Equity Analysis /

Banks: The key themes for the industry, and the stocks and markets most impacted

  • We have identified 29 themes for the banking sector – 13 positive and 16 negative

  • We map our markets and stocks against these themes

  • Sector drivers include: asset quality, liquidity conditions, technology and international expansion

Rahul Shah
Rahul Shah

Head of Corporate & Thematic Research

Rohit Kumar
Rohit Kumar

Global Financials/Thematics

Tellimer Research
23 January 2020
Published byTellimer Research

Our frontier and emerging market coverage of 91 banks in 20 markets enables us to draw parallels across the industry. We have identified 29 themes for the banking sector – 13 positive and 16 negative – and mapped our markets and stocks against them. 

From oil prices to IFRS introduction, domestic loan demand to weak capitalisation, we show the stocks and markets most exposed and/or most likely to benefit from these themes.

Full details for all markets and stocks are presented in the table on page 2.

At the country level, examples include:

External drivers

  • Monetary outlook: Loosening in Egypt, Ghana; tightening in Russia, Argentina
  • Fiscal outlook: Loosening in Sri Lanka, Ghana; tightening in Saudi Arabia
  • Crowding out of the private sector in Egypt, Ghana, Kenya, Nigeria
  • Regulations: Tightening in Vietnam, volatile in Bangladesh, Nigeria

Sector drivers

  • Asset quality: Improving in Egypt, Ghana, Mauritius, deteriorating in Pakistan
  • Liquidity conditions: Easing in Bangladesh; tightening in Saudi, Vietnam
  • Intra-sector performance divergence is wide in Bangladesh, Egypt, Kenya, Nigeria, Sri Lanka, Vietnam; stock-picking remains key
  • International expansion is taking place in Nigeria, Kenya, Mauritius, despite investors’ limited appetite for such strategies
  • Technology is having a growing influence, notably in Nigeria and Kenya, but banks in all markets are having to rapidly adapt
  • Capital ratios are strong in many markets, notably Ghana, Nigeria, Saudi; this should help protect dividend yields
  • Fee income: Increasingly in focus in Ghana, Nigeria, Vietnam

Investment recommendations

Our top picks, based on our view of the fundamental outlook for these names, are the following:

  • Small-cap: BRAC BD, HNB SL, CIEB EY, GCB GN


This is an extract from our full report on Banks in 2020, published 8 January, in which we cover each country in depth, provide full valuations and sector outlooks for 2020 and 2021, and give our investment case for our eight top picks. You can access the report here.