Asian bank research and consultancy, Tabbush Report

Daniel Tabbush

Asian bank research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

Thematic (Sector/Industry)

<ul>
<li>Weekly high frequency data on US banks shows a major slow down continuing in residential mortgage loan growth</li>
<li>Mortgage loan applications index shows some of the worst figures in years in the latest weekly data</li>
<li>Core net interest income and credit costs can surprise even from an area that is traditionally not risky compared with CRE and C&amp;I loans</li>
</ul>


Weekly high frequency data on US banks shows a major slow down continuing in residential mortgage loan growth
Mortgage loan applications index shows some of the worst figures in years in the latest weekly data
Core net interest income and credit costs can surprise even from an area that is traditionally not risky compared with CRE and C&amp;I loans


US Banks - Residential Mortgage Loans Weekly Data Is Dismal

Equity Bottom-Up

Hong Kong Exchanges & Clearing Limited owns and operates the stock exchange, futures exchange, and their related clearing houses in Hong Kong.  The Company provides the trading platforms for a range of cash and derivatives products and the facilities for processing trades.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hong-kong-exchanges-clearing" target="_blank" data-smartkarma-citation="entities:490:1" rel="noopener">HKEX (388 HK)</a> outlook has been withering for some time, and new data on property transactions, shows that this remains weak.</li>
<li>
<a href="https://www.smartkarma.com/entities/singapore-exchange-ltd" target="_blank" data-smartkarma-citation="entities:1047:1" rel="noopener">SGX (SGX SP)</a> in a less volatile geopolitical financial center, has a much lower market capitalization while its earnings outlook is far stronger.</li>
<li>Two major differences between these two entities is their ROE and ROA, although the former may be more relevant. <a href="https://www.smartkarma.com/entities/singapore-exchange-ltd" target="_blank" data-smartkarma-citation="entities:1047:1" rel="noopener">SGX (SGX SP)</a> has an ROE that is nearly 50% higher. </li>
</ul>



HKEX (388 HK) outlook has been withering for some time, and new data on property transactions, shows that this remains weak.

SGX (SGX SP) in a less volatile geopolitical financial center, has a much lower market capitalization while its earnings outlook is far stronger.
Two major differences between these two entities is their ROE and ROA, although the former may be more relevant. SGX (SGX SP) has an ROE that is nearly 50% higher. 


HKEX - Worsening Property Transactions, Underscores Ailments for Hong Kong

<ul>
<li>Japan's domestic credit growth is now running at 4.2% YoY in the latest month in February 2024. </li>
<li>The slope of Japan's domestic credit growth is greater than all developed Asia Pacific peer countries.</li>
<li>Weaker JPY can further raise interest in tourism, and USD translation of earnings for megabanks.</li>
</ul>


Japan's domestic credit growth is now running at 4.2% YoY in the latest month in February 2024. 
The slope of Japan's domestic credit growth is greater than all developed Asia Pacific peer countries.
Weaker JPY can further raise interest in tourism, and USD translation of earnings for megabanks.


Japan - Domestic Credit Growth Acceleration Higher Than Developed Asian Countries

<ul>
<li>New quarterly data from Zions shows huge growth in time deposits, and also far worse credit metrics in commercial real estate and home equity loans</li>
<li>Cadence reveals incredibly high growth of net charge offs in the year, but also far worse credit costs and NPLs</li>
<li>None of this should surprise, and we remind that often banks reveal worsening credit metrics with some lag - it not always immediate, neat, simple </li>
</ul>


New quarterly data from Zions shows huge growth in time deposits, and also far worse credit metrics in commercial real estate and home equity loans
Cadence reveals incredibly high growth of net charge offs in the year, but also far worse credit costs and NPLs
None of this should surprise, and we remind that often banks reveal worsening credit metrics with some lag - it not always immediate, neat, simple 


US Banks - Zions Reporting 195% Higher Time Deposits, Cadence Reporting 926% Higher Net Charge Offs

SBI Sumishin Net Bank  / Equity Bottom-Up

SBI Sumishin Net Bank, Ltd. offers general banking services. The Company provides transfer accounts, deposits, currency savings, mortgages, net loans, investment trusts, insurance products, and other banking services. SBI Sumishin Net Bank offers services to individuals and businesses.

<ul>
<li>This is not a typo: SBI Sumishin Net Bank saw loans up 21% YoY in 1Q24, operating in Japan</li>
<li>The bank has achieved cost scale, with acquisition cost per account a fraction of 2 yrs ago</li>
<li>Credit quality remains exceptional, amongst best in Japan, with 0.06% NPL ratio in 1Q24</li>
</ul>


This is not a typo: SBI Sumishin Net Bank saw loans up 21% YoY in 1Q24, operating in Japan
The bank has achieved cost scale, with acquisition cost per account a fraction of 2 yrs ago
Credit quality remains exceptional, amongst best in Japan, with 0.06% NPL ratio in 1Q24


SBI Sumishin Net Bank - Dramatic ROA Expansion, Steady & Strong, Profit & Loan Growth, ROE at 19%

Tabbush Report
Asian bank research, without the noise.

US Banks - Residential Mortgage Loans Weekly Data Is Dismal

Residential mortgage loan data is dismal and worsening for US banks, which we see in weekly data of loan growth and in the Mortgage Bankers Loan...

Daniel Tabbush

HKEX - Worsening Property Transactions, Underscores Ailments for Hong Kong

Results for HKEX are just out and there are not good at all, across many key line items, and with average daily trading volume with EBITDA at -20% YoY

Daniel Tabbush

Japan - Domestic Credit Growth Acceleration Higher Than Developed Asian Countries

Japan bank's domestic credit growth is stronger than most others in developed Asia, and the pace of growth is far stronger now compared with early...

Daniel Tabbush

US Banks - Zions Reporting 195% Higher Time Deposits, Cadence Reporting 926% Higher Net Charge Offs

Zions bank is reporting incredibly high time deposit growth, with negative implications for forward net interest income, and both Zions and Cade...

Daniel Tabbush

SBI Sumishin Net Bank - Dramatic ROA Expansion, Steady & Strong, Profit & Loan Growth, ROE at 19%

9.6% move upward today is sizeable even with recent volatility. We continue to like this bank in Japan, which tends to have better financial...

Daniel Tabbush