Bank IPOs Outperform Even As Broader Sector Struggles

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Includes: FHB, MSBI, PBNC, SUPV
by: Renaissance Capital IPO Research

BNP subsidiary First Hawaiian (NASDAQ:FHB) is set to raise $464 million in the largest bank IPO since RBS spin-off Citizens Financial (NYSE:CFG) in September 2014. With over $19 billion in assets, it is Hawaii's largest financial institution.

In the face of record low interest rates, Brexit uncertainty and regulatory hurdles, Financials is the worst performing S&P sector this year (-1%), despite recovering from post-Brexit lows. The three banking IPOs year to date, US-based Paragon Commercial (OTCQX:PBNC) and Midland State (MSBI) and Argentina's Grupo Supervielle (Pending:SUPV) have returned an average of 10% from their IPO price. This continues the trend of bank IPO outperformance, with 2014 deals up and average of 34% and 2015 bank debuts up 23%.

Banking IPO Statistics
Year # of banking IPOs Avg. deal size (mm) % above issue Avg. total return
2016 3 $129 100% +10%
2015 9 $40 78% +23%
2014 15 $361 87% +34%
Total 27 $228 85% +28%
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