos Warren Blight
Brian Hunsaker Dan Dan Zhu
Fox-Pitt, Kelton (Asia) Limited
TABLE OF CONTENTS
Summary and recommendations ....................................................................................... 4
Credit tsunami ...................................................................................................................... 6
Cheap enough yet?............................................................................................................ 13
Dividend plays.................................................................................................................... 15
China: the 130% solution .................................................................................................. 16
Hong Kong: far from meltdown........................................................................................ 19
Korea: déjà vu all over again ............................................................................................ 22
Singapore: canary in the coalmine .................................................................................. 25
Thailand: down but not out ............................................................................................... 27
Bank of China Outperform............................................................................................. 30
Wing Hang Bank Outperform ........................................................................................ 32
Disclosure information...................................................................................................... 37
SUMMARY AND RECOMMENDATIONS
Analyst: Jim Antos +852 3191 8630
NPL ratios could double in Asia this year in a worst-case scenario. It does not
require special predictive powers to realise that 2009 is the year the credit cycle is
likely to turn negative for Asia ex-Japan. For 2009, our base-case forecast calls for
NPL ratios to rise 55bp to 2.88% for major banks in China, Hong Kong, Korea,
Singapore and Thailand. Credit quality in Singapore and Thailand is likely to take the
biggest hit, with NPL ratios deteriorating by more than a full percentage point in our
base case. In the event of a severe credit shock this year, we estimate that NPL
ratios could double to 5.74% on average this year in the five markets.
We believe the cost of doing banking business will climb in 2009, no matter how the
regional economy fares. Credit costs reached a low of 39bp of loans in 2005, falling
from an historical high of 294bp of loans in 1999. Since 2005, costs have remained
low, likely increasing to a still affordable 53bp of loans in 2008. In our base-case
forecast, we expect the major banks in our sample to increase provision expense to
70bp of loans for 2009. In a deep distress outlook, we think provisions could rise to
204bp of loans this year.
Bottom-line profits, which we thought would grow by 4.1% in 2009 in our base case,
could fall by as much as 44.1% this year in our most pessimistic forecast. This is a
sharp contrast to double-digit growth in net profit that was typical for many Asian
banks over the past five years.
We expect three difficult years for banks if our worst scenario plays out. In a
worst-case scenario, assuming that Asia enters a deep recession this year, we think
that a three-year cycle of higher NPL ratios and higher credit costs is not unthinkable.
While the 1997-98 Asian financial crisis is not an exact comparator to the current
global economic malaise, GDP data for 4Q08 from China, Korea and Singapore all
suggest that we have entered a deeper recession than in either 2001 or 2003. As a
result, we think the credit patterns seen in 1997-98 are instructive.
Asian banks have already started to raise capital as a prudential measure. DBS
in Singapore and banks in Korea have already started to raise capital in an effort to
shore up balance sheets for the impact of deteriorating credit quality this year. DBS’
deep discounted share placement in December 2008 brings its Tier 1 ratio up to
11.8% from 9.7%. While this is an impressive data point, we do not think that DBS is
‘over-capitalised’ in view of the potential for a credit shock in 2009. We estimate that
higher provision costs plus additional balance sheet reserves could prompt banks to
raise USD35-70bn in additional capital this year in a worst-case scenario. Just as we
have seen for the Korean banks recently, we expect the bulk of the new funds to
come from subordinated debt and other hybrid forms of capital.
Bank regulators are taking a more active role as times turn bad. Officials in
Korea and China have already taken steps to prepare banks in their markets for hard
times. Korea is setting up a USD14.7bn recap fund for the banking sector and has
made a USD30bn FX swap line available to ensure that banks have access to US
dollar liquidity. The regulator has also taken the lead to restructure loans to the
construction and shipbuilding industries. In China, the regulator increased minimum
required NPL coverage ratios and in Thailand we believe Bank of Thailand likely
encouraged the NPL clean-up seen at a number of banks in 4Q08. These prudential
measures are positive, even though they will not prevent a credit shock from
happening in 2009 in our opinion.
292490.pdf
(452.29 KB, 需要: 500 个论坛币)
提升卡
置顶卡
沉默卡
变色卡
抢沙发
千斤顶
显身卡
京公网安备 11010802022788号
