Research and consultancy, Tabbush Report

Daniel Tabbush

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>New high frequency data from the Fed in its weekly H8 series for US banks, shows loan growth at 5.22% YoY in week 12 November</li>
<li>There has not been a higher rate in a long time, since mid FY23 where the data is distorted from a low base effect in FY22</li>
<li>Steepening slope of weekly loan growth together with no real rise in loan loss allowance, gives a strong view of US credit metrics, demand</li>
</ul>


New high frequency data from the Fed in its weekly H8 series for US banks, shows loan growth at 5.22% YoY in week 12 November
There has not been a higher rate in a long time, since mid FY23 where the data is distorted from a low base effect in FY22
Steepening slope of weekly loan growth together with no real rise in loan loss allowance, gives a strong view of US credit metrics, demand


US Banks - New HFD Shows Loans Accelerating Further at 5.22% YoY, Highest Pace in 2 Years

<ul>
<li>The amount of deposits in the US banking system are substantial in absolute terms and compared with recent periods and older periods</li>
<li>Of the USD17.4tr in deposits in the US banking system, 86% is liquid, available to access</li>
<li>Alongside concerns about the S&amp;P 500 Index or the broad US stock market, we believe it is worthwhile to keep in mind the amount of depositor liquidity</li>
</ul>


The amount of deposits in the US banking system are substantial in absolute terms and compared with recent periods and older periods
Of the USD17.4tr in deposits in the US banking system, 86% is liquid, available to access
Alongside concerns about the S&amp;P 500 Index or the broad US stock market, we believe it is worthwhile to keep in mind the amount of depositor liquidity


US Stock Market - US Banks Have Total Deposits of USD17.4tr, Which Was USD3-4tr ~30 Yrs Ago

<ul>
<li>There is good HFD out from the Fed on weekly balance sheets and commercial paper outstanding, suggesting continued underlying strength</li>
<li>CP outstanding for non-financials is rising at rate of 19% YoY in most recent week, which is relatively strong growth for short duration working capital</li>
<li>Weekly loan growth data is 5.09% YoY for week of 5 November, one of highest growth rates in recent weeks, with LDR expansion accelerating</li>
</ul>


There is good HFD out from the Fed on weekly balance sheets and commercial paper outstanding, suggesting continued underlying strength
CP outstanding for non-financials is rising at rate of 19% YoY in most recent week, which is relatively strong growth for short duration working capital
Weekly loan growth data is 5.09% YoY for week of 5 November, one of highest growth rates in recent weeks, with LDR expansion accelerating


US Banks - CP at +19% YoY, LDR Expansion Accelerates, Weekly Loans +5% YoY

<ul>
<li>HKMA data shows the loss loan ratio in HK is up 7.5x from FY19 to 2Q25. These are the worst of the worst bad loans </li>
<li>Substandard loan ratio in HK is up 4.7x over the same period, and this bucket can gradually migrate to worse buckets, requiring more credit costs</li>
<li>Overdue loan ratio and rescheduled loan ratio in HK is up 5.4x over this period, and these are not technically NPLs</li>
</ul>


HKMA data shows the loss loan ratio in HK is up 7.5x from FY19 to 2Q25. These are the worst of the worst bad loans 
Substandard loan ratio in HK is up 4.7x over the same period, and this bucket can gradually migrate to worse buckets, requiring more credit costs
Overdue loan ratio and rescheduled loan ratio in HK is up 5.4x over this period, and these are not technically NPLs


HSBC - Loss Loans up 7.5x from FY19 to 2Q25 in HKMA Industry Data. Hang Seng Bank Buyout, Now?

Equity Bottom-Up

HSBC Holdings plc is the holding company for the HSBC Group. The Company provides a variety of international banking and financial services, including retail and corporate banking, trade, trusteeship, securities, custody, capital markets, treasury, private and investment banking, and insurance.  The Group operates worldwide.

<ul>
<li>We focus on the worsening credit metrics at HSBC, especially where stage 2 loan growth is not being matched by ECL</li>
<li>There appears to be great deterioration in 3Q25 alone for its HK and CH commercial real estate lending, just as it raises its investment in Hang Seng Bank</li>
<li>With migration from stage 2 to stage 3 in some regions being likely, there is every likelihood that HSBC will see continued high growth in credit costs</li>
</ul>


We focus on the worsening credit metrics at HSBC, especially where stage 2 loan growth is not being matched by ECL
There appears to be great deterioration in 3Q25 alone for its HK and CH commercial real estate lending, just as it raises its investment in Hang Seng Bank
With migration from stage 2 to stage 3 in some regions being likely, there is every likelihood that HSBC will see continued high growth in credit costs


HSBC - 3Q25 Results Are Out, Major Deterioration in Credit Metrics