Japan Post Holdings to cut stake in Japan Post Bank
Financials
The sell-down is driven by Japan Post Holdings needing to reduce its holding to 50% or lower by Mar 26. Periscope Analytics expects to see a buyback to support the stock. The last sell-down in Mar 23 was double the size and the stock held up relatively well post the announcement. There will be passive buying from global trackers at the time of settlement of the shares. Together with the buyback, around 23-25% of the offering could be bought up in the short-term. In addition, Passive TSE Tokyo Price Index TOPIX (TPX INDEX) trackers will need to buy ~80m shares though the buying could come only in Jan 26. Japan Post Bank has underperformed its peers over the last couple of years and by a lot. This offering removes the overhang.
Edition: 206
- 07 March, 2025
Norinchukin Bank is an outlier not a sector indicator
Financials
Galliano's Financials Research
The bank plans to sell JPY10trn of foreign government bonds, crystallising a chunk of the JPY2.19trn of unrealised bond losses, as it also looks to raise JPY1.2trn. In this note, Victor Galliano explores the bigger cap banks’ foreign bond holding and unrealised gains or losses, including those of Japan Post Bank. He believes Norinchukin is a sector outlier rather than big cap bank canary in the coalmine. Victor sticks with buys on Resona, Mizuho, SMFG and Concordia.
Edition: 189
- 28 June, 2024
Financials
JPB is unlike any other bank in Japan. It is highly geared to rising US interest rates from its sizable investments there, including in CLOs. A structural decline in TEIGAKU deposits (which are longer term and higher cost than ordinary deposits) allows for better funding costs. This combination should lead to much improved NII, as interest income expands while funding costs decline. Daniel Tabbush also sees limited impairment risk and with improvements in core profit, JPB’s ROA delta can be significant given its 0.16% low ROA base. Meanwhile, the exceptionally weak JPY can further provide an impetus for increased JPY asset buying from USD holders.
Edition: 136
- 27 May, 2022