Vi e w p o i n t | 16 Nov 2025 10:21:02 ET │ 11 pages China Banks What's New from Citi 2025 China Conference CITI'S TAKE We hosted meetings with key China banks during our Citi China Conference during 11-14 Nov in Shenzhen and Shanghai. We summarize key takeaways below. NIM to diverge between big banks and regional banks in 2026E — NIM pressure could continue to moderate into 4Q25E given most banks have achieved 90%+ of full-year loan quota, which cools off pricing competition, although sector NIM should co ...

Aggregate net profit of state-owned, private and small-finance banks rose just 2.5% to ₹1.92 lakh crore in six months ending September, up from ₹1.87 lakh crore in the comparable period last year, showed data compiled by Indus Equity Advisors. NII, or the difference between interest earned and paid, rose just about 2% to ₹4.36 lakh crore while other income comprising treasury gains and fee income rose 19% to ₹2.06 lakh crore. The country's largest lender, the SBI chairman CS Setty told analysts during the ...

November 16, 2025 06:02 PM GMT China Financials | Asia Pacific Trip supports firm trend of more valuation re-ratings for China financials We met with banks, insurance firms and NPL AMCs last week. Financial firms generally expect stable rates and stabilizing NIM. This combined with stable credit costs could drive a rebound in revenue and profit growth in 2026. Financial firms expect stable rates with potential rebound, supporting bank NIM: Most banks indicated that new loan yields have stabilized in recent ...

The Commonwealth Bank of Australia (ASX: CBA) share price has fallen 10% since Monday, is this a good time to buy?Earlier this week, CBA released its quarterly update for the three months to 30 September 2025 and investors didn’t react very well to it. Let’s remind ourselves what the biggest bank in Australia said.Was CBA’s quarterly update disappointing?The ASX bank share reported that its cash net profit only increased by 2% year on year, which wasn’t exactly strong.In terms of lending and deposit year-on ...

Financial Data and Key Metrics Changes - Fully diluted earnings per share were $1.20, a 29% increase year-over-year and a 13% increase from the previous quarter [3] - Net interest margin improved for the sixth consecutive quarter, rising by seven basis points to 2.46% [3] - Return on common equity improved to 13.6% for the quarter [3] - Average deposits increased by 7% annualized [3] Business Line Data and Key Metrics Changes - The loan portfolio is balanced between consumer and commercial, with consumer loans representing 57% or $7.9 billion of total loans [9] - Commercial loans accounted for $6.1 billion, or 43% of total loans, with 73% secured by real estate [9] - Noninterest income increased to $46 million during the quarter, compared to $44.8 million in the linked quarter [19] Market Data and Key Metrics Changes - Bank of Hawaii advanced its number one deposit market share position in Hawaii by 40 basis points as of June 30, 2025 [4] - The bank's market share has grown by 600 basis points since 2005, outperforming competitors in the Hawaii market [4] Company Strategy and Development Direction - The company aims to leverage its dominant market position and brand strength to build wealth market share, particularly in the affluent segment [6][7] - A partnership with Saterra is expected to modernize the broker-dealer platform, enhancing client experience and attracting top advisors [7] - The bank is focused on improving coordination between commercial and wealth teams to capitalize on cross-marketing opportunities [7] Management's Comments on Operating Environment and Future Outlook - Management anticipates further expansion of net interest margin for several quarters [5] - The outlook for loan growth remains in the low single digits, with expectations for improvement in the pipeline [32] - The company is optimistic about the wealth management segment and plans to continue investing in talent and resources [37] Other Important Information - The allowance for credit losses on loans and leases ended the quarter at $148.8 million, with a ratio of 1.06% [14] - The company recorded a provision for credit losses of $2.5 million, down from $3.3 million in the previous quarter [23] - Capital ratios remained above regulatory thresholds, with tier one capital at 14.3% and total risk-based capital at 15.4% [23] Q&A Session Summary Question: Spot rate on total deposits - The spot rate on total deposits is 154 basis points [27] Question: Outlook for net interest margin (NIM) - Management believes achieving a 3% NIM is possible, with a projected increase of 25 basis points per year [30] Question: Commentary on loan growth outlook - The guidance for loan growth remains in the low single digits, with expectations for improvement in Q4 [32] Question: Changes in wealth management strategy - The partnership with Saterra is progressing well, and the bank is focused on enhancing client experience and attracting top advisors [36] Question: Capital return and buybacks - The company is likely to engage in share repurchases in the current quarter and into next year [41] Question: Credit quality in the office sector - A relationship credit in the office space was exited, contributing to the reduction in Central Business District loans [55]

Financial Data and Key Metrics Changes - Fully diluted earnings per share increased to $1.20, a 29% rise year-over-year and a 13% increase from the previous quarter [3] - Net interest margin improved for the sixth consecutive quarter, rising by seven basis points to 2.46% [3] - Return on common equity improved to 13.6% for the quarter [3] - Average deposits increased by 7% annualized [3] Business Line Data and Key Metrics Changes - Average balance of deposits contributed to the growth in net interest income, which increased by $7 million [14] - Consumer loans represented over half of total loans at 57%, amounting to $7.9 billion, with a focus on secured lending [8] - Commercial loans totaled $6.1 billion, with 73% secured by real estate [8] Market Data and Key Metrics Changes - Bank of Hawaii advanced its number one deposit market share position in Hawaii by 40 basis points as of June 30, 2025 [4] - The bank's market share has grown by 600 basis points since 2005, outperforming competitors in Hawaii [4] Company Strategy and Development Direction - The company aims to leverage its strong brand and market position to enhance its wealth management segment, which has lagged in growth [5][6] - A partnership with Saterra is expected to modernize the broker-dealer platform, enhancing client experience and attracting advisors [6] - The bank is focused on improving coordination between commercial and wealth teams to capitalize on cross-marketing opportunities [6] Management's Comments on Operating Environment and Future Outlook - Management anticipates further expansion of net interest margin in the coming quarters [5] - The bank's credit quality remains strong, with a diversified portfolio and low delinquency rates [11] - The outlook for loan growth is expected to remain in the low single digits, with improving pipelines [30] Other Important Information - Noninterest income increased to $46 million, driven by higher customer derivative activity and trust earnings [18] - The bank's capital ratios remain above regulatory thresholds, with Tier-One Capital at 14.3% [22] - A dividend of $0.70 per common share was declared for the fourth quarter of 2025 [23] Q&A Session Summary Question: Spot rate on total deposits - The total spot rate on deposits is 154 basis points [25] Question: Outlook for net interest margin (NIM) - Management believes achieving a 3% NIM is possible, with a projected increase of 25 basis points per year [26][28] Question: Loan growth outlook - The guidance for loan growth remains in the low single digits, with expectations for improvement in Q4 [30] Question: Wealth management strategy - The partnership with Saterra is progressing well, and the bank is focused on enhancing client experience and attracting top advisors [32][34] Question: Capital return and buybacks - The bank is considering share repurchases and is satisfied with current capital levels [37][38] Question: Credit quality in the office sector - A reduction in loans in the Central Business District was due to exiting a non-core relationship [44]

Financial Data and Key Metrics Changes - Net income increased compared to the second quarter, driven by higher net interest and non-interest income, partially offset by a higher effective tax rate of 23.2% in the third quarter [7][8] - Total loans declined by $223 million in the quarter, primarily in commercial and industrial (C&I) loans [9][10] - Average deposits increased by approximately $500 million in the third quarter, with commercial deposits rising by $135 million [11][12] Business Line Data and Key Metrics Changes - Non-interest income was $57.1 million in the quarter, benefiting from higher BOLI income and swap income [14] - The total cost of deposits fell by one basis point, with non-interest bearing deposits making up 33% of total deposits [13] Market Data and Key Metrics Changes - The state unemployment rate was 2.7% in August, lower than the national rate of 4.3% [5] - Year-to-date visitor spending was $4.6 billion, up 4.5% compared to the same period last year [6] Company Strategy and Development Direction - The company aims to maintain strong loan growth and is considering pool purchases in areas where it has expertise, such as residential loans in Hawaii [24][25] - The company is focused on strengthening relationships in the community to drive core deposit growth [27][28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the local economy's resilience despite potential hardships from a federal government shutdown [76][78] - The company expects to see strong loan production in the fourth quarter, with a focus on maintaining a solid credit performance [10][15] Other Important Information - The company repurchased approximately 965,000 shares at a total cost of $24 million, with $26 million remaining under the approved stock repurchase plan for 2025 [8][9] - The allowance for credit losses decreased to $165.3 million, with coverage remaining at 117 basis points of total loans and leases [16] Q&A Session Summary Question: Growth outlook and pipeline - Management noted that the third quarter saw significant paydowns in dealer floor plans but remains bullish on the business, expecting strong production in the pipeline for the fourth quarter [22][23] Question: Core deposit growth - Management highlighted success in core deposit growth driven by retail and commercial teams, with expectations for seasonal increases in deposits [26][27] Question: Managing deposit costs amid Fed cuts - Management indicated that the ability to manage deposit costs will depend on the timing and magnitude of Fed rate cuts, with expectations for continued margin expansion [31][39] Question: Capital priorities and M&A strategy - The company remains open to M&A opportunities, particularly in the Mainland, while focusing on maintaining a strong loan portfolio [46][74] Question: Impact of federal spending and local economy - Management expressed confidence in the long-term stability of federal spending in Hawaii, particularly in defense, despite current challenges [81][82]

Financial Data and Key Metrics Changes - Net income increased compared to the second quarter, driven by higher net interest and non-interest income, partially offset by a higher effective tax rate of 23.2% [4][9] - Total loans declined by approximately $223 million in the quarter, primarily in Commercial and Industrial (C&I) loans [5][6] - Net interest income was $169.3 million, an increase of $5.7 million from the prior quarter, with a net interest margin (NIM) of 3.19%, up eight basis points [9][10] Business Line Data and Key Metrics Changes - Total deposits increased by about $500 million in the third quarter, with commercial deposits rising by $135 million, while retail deposits declined by $43 million [7][8] - Non-interest income was $57.1 million, benefiting from higher swap income due to favorable market movements [10] Market Data and Key Metrics Changes - The state unemployment rate was 2.7% in August, lower than the national rate of 4.3%, with total visitor arrivals up 0.7% year-over-year [3] - Year-to-date visitor spending reached $4.6 billion, an increase of 4.5% compared to the same period last year [3] Company Strategy and Development Direction - The company aims to maintain strong loan growth, particularly in areas where it has expertise, such as residential pools of Hawaii loans and properties in Hawaii [18][19] - The investment portfolio is being held flat, with a restart of purchases after a period of letting it run down [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the local economy's resilience despite potential hardships from a federal government shutdown [52][54] - The company anticipates a strong fourth quarter, with expectations for loan growth to cover the impact of potential rate cuts [27][39] Other Important Information - The bank's credit performance remains strong, with classified assets increasing by $30.1 million due to a single borrower, and net charge-offs at $4.2 million for the quarter [11][12] - The company has a share buyback authority of $100 million, with $74 million executed so far [32] Q&A Session Summary Question: Growth outlook and pipeline demand - Management noted significant paydowns in dealer floor plans and expressed bullishness about the pipeline, expecting strong production in the fourth quarter [17][18] Question: Core deposit growth success - Success in core deposit growth attributed to strong relationship management by retail and commercial teams [20] Question: NIM management with Fed cuts - Management indicated that NIM expansion depends on the timing and magnitude of Fed rate cuts, with sufficient loan growth expected to support margin expansion [22][27] Question: M&A strategy - The company remains open to mainland M&A opportunities but has no immediate plans [30][50] Question: Impact of federal spending on Hawaii - Management believes the long-term trend of defense-focused federal spending in Hawaii will remain strong despite current uncertainties [58] Question: Changes in competitive pricing behavior - No significant changes in competitive dynamics or pricing observed in the market [60]

Financial Data and Key Metrics Changes - The company generated net income of $3,200,000 or $0.32 per diluted share in Q3 2025, representing a 45% increase from the same quarter last year [5] - Tangible book value per share increased by 1.2% this quarter [5] - Gross revenue increased by 8.7% from the prior quarter and 15.5% year over year [11] - Net interest income increased for the fourth consecutive quarter, up 8.9% from the prior quarter and 25% year over year [12] - Non-interest income increased by more than $500,000 or 8.5% from the prior quarter [13] Business Line Data and Key Metrics Changes - Loans held for investment increased by $50,000,000 from the end of the prior quarter, with new loan production of $146,000,000 in Q3 [6][8] - Total deposits increased by $320,000,000 from the end of the prior quarter, driven by new accounts and existing client balance growth [9] - Trust and investment management assets under management decreased by $64,000,000, primarily due to net withdrawals [10] Market Data and Key Metrics Changes - The average rate on new loan production was 6.38% in the quarter [8] - The spot rate on deposits at the end of the quarter was 3.04% [30] - The company achieved a beta of approximately 63% on money market accounts in Q3 [31] Company Strategy and Development Direction - The company maintains a conservative approach to new loan production while focusing on service quality rather than competing on pricing [4] - The management is optimistic about continued growth opportunities in the Colorado market due to ongoing M&A activity [16] - The company is focused on creating operating leverage by growing revenues faster than expenses, aiming for improved efficiency ratios [50] Management's Comments on Operating Environment and Future Outlook - Management sees healthy economic conditions in their markets and expects solid balance sheet growth in Q4 [17] - There are no indications of meaningful deterioration in asset quality, with positive trends expected to continue [17] - The company plans to leverage investments made in technology and team restructuring to drive future growth [79] Other Important Information - The company was named one of 16 KBW Bank honor roll members in 2025 for its performance [86] - The management is optimistic about finishing the year strong and delivering shareholder value into 2026 [87] Q&A Session Summary Question: Insights on deposit growth and its sustainability - Management indicated that the deposits seen in Q3 are expected to remain and provide a higher deposit base for Q4 [21] Question: Details on the newly added non-performing asset (NPA) - The NPA was a commercial and industrial loan that had performance issues, with a specific provision set aside for it [22][23] Question: Expectations for net interest margin (NIM) in Q4 - Management anticipates NIM expansion due to liquidity on the balance sheet being redeployed into loans, estimating a potential increase of five basis points [24][26] Question: Update on wealth management and assets under management (AUM) - The company is focused on fee income growth rather than AUM, with recent progress noted in agency accounts [33] Question: Thoughts on future loan demand and liquidity deployment - Management expects loan demand trends to continue, with a focus on gradually redeploying excess liquidity into the loan portfolio over the next year [73][75]

Core Insights - Valley National Bancorp reported strong third-quarter results with net income of approximately $163 million, or $0.28 per diluted share, marking a significant increase from $133 million, or $0.22, in the previous quarter, representing the highest quarterly profitability since 2022 [3] - The company has seen robust core customer deposit growth, with nearly 110,000 new deposit accounts added over the past twelve months, contributing to a nearly 10% growth in core deposits [4] - Valley's balance sheet remains strong, with a disciplined approach to expense control and a meaningful reduction in credit costs, achieving many profitability goals ahead of schedule, including an annualized return on average assets above 1% [3][4] Leadership Changes - Pratchett Smith joined as president of the consumer bank, bringing experience from Santander and Capital One, and will oversee retail, consumer, and small business sectors [1] - Gina Martucci was appointed president of commercial banking, contributing extensive experience from M&T Bank to support the development of Valley's commercial franchise [2] Deposit Growth and Management - The company gathered about $1 billion in core deposits during the quarter, allowing for the payoff of approximately $700 million in maturing brokered deposits, reducing brokered deposits to 11% of the total deposit base, the lowest level since 2022 [10] - The average cost of deposits has decreased by 56 basis points since 2024, with expectations for continued benefits from lower deposit costs into 2026 [4][10] Noninterest Income and Fee Growth - Noninterest income has grown at an annual rate of 15% since 2017, significantly outpacing publicly traded peers, with treasury management and tax credit advisory initiatives contributing approximately $3 million in incremental revenue during the third quarter [5] - The treasury management platform has generated nearly $16 million in incremental deposit service charge revenue on an annualized basis since 2024 [5] Credit Performance - Valley experienced a significant reduction in net charge-offs and provisions during the third quarter, with expectations to sustain these levels into the fourth quarter [6] - Cumulative commercial real estate (CRE) charge-off rates have remained low, with aggregate losses limited to just 57 basis points of average CRE loans over the last seven quarters [6][15] Strategic Focus and Future Growth - The company is targeting growth in traditional small business and middle market opportunities, particularly in healthcare C&I and capital call lines, with no losses recorded on Valley-originated loans in these areas [7] - Valley aims to enhance its retail banking presence and has identified opportunities for organic growth in small business and retail deposits [38][39] Financial Outlook - Valley anticipates net interest income growth of another 3% sequentially in the fourth quarter, supported by fixed-rate asset repricing and a favorable interest rate backdrop [13] - The company is targeting a return on tangible common equity (ROTCE) of 15% by late 2027 or early 2028, with expectations for mid-single-digit loan growth and continued margin expansion [64]