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.

Equity Bottom-Up

<ul>
<li>There are few large US banks where quarterly net interest income is more than 1.6x higher now on average than in late FY19 and early FY20</li>
<li>JPM demonstrates some of the best asset-liability management (ALM) of any major bank in the US</li>
<li>Other risks and parts of the business appear to be very well managed too, including credit risk and operating costs</li>
</ul>


There are few large US banks where quarterly net interest income is more than 1.6x higher now on average than in late FY19 and early FY20
JPM demonstrates some of the best asset-liability management (ALM) of any major bank in the US
Other risks and parts of the business appear to be very well managed too, including credit risk and operating costs


JPM - Exceptional Core Income Strength, ALM Is Excellent, HFD for US Banks Supports Outlook

<ul>
<li>Chailease offers an alternative view on China lending than the large mainstream banks there</li>
<li>Data through 9M24 shows very high growth of its China impairment costs at +62% YoY</li>
<li>Its lending in China is slowing sharply, often a reaction to worsening credit metrics</li>
</ul>


Chailease offers an alternative view on China lending than the large mainstream banks there
Data through 9M24 shows very high growth of its China impairment costs at +62% YoY
Its lending in China is slowing sharply, often a reaction to worsening credit metrics


Chailease - A Window on China Lending, +62% Impairment Costs, Decelerating Loan Growth in China

<ul>
<li>Headlines of UOB 3Q24 while strong at the bottom line, we have a very different read of the numbers </li>
<li>Investment &amp; trading income is more than the whole delta in UOB's net profit during 3Q24 YoY and QoQ</li>
<li>Operating costs rose 12% YoY, while net interest income was up just 1% YoY and core net fee income was up 7% YoY</li>
</ul>


Headlines of UOB 3Q24 while strong at the bottom line, we have a very different read of the numbers 
Investment &amp; trading income is more than the whole delta in UOB's net profit during 3Q24 YoY and QoQ
Operating costs rose 12% YoY, while net interest income was up just 1% YoY and core net fee income was up 7% YoY


UOB - Profit +SGD228m YoY, Trading & Investment Income +SGD320m YoY, 3Q24 Not as Great as Headline

Thematic (Sector/Industry)

<ul>
<li>We must recognize the wide variance in credit growth rates across Asian countries</li>
<li>There are critical implications for differences in net interest income growth and profit</li>
<li>Credit metrics also tend to move in tandem with loan growth rates, as does GDP growth</li>
</ul>


We must recognize the wide variance in credit growth rates across Asian countries
There are critical implications for differences in net interest income growth and profit
Credit metrics also tend to move in tandem with loan growth rates, as does GDP growth


Asian Banks - Wide Variance in Credit Growth, and in Delta of Growth Rates in Recent Months

<ul>
<li>There is a sharp and accelerating rise in deposits with Hong Kong's banks, likely from Mainland China in part</li>
<li>There is no offsetting lending volume, where loan growth remains still negative, not a positive combination for net interest income</li>
<li>The LDR for Hong Kong's banks is fast approaching the distressed levels seen during the Global Financial Crisis (GFC)</li>
</ul>


There is a sharp and accelerating rise in deposits with Hong Kong's banks, likely from Mainland China in part
There is no offsetting lending volume, where loan growth remains still negative, not a positive combination for net interest income
The LDR for Hong Kong's banks is fast approaching the distressed levels seen during the Global Financial Crisis (GFC)


HK Banks - Surging Deposits and Contracting Loans, Sees LDR Fall Toward GFC Levels

United Kingdom

Standard Chartered PLC is an international banking group operating principally in Asia, Africa, and the Middle East. The Company offers its products and services in the personal, consumer, corporate, institutional and treasury areas.

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Standard Chartered (STAN LN)

JPM - Exceptional Core Income Strength, ALM Is Excellent, HFD for US Banks Supports Outlook

JPM shows some of the best rise of quarterly net interest income in US banking, and we believe this is very much due strong ALM, which is core to...

Daniel Tabbush

Chailease - A Window on China Lending, +62% Impairment Costs, Decelerating Loan Growth in China

Chailease offers an alternative view on China lending, where its loan growth is slowing sharply, where credit costs to loans are rising...

Daniel Tabbush

UOB - Profit +SGD228m YoY, Trading & Investment Income +SGD320m YoY, 3Q24 Not as Great as Headline

UOB's results were good at bottom line, but we believe that they are misunderstood. Trading, investment income drove profit delta, not net interest...

Daniel Tabbush

Asian Banks - Wide Variance in Credit Growth, and in Delta of Growth Rates in Recent Months

There is a wide variance of domestic loan growth rates in Asian countries, one must be highly selective. There are implications for growth of net...

Daniel Tabbush

HK Banks - Surging Deposits and Contracting Loans, Sees LDR Fall Toward GFC Levels

Hong Kong's banks are seeing surge in deposits, likely from Mainland China, but this is not accompanied by loan growth, where this is in...

Daniel Tabbush

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