The latest Market Talks covering Financial Services. Exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.
0809 ET - Digital marketing platform Ibotta boosts the size of its planned initial public offering to 6.56 million shares, as more investors look to cash in some chips. Ibotta says it still plans to sell 2.5 million shares in the IPO, while current shareholders, including Koch Industries, will sell about 4.06 million, up from around 3.13 million. Ibotta says it still expects an IPO price of $76-$84 a share. A pricing at the high end would give the Denver company a market capitalization of roughly $2.55 billion. (colin.kellaher@wsj.com)
0759 ET - Plus500 seems to have the resources to support bolt-on acquisitions that could lead to further growth, Jefferies analysts write in a research note. The online-trading platform operator delivered a robust first quarter performance with its key metrics all going in the right direction, the analysts say. Plus500 is an attractive stock with high profitability and generous distributions, they add. The U.S. bank expects full-year consensus estimates to rise and exceed market expectations of $670 million in revenue and $300 million in Ebitda. Shares are up 1.9% at 2016.00 pence. (najat.kantouar@wsj.com)
0748 ET - Bank of America booked a $1.3 billion provision for credit losses in 1Q, up from $1.1 billion in the 4Q, and $931 million in the year-ago period. The bank saw revenue from its consumer banking business drop 5% in 1Q. As for credit quality, Bank of America says net charge-offs of $1.5 billion increased from $1.2 billion from 4Q. The bank had consumer net charge-offs of $1B, increasing $115 million from the prior quarter due to higher credit card losses. Overall, its credit card loss rate went to 3.62% in 1Q versus from 3.07% in 4Q 2023. S(sabela.ojea@wsj.com; @sabelaojeaguix)
0715 ET - Regulatory data offers a modestly negative read-through for Canada's banks, with only slight sequential loan growth in February, the first month of fiscal 2Q, Keefe, Bruyette & Woods says. It notes key trends were largely as expected, with continued weakness in real estate secured lending and a further deceleration in domestic lending, while a falling loonie helped prop up U.S.-based loans. KBW says the month also showed deposit growth outpacing loan volumes and a continued shift into higher-cost fixed-term deposits, both of which may put pressure on margins. (robb.stewart@wsj.com; @RobbMStewart)
0459 ET - Phoenix Group Holdings faces a cash and capital conundrum, leaving it with little potential for outperformance or catalysts, Barclays says in a note. The consolidator of life insurance and pensions has three major challenges: it doesn't have enough cash from operations alone to support its targets, its capital position is weaker than peers', and it has pivoted its strategy to areas where the group is not meaningfully differentiated and competition is strong, such as bulk annuities and capital light workplace offerings, the analysts write. Barclays double downgrades the stock to underweight from overweight and trims its target price to 500 pence from 600 pence. Shares in London fall 3% to 493.2 pence and are down 7.85% year-to-date. (elena.vardon@wsj.com)
0439 ET - Wise PLC's results were weak with volumes missing expectations as averages per customer continued to fall, Citi says after the cross-border payments group published a trading update for its fourth quarter and fiscal 2024. "While total income was in-line with consensus and above the FY24 guidance, interest income was once again the key driver, and we more broadly remain concerned on the relatively slower core remittance growth, continued declining volume per customer and a reversal of interest income benefit, given the demanding valuations," the analysts write in a note. Shares fall 7.5% to 845 pence but have gained 45% on a 12-month basis. (elena.vardon@wsj.com)
0359 ET - Hong Kong Exchanges & Clearing's 1Q earnings could be weighed by weak trading and initial public offering activities, Citi research analyst Michael Zhang writes in a note. Listing reforms, the stock connect with China and MSCI derivatives could help fuel growth in the long run, but the new initiatives will take time to deliver results and are unlikely to drive substantial growth in the short term, Zhang says. HKEX also sees a soft cash market, even though its derivatives trading volume remains strong, Zhang notes. Citi maintains a sell rating on the stock and cuts its target price to HK$215 from HK$233 to reflect a lower growth estimate for the year. Shares fall 2.9% to HK$217.80. (kimberley.kao@wsj.com)
0139 ET - Profits at China banks may hold up in 1Q despite a challenging operating environment leading to subdued revenue generation, says Lawrence Chen, an analyst with CCB International, in a note. He forecasts profit for banks under CCB's coverage at CNY481 billion, flat on year. Chen notes these banks have decent capital adequacy and return on equity sufficient to sustain their dividends and sees an 8.6% dividend yield in FY 2023 for H-share banks, payable in mid-FY 2024. CCB also projects a 5% on-year dip in impairments on improved non-loan impairments, alongside flat loan impairments. However, concerns about NIM squeeze will dominate in 1Q, Chen says and forecasts NIM of 149bp in 1Q, down 30bp on year and 6bp on quarter.(monica.gupta@wsj.com)
2318 ET - Singapore's inflation trajectory is likely to be bumpy this year, but DBS Group Research still expects average headline and core prints to ease from last year. Domestic inflationary impulses may lift core inflation near term, but it will likely stay under control, DBS says. It cites factors including an expected tempering in imported inflation thanks to the cumulative effect of monetary tightening and SGD strength. Cooling core inflation, plus moderating prices for private transport and accommodation will help check headline inflation in 2024, the team adds. DBS tips average 2024 headline and core inflation at 3.5% and 3.1% respectively, versus 4.7% and 4.0% for 2023.(amanda.lee@wsj.com)
2255 ET - Australian general-insurance customers have been taking on higher excess as one way of addressing affordability concerns, Macquarie analysts say in a note. The investment bank says its survey finds that home-insurance excesses have increased more than personal motor excesses last year--10% versus 6.7%, respectively. For both home and personal motor insurance, new-business excesses are being increased more than on renewal business, says Macquarie, adding that "changes in excesses will be worth following for the coming around 12 months as a natural headwind for gross written premium growth." Still, Macquarie keeps its positive outlook on the Australian insurance sector.(alice.uribe@wsj.com)
2223 ET - Recent buying of Australian banks' stocks have likely been led by overseas institutional investors, potentially on the back of a weaker China outlook driving fund inflows into Australia, say Macquarie analysts in a note. Though domestic institutional investors also remained net buyers of banks in the March quarter, Macquarie points out that it was more "discriminate than in the previous quarter as investors switched from CBA into other major banks." Westpac was rewarded by investors after a better than expected 1Q FY 2024 trading update. Macquarie says retail investors remained net sellers in the March quarter. "Investors reduced short positioning across all the major banks, with the exception of Bank of Queensland, where investors lifted short interest," Macquarie adds. (alice.uribe@wsj.com)
2140 ET - Bank of Queensland is likely to report a drop in profitability in 1H FY 2024, says Citi analyst Brendan Sproules in a note. The investment bank has a 1H cash earnings forecast of A$161.4 million, in-line with consensus, but around 37% lower than the previous corresponding period, Citi says. "The sharp drop in profitability over the past 12 months, primarily driven by falling net interest margin, is set to drive another dividend per share reset," says Citi. It expects 1H DPS to fall to A$0.17 from A$0.20 in 1H FY 2023. Still, FY 2024 may be a trough for both earnings and dividends, as current NIM decline starts to wane, potentially stay broadly flat and BOQ's expected productivity benefits start to emerge, Citi adds. (alice.uribe@wsj.com)
(END) Dow Jones Newswires
April 16, 2024 12:20 ET (16:20 GMT)
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