The Best Emerging Market Banks in Asia 2009

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In an earlier article, I wrote about the The Best Emerging Market Banks in Latin America 2009. In this post, the best emerging market banks in Asia are listed.

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Shinhan Financial Group (SHG) of South Korea and HDFC Bank  (HDB) of India trade in the New York Stock Exchange. Shinhan does not pay a regular dividend. As per a recent Marketwatch article, though many Korean banks have rallied in the past few weeks , bad loans and lower profit margins may drag them lower. India’s HDFC bank (HDB) is expensive with a P/E ratio of 31.29. HDB has a dividend yield of just 0.54%. The latest earnings report showed a rise in profits but provisions for non-performing assets are also increasing. HDB is not a good buy at these levels.

Daily Wisdom: Ireland’s Bad Bank Edition

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As Ireland reels from its banking woes, a fierce debate is under way as to whether the government’s ‘bad bank’ solution will be enough to open a route to recovery or whether widespread bank nationalisation is a more realistic option. A ‘bad’ solution for a battered economy?

Photo: Frankfurt Stock Exchange

A look at Repsol and Sasol ADRs

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Repsol(REP) and Sasol(SSL) operate in the integrated oil&gas; and energy & chemical industries.

Out of these two, Sasol(SSL) is an interesting company since its portfolio of assets is diverse. The company “mines coal in South Africa, produces gas in Mozambique and oil in Gabon, and its chemical manufacturing and marketing operations span the globe”. In South Africa, it runs 406 Sasol retail convenience centers and Exel service stations. The average annual earnings growth for Sasol is 27%. Last year Sasol has nearly $20B in total revenues.

Spain-based Resol(REP) is “an integrated oil and gas company engaged in all aspects of the petroleum business, including exploration, development and production of crude oil and natural gas.”The current yield is 6.32%.Average annual revenue growth rate is about 11%. Resol is an average performer as the earnings grew at 7% annually in the last 5 years.It has a debt to total capital ratio of 43.33% which is in-line with its peers in the Oil & Gas – Integrated industry.

The Best Emerging Market Banks in Latin America 2009

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The Global Finance magazine published the “Best Emerging Market Banks in Latin America” for 2009  in the May issue.This is the sixteenth year the magazine has ranked the top banks in the emerging markets.

These top-performing banks  were selected based on the following factors:

  • Growth in assets
  • Profitability
  • Strategic relationships
  • Customer service
  • Competitive pricing
  • Innovative products

Releasing the list, Joseph Giarraputo, publisher of Global Finance said “We are in a unusually challenging environment for banks and their customers.More than ever, customers are demanding superior competence from their banking partners. These are the banks best providing that competence.”

The following table shows the top banks for 22 countries in Latin America. If the bank is listed the US markets, the ticker is included.

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Source: Global Finance Magazine

Banco Macro of Argentina(BMA) has more than tripled since the March lows.Currently it has an yield of 5.21%. Brazil-based Itau Unibanco (ITUB) was formed by the merger of Banco Itau Holding Financeira SA and Unibanco. Itau Unibanco is one of the largest private-sectors in Brazil. Itau Unibanco is one of the few foreign banks that pay a small monthly dividend. ITUB  competes with the other large private-sector   bank Banco Bradesco (BBD).

Banco Santander-Chile(SAN)  operates a network of 477 branches countrywide. The current yield is 4.74%. Bancolombia SA(CIB)’s dividend yield is 3.13%. In addition to 717 branches in Colombia, the bank has operations in El Salvador, the United States, the Cayman Islands, the British Virgin Islands, Panama, Peru and Puerto Rico. Bancolombia is part of Grupo Bancolombia which has many entities in the financial sector in Colombia.

Scotiabank Jamaica and Scotiabank Costa Rica are subsidiaries of the Canadian bank Bank of Nova Scotia (BNS). BBVA Banco Continental & BBVA Banco Provincial are group companies of the Spanish banking giant Banco Bilbao Vizcaya Argentaria, S.A. (BBV) and Banco Santander Uruguay and Banco Santander Puerto Rico are subsidiaries of Spain-based Banco Santander group.Banamex, a subsidiary of Citibank, is Mexico’s second largest bank with 1,233 branches.