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>Where there are many other areas of interest in Asia, globally, the figures just out for Bangkok Bank are incredible to us, not in a positive way.</li>
<li>The bank has seen its NPLs rise from THB71bn to THB85bn to THB92bn from 4Q23 to 2Q24 to 3Q24, putting YTD growth at 29%</li>
<li>The bank has more than 1/4 of its loans in manufacturing &amp; commercial where loan balances are down 4.0% YTD and down 4.3% QoQ</li>
</ul>


Where there are many other areas of interest in Asia, globally, the figures just out for Bangkok Bank are incredible to us, not in a positive way.
The bank has seen its NPLs rise from THB71bn to THB85bn to THB92bn from 4Q23 to 2Q24 to 3Q24, putting YTD growth at 29%
The bank has more than 1/4 of its loans in manufacturing &amp; commercial where loan balances are down 4.0% YTD and down 4.3% QoQ


Bangkok Bank - BBL Sees 29% Higher NPLs YTD and Core Manufacturing & Commercial Loans -4% YTD

Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

<ul>
<li>Krung Thai is our sole best value pick among the Thai banks, having solid post-provision profitability, near double digit ROE, a sound balance sheet and attractive PBV and PE ratios</li>
<li>We downgrade Kasikorn from buy to neutral, as it has an unattractive PEG and we believe it is more exposed to credit quality deterioration and potential cost of risk reversal</li>
<li>Bank Ayudhya is suffering from further credit quality deterioration which led to spike in its cost of risk; it now has the lowest NPL coverage relative to the peer group</li>
</ul>


Krung Thai is our sole best value pick among the Thai banks, having solid post-provision profitability, near double digit ROE, a sound balance sheet and attractive PBV and PE ratios
We downgrade Kasikorn from buy to neutral, as it has an unattractive PEG and we believe it is more exposed to credit quality deterioration and potential cost of risk reversal
Bank Ayudhya is suffering from further credit quality deterioration which led to spike in its cost of risk; it now has the lowest NPL coverage relative to the peer group


Thai Banks 2Q24 Screener; We Stick with Krung Thai for Best Value, We Downgrade Kasikorn to Neutral

Product Marketing Manager, Criat

Raghav Chandra Mathur

Product Marketing Manager

Next-Generation Credit Analytics Provider

Criat

Criat specializes in new-generation data-driven credit analytics. Leveraging our industry-leading DeepCredit analytical technologies, we produce daily-updated forward-looking credit assessment and valuation to help financial institutions stay ahead of risks. Coupled with use-case-driven applications, we extract insights, answer questions and enable smarter credit decisions.

Thematic (Sector/Industry)

<ul><li>The strong showing of economic data from the US for the first three months of 2024 has spurred bets that the Federal Reserve’s is going to delay cutting rates towards the latter half of this year.</li><li>The narrative surrounding ‘imminent’ rate cuts that dominated market perception near the end of last year has been thwarted by the Fed’s chair Jerome Powell suggesting that rates are likely to remain elevated, without the market completely discounting the possibility of further rate hikes.</li><li>The immediate fallout from the higher-than-expected March inflation figures led to a systematic drop in Asian currencies, especially for some ASEAN based currencies, such as the Malaysian Ringgit, that have already been embattled by weakening currency against the dollar since the start of this year.</li></ul>

The strong showing of economic data from the US for the first three months of 2024 has spurred bets that the Federal Reserve’s is going to delay cutting rates towards the latter half of this year.The narrative surrounding ‘imminent’ rate cuts that dominated market perception near the end of last year has been thwarted by the Fed’s chair Jerome Powell suggesting that rates are likely to remain elevated, without the market completely discounting the possibility of further rate hikes.The immediate fallout from the higher-than-expected March inflation figures led to a systematic drop in Asian currencies, especially for some ASEAN based currencies, such as the Malaysian Ringgit, that have already been embattled by weakening currency against the dollar since the start of this year.

Strong ASEAN Banks Poised Well to Face Uncertain Rate Outlook

<ul>
<li>It's the largest bank by assets in Indonesia, but its loan growth is about 2x the country aggregate growth rate. </li>
<li>NPL decline is stronger than most all banks in the country over the past few years, implications for credit costs are positive. </li>
<li>Boring old costs should not be ignored, especially where they are driving radical expansion of ROA. </li>
</ul>


It's the largest bank by assets in Indonesia, but its loan growth is about 2x the country aggregate growth rate. 
NPL decline is stronger than most all banks in the country over the past few years, implications for credit costs are positive. 
Boring old costs should not be ignored, especially where they are driving radical expansion of ROA. 


Bank Mandiri - All Cylinders Firing Strong

Independent Asian Credit Research, Bondcritic

Warut Promboon

Independent Asian Credit Research

Asian Fixed Income/Frontier Market Research

Bondcritic

Bondcritic, established in 2009, is designed to be an independent credit research voice that helps investors gain insights and unbiased analyses on Asian fixed income market. Our mission is to discover deep-value Asian high-yield and distressed bonds with a bottom-up approach, together with the help of our proprietary ESG (Environmental, Social Development, and Governance) model. At the same time, we focus on bringing investment cases of unrated and unloved issuers to the general public.

Macroeconomics

<ul>
<li>Thai equities lack growth and innovation. Big corporations continue to have unfair advantages in terms of access to bank financing and business opportunities.</li>
<li>Thailand is an aging society with rising income disparity and a stalling education system. Hence, we have questioned how Thailand will escape the middle income trap in the near term.</li>
<li>We expect more disruptions and policy blunders which could impair Thai stock performance. We do not believe Thailand can correct its cause in the near term.</li>
</ul>


Thai equities lack growth and innovation. Big corporations continue to have unfair advantages in terms of access to bank financing and business opportunities.
Thailand is an aging society with rising income disparity and a stalling education system. Hence, we have questioned how Thailand will escape the middle income trap in the near term.
We expect more disruptions and policy blunders which could impair Thai stock performance. We do not believe Thailand can correct its cause in the near term.


Thailand

SCB X Public Company Limited provides banking services. The Bank offers accounts, loans, cards, deposits, insurance, investment, payment, digital banking, and other related services. SCB X serves customers worldwide.

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Siam Commercial Bank (SCB TB)

Bangkok Bank - BBL Sees 29% Higher NPLs YTD and Core Manufacturing & Commercial Loans -4% YTD

BBL is seeing dwindling loan balances in its core segment - manufacturing and commercial loans are -4% YTD. And what's worse: its NPLs are surging,...

Daniel Tabbush

Thai Banks 2Q24 Screener; We Stick with Krung Thai for Best Value, We Downgrade Kasikorn to Neutral

Krung Thai is our value Thai bank pick, with best of peers ROE and a strong balance sheet, while Kasikorn is downgraded to neutral due to credit...

Victor Galliano

Strong ASEAN Banks Poised Well to Face Uncertain Rate Outlook

The strong showing of economic data from the US for the first three months of 2024 has spurred bets that the Federal Reserve’s is going to delay...

Criat

Bank Mandiri - All Cylinders Firing Strong

BMRI reveals cyclical and structural strength to such as a degree that its ROA is highest in its history. Loan growth, NPL decline, lower operating...

Daniel Tabbush

Thailand: Aging Poor

The political uncertainty in the past 2 decades has not subsided, in our judgment. We then expect more unpredictable disruptions and policy...

Bondcritic

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Bangkok Bank - BBL Sees 29% Higher NPLs YTD and Core Manufacturing & Commercial Loans -4% YTD

BBL is seeing dwindling loan balances in its core segment - manufacturing and commercial loans are -4% YTD. And what's worse: its NPLs are surging,...

Daniel Tabbush

Thai Banks 2Q24 Screener; We Stick with Krung Thai for Best Value, We Downgrade Kasikorn to Neutral

​Krung Thai is our value Thai bank pick, with best of peers ROE and a strong balance sheet, while Kasikorn is downgraded to neutral due to credit...

Victor Galliano

Strong ASEAN Banks Poised Well to Face Uncertain Rate Outlook

The strong showing of economic data from the US for the first three months of 2024 has spurred bets that the Federal Reserve’s is going to delay...

Criat

Bank Mandiri - All Cylinders Firing Strong

BMRI reveals cyclical and structural strength to such as a degree that its ROA is highest in its history. Loan growth, NPL decline, lower operating...

Daniel Tabbush

Thailand: Aging Poor

The political uncertainty in the past 2 decades has not subsided, in our judgment. We then expect more unpredictable disruptions and policy...

Bondcritic

Krung Thai is our value Thai bank pick, with best of peers ROE and a strong balance sheet, while Kasikorn is downgraded to neutral due to credit...