Core Viewpoint - Investors are considering Banco Santander-Brazil (BSBR) and National Australia Bank Ltd. (NABZY) for potential value opportunities in the Banks - Foreign sector [1] Group 1: Zacks Rank and Earnings Outlook - BSBR has a Zacks Rank of 2 (Buy), indicating a stronger earnings outlook compared to NABZY, which has a Zacks Rank of 3 (Hold) [3] - The improvement in BSBR's earnings outlook is a significant factor for value investors [3] Group 2: Valuation Metrics - BSBR has a forward P/E ratio of 7.19, while NABZY has a forward P/E of 15.74, suggesting BSBR is more attractively priced [5] - BSBR's PEG ratio is 0.79, indicating better expected earnings growth relative to its price compared to NABZY's PEG ratio of 8.37 [5] - BSBR's P/B ratio is 0.86, compared to NABZY's P/B of 1.72, further highlighting BSBR's valuation advantage [6] Group 3: Value Grades - BSBR has earned a Value grade of B, while NABZY has a Value grade of D, reflecting BSBR's superior valuation metrics [6] - Stronger estimate revision activity and more attractive valuation metrics position BSBR as the preferred choice for value investors [7]

Core Viewpoint - The National Australia Bank (NAB) forecasts that the official cash rate (OCR) set by the Reserve Bank of Australia (RBA) will decrease to 2.6% by February next year [1] Group 1 - NAB's prediction indicates a significant shift in monetary policy, reflecting expectations of economic conditions that may warrant lower interest rates [1] - The anticipated reduction in the OCR could influence borrowing costs and consumer spending in the Australian economy [1] - This forecast aligns with broader trends observed in global monetary policy adjustments as central banks respond to economic indicators [1]

Core Insights - Investors are considering Banco Santander (SAN) and National Australia Bank Ltd. (NABZY) for potential value opportunities in the Banks - Foreign sector [1] Valuation Metrics - Banco Santander has a Zacks Rank of 2 (Buy), indicating a more favorable earnings estimate revision activity compared to National Australia Bank Ltd., which has a Zacks Rank of 3 (Hold) [3] - SAN's forward P/E ratio is 7.72, significantly lower than NABZY's forward P/E of 14.41, suggesting SAN may be undervalued [5] - The PEG ratio for SAN is 0.81, while NABZY's PEG ratio is 7.67, indicating SAN's expected earnings growth is more favorable [5] - SAN's P/B ratio is 0.93, compared to NABZY's P/B of 1.57, further supporting SAN's valuation attractiveness [6] Value Grades - Based on various valuation metrics, SAN holds a Value grade of A, while NABZY has a Value grade of D, indicating SAN is perceived as a better value investment [6][7]

Core Viewpoint - The Bank of East Asia Ltd. (BKEAY) is currently viewed as a more attractive investment option compared to National Australia Bank Ltd. (NABZY) for value investors seeking undervalued stocks [1][3][7] Valuation Metrics - BKEAY has a forward P/E ratio of 6.25, significantly lower than NABZY's forward P/E of 14.37 [5] - The PEG ratio for BKEAY is 0.80, indicating a favorable valuation in relation to its expected earnings growth, while NABZY's PEG ratio is much higher at 7.64 [5] - BKEAY's P/B ratio stands at 0.25, which is substantially lower than NABZY's P/B ratio of 1.57, suggesting that BKEAY is undervalued relative to its book value [6] Zacks Rank and Style Scores - BKEAY holds a Zacks Rank of 2 (Buy), indicating positive earnings estimate revisions, while NABZY has a Zacks Rank of 4 (Sell) [3] - BKEAY has earned a Value grade of A, contrasting with NABZY's Value grade of F, highlighting BKEAY's stronger position in terms of value metrics [6]

Financial Data and Key Metrics Changes - Cash earnings decreased by 8.1% year-over-year, primarily due to a 6.9% decrease in underlying earnings resulting from lower revenue and higher costs [7][34] - The cash return on equity declined to 11.6%, aligning with returns achieved in 2022 [11] - The final dividend of $0.85 brings the full-year dividends to $1.69, representing 73.7% of cash earnings for the year [12] Business Line Data and Key Metrics Changes - Business and Private Banking saw a 42% growth in lending balances over the past four years, with a solid half showing underlying profit growth of approximately 2% to 2.5% [10][36] - Personal Banking experienced a 5.6% growth in underlying profit as margins stabilized [37] - Home lending strategy focuses on delivering a seamless customer experience, with returns gradually improving due to stable pricing and lower funding costs [28] Market Data and Key Metrics Changes - Business credit growth was 7.5% in 2024, expected to moderate to around 5% in 2025, remaining stronger than housing credit growth [74] - The New Zealand economy faced challenges, but BNZ has grown market share in both lending and deposits [11] Company Strategy and Development Direction - The company aims to be the most customer-centric organization in Australia and New Zealand, focusing on improving customer experiences and simplifying processes [15][18] - There will be a modest increase in investment spend to approximately $1.8 billion in FY '25, targeting improved customer advocacy and technology modernization [50] - The company maintains a disciplined approach to managing costs while prioritizing major projects like the AUSTRAC EU and Citi migration [77] Management's Comments on Operating Environment and Future Outlook - The Australian economy is expected to remain resilient, with a gradual easing cycle anticipated from early 2025 [72] - Despite challenges, business activity levels remain robust, supported by high levels of capacity utilization [73] - The company is optimistic about managing through economic cycles while finding opportunities for long-term growth [75] Other Important Information - The total collective provision balance at September was $5.2 billion, including around $1.9 billion of forward-looking provisions [13] - The liquidity coverage ratio and net stable funding ratio are well above minimum requirements, with a focus on growing customer deposits [14][69] Q&A Session Summary Question: Margin outlook and deposit pricing - The company noted a four basis point headwind to NIM from deposits, with a split of two basis points from deposit mix and one from term deposit pricing [80][82] - Deposit pricing in Australia has been stable, with some lag in New Zealand [83] Question: Credit quality in Retail and SME Banking - Hardship requests peaked in mid-year but have since plateaued, indicating a potential stabilization in housing asset quality [84][85] - The SME cycle is expected to lag the consumer cycle, with the company prepared for potential deterioration in asset quality [87] Question: Business Banking margins and competition - The decline in Business Bank margin is primarily due to deposit side pressures, with strong competition in the sector [89][91] - The company remains confident in its long-term relationships and market position despite competitive pressures [92] Question: Trends in deposit mix - A healthy majority of savings balances are in higher rate accounts, with approximately 70% earning higher rates [95][96] - The Business Bank also has significant balances in high net worth offerings, contributing to the overall deposit mix [97]

Group 1 - The company reported sound financial results for the full year 2024, with the second half benefiting from a more stable operating environment [4] - The Australian economy has shown resilience despite the impact of higher interest rates [4] Group 2 - The presentation included an overview of the company's performance and outlook for the second half of the year [3] - The conference call featured participation from various financial institutions, indicating strong interest from analysts and investors [1][2]

Investors interested in Banks - Foreign stocks are likely familiar with Woori Bank (WF) and National Australia Bank Ltd. (NABZY) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look. Right now, Woori Bank is sporting a Zacks Rank of #2 (Buy), while National Australia Bank Ltd. has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfor ...

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Financial Data and Key Metrics Changes - The interim dividend of $0.84 represents 74% of cash earnings for the half, reflecting a stable performance despite competitive pressures [27] - Cash earnings fell 3.1% over the half, with lower impairment charges offset by an increase in the effective tax rate [41] - The common equity Tier 1 (CET1) ratio stands at 12.15%, comfortably above the target range of 11% to 11.5% [28][51] Business Line Data and Key Metrics Changes - Underlying profit in Personal Banking declined by 9% this half, while New Zealand Banking delivered a strong performance with a 4% increase in underlying earnings [42] - The Corporate and Institutional Banking division saw an increase in return on equity (ROE) of 520 basis points to 16.3% over the last three years [31] - Business lending grew by 35% over three years, with total business deposits growing well above the system [32] Market Data and Key Metrics Changes - The Australian housing lending market remains highly competitive, with margins under pressure, but there are signs of stabilizing margins due to improved front book pricing [36] - The overall economic environment in Australia is holding up, with real GDP growth expected to remain below trend rates of less than 2% in 2024 [76] - The liquidity coverage ratio (LCR) is slightly lower at 139%, reflecting a reduced level of average liquid asset holdings [75] Company Strategy and Development Direction - The company aims to maintain a disciplined approach to growth while focusing on customer-centricity and simplification of processes [53] - There is a strong emphasis on improving digital capabilities and customer experiences, particularly in unsecured lending and business banking [46][67] - The company plans to continue its on-market share buyback program, increasing it by $1.5 billion, reflecting strong capital levels [28][51] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges posed by higher interest rates and inflation on households, but remains optimistic about the resilience of the Australian economy [76] - The company is focused on supporting customers facing financial difficulties and has seen a rise in demand for assistance from community organizations [29] - Management emphasizes the importance of disciplined execution and continuous improvement in customer service and operational efficiency [53][66] Other Important Information - Credit impairment charges reduced to $363 million or 10 basis points of gross loans and advances, reflecting a mix of volume growth and asset quality deterioration [37][50] - The company has released $40 million from forward-looking provisions, indicating an improved outlook for certain sectors [50] - The company has been actively working on fraud prevention, recovering over $260 million in scam losses for customers since September 2021 [44] Q&A Session Summary Question: Capital levels and buyback strategy - The company is comfortable operating within the target range of 11% to 11.5% for CET1 ratio, even after the buyback [55][56] Question: Customer-centricity and NPS performance - Management acknowledges a decline in the Net Promoter Score (NPS) and attributes it to KYC remediation efforts, emphasizing the need for better management of customer interactions [57][66] Question: Business & Private Bank pipeline and SME growth - The immediate pipeline for SME growth remains strong, but management anticipates a moderation in growth later in the year [63] Question: Impact of interest rates on ROE - The return on equity has benefited from rising interest rates, but management is mindful of potential declines in a lower rate environment [65]

National Australia Bank Ltd. (NABZY) could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #2 (Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change.The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.Individu ...