The Market is so cash rich ... some of the today industry is supported by cheap loans ... this needs to be corrected.
The first to fall is those with more expensive loans. Most retailers were not even in the market after 2008. That's why brokers do not earn much.
(21-01-2016, 12:23 PM)corydorus Wrote: [ -> ]The Market is so cash rich ... some of the today industry is supported by cheap loans ... this needs to be corrected.
The first to fall is those with more expensive loans. Most retailers were not even in the market after 2008. That's why brokers do not earn much.
Back to OCBC.
In hindsight they probably acquired wing hang a little too early. Now that they have wing hang, any shock to the HK financial system will reflect badly on OCBC. Share price might even go below GFC lows.
Dun follow OCBC much, but any vb familiar with their accounts care to share how leveraged they are compared to peers like UOB / DBS ?
Definitely one to consider pick up if shares hit $5
Looking at latest quarterly report, total liabilities/total equity is as follows:
DBS = 10.58
OCBC = 10.78
UOB = 9.7
(21-01-2016, 02:58 PM)gzbkel Wrote: [ -> ]Looking at latest quarterly report, total liabilities/total equity is as follows:
DBS = 10.58
OCBC = 10.78
UOB = 9.7
thanks gzbkel, all banks around 10 with OCBC the highest which is understandable given their recent acquisition.
However IMHO those ratios seem to be a bit on the high side, which may be more reasonable for investment type banks rather than consumer/retail type banks.
(21-01-2016, 02:58 PM)gzbkel Wrote: [ -> ]Looking at latest quarterly report, total liabilities/total equity is as follows:
DBS = 10.58
OCBC = 10.78
UOB = 9.7
This ratio has not much relevance when analysing banks.
(24-01-2016, 12:03 PM)csl123 Wrote: [ -> ] (21-01-2016, 02:58 PM)gzbkel Wrote: [ -> ]Looking at latest quarterly report, total liabilities/total equity is as follows:
DBS = 10.58
OCBC = 10.78
UOB = 9.7
This ratio has not much relevance when analysing banks.
What would be the more relevant ratios? Hope to learn more about banks, thank you.
(24-01-2016, 12:17 PM)gzbkel Wrote: [ -> ] (24-01-2016, 12:03 PM)csl123 Wrote: [ -> ] (21-01-2016, 02:58 PM)gzbkel Wrote: [ -> ]Looking at latest quarterly report, total liabilities/total equity is as follows:
DBS = 10.58
OCBC = 10.78
UOB = 9.7
This ratio has not much relevance when analysing banks.
What would be the more relevant ratios? Hope to learn more about banks, thank you.
Banks are an entirely different type of entity to analyze because their raw material is money, and the very basics of how banks earn is the difference between the interest paid to depositors, central banks and other financial institutions and interest received from loans to debtors (property, car, credit card, etc). So metrics like TL/TE and EBITDA are rendered useless.
Typical metrics to analyze banks are:
Price-to-Book, ROE, NIM, NPL %, TCE/RWA %
Hi SpeedingBullet, thanks for the info! Will look up more into the metrics you mentioned.
Debt to equity might not be relevant when comparing a bank to companies in other industries, IMO its still a relevant metric in comparing different banks. It reveals to us, for e.g., the potential unused lending capacity of a bank, or the efficiency of the bank in using its risk capital when read in conjunction with its equity capital ratios.
BTW, the common equity ratios as defined by regulators is essentially a derivative of debt/capital ratio.
(24-01-2016, 12:17 PM)gzbkel Wrote: [ -> ] (24-01-2016, 12:03 PM)csl123 Wrote: [ -> ] (21-01-2016, 02:58 PM)gzbkel Wrote: [ -> ]Looking at latest quarterly report, total liabilities/total equity is as follows:
DBS = 10.58
OCBC = 10.78
UOB = 9.7
This ratio has not much relevance when analysing banks.
What would be the more relevant ratios? Hope to learn more about banks, thank you.
% ROA, % NPL, NIM, Expense to Income, Loans to Deposit, Deposit Growth. These measures, capital efficiency, risk management, operational efficiency, growth potential.
IMO, P/B is more of a market perception of the stock. Not a direct measure of the inherent business value.
%ROA and %NPL being the most critical ratios for the traditional banking business.
If you have non-interest income, things get complicated as you have mark-to-market valuations.