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>Terms of credit on US credit card loans have surged to levels well higher than any period on record, since 1972 suggesting far worse delinquencies, risk aversion by lenders. </li>
<li>There are important implications for the 2nd and 3rd order effects on consumption in the US economy, as well as obvious 1st order implications for banks, card issuers. </li>
<li>In September 2022 delinquent card loans rates bottomed at 7.6% and this delinquency rate is now at 9.7% in December 2023. </li>
</ul>


Terms of credit on US credit card loans have surged to levels well higher than any period on record, since 1972 suggesting far worse delinquencies, risk aversion by lenders. 
There are important implications for the 2nd and 3rd order effects on consumption in the US economy, as well as obvious 1st order implications for banks, card issuers. 
In September 2022 delinquent card loans rates bottomed at 7.6% and this delinquency rate is now at 9.7% in December 2023. 


US Banks - No Period on Record Since 1972 Shows Terms on Credit Card Loans so Poor

Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hdfc-bank-ltd-4b6b7a92-9087-468d-9dbe-ab169e77f014" target="_blank" data-smartkarma-citation="entities:558:1" rel="noopener">HDFC Bank (HDFCB IN)</a> 's operating engine has decelerated across loan growth, NII, and productivity, while provisioning has turned volatile and ROE/ROA declined faster than ICICI or SBI.</li>
<li>Over the recent period, governance concerns compounded: whistleblower complaints nearly doubled, the chairman resigned citing unspecified ethics concerns, and the CEO opted not to seek reappointment.</li>
<li>
<a href="https://www.smartkarma.com/entities/hdfc-bank-ltd-4b6b7a92-9087-468d-9dbe-ab169e77f014" target="_blank" data-smartkarma-citation="entities:558:1" rel="noopener">HDFC Bank (HDFCB IN)</a> remains the sole laggard in a global peer set, with no signs the trend is turning and hence, capital probably is better deployed exploring opportunities globally.</li>
</ul>



HDFC Bank (HDFCB IN) 's operating engine has decelerated across loan growth, NII, and productivity, while provisioning has turned volatile and ROE/ROA declined faster than ICICI or SBI.
Over the recent period, governance concerns compounded: whistleblower complaints nearly doubled, the chairman resigned citing unspecified ethics concerns, and the CEO opted not to seek reappointment.

HDFC Bank (HDFCB IN) remains the sole laggard in a global peer set, with no signs the trend is turning and hence, capital probably is better deployed exploring opportunities globally.


HDFC Bank (HDFCB IN) | Signals the Board & Investors Ignored

<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

<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

<ul>
<li>The data coming out of US bank results should not surprise and it is also not something that should suddenly improve</li>
<li>BAC reported net charge offs at USD1,498m in 1Q24 up from USD807m in 1Q23, a substantial YoY delta. The QoQ delta is accelerating too, up USD306m in the 90 days</li>
<li>Net interest income is now in decline at BAC at -3% YoY in 1Q24, given the disproportionate rise in funding costs vs interest income</li>
</ul>


The data coming out of US bank results should not surprise and it is also not something that should suddenly improve
BAC reported net charge offs at USD1,498m in 1Q24 up from USD807m in 1Q23, a substantial YoY delta. The QoQ delta is accelerating too, up USD306m in the 90 days
Net interest income is now in decline at BAC at -3% YoY in 1Q24, given the disproportionate rise in funding costs vs interest income


BAC - Net Charge Offs Up 86% YoY And -3% YoY Net Interest Income Growth

United States

Bank of America Corporation accepts deposits and offers banking, investing, asset management, and other financial and risk-management products and services.  The Company has a mortgage lending subsidiary, and an investment banking and securities brokerage subsidiary.

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Bank Of America (BAC US)

US Banks - No Period on Record Since 1972 Shows Terms on Credit Card Loans so Poor

Terms of credit on card loans in the US are worse than any time since the series begins in 1972. This is not simply a following of Fed Funds rates,...

Daniel Tabbush

HDFC Bank (HDFCB IN) | Signals the Board & Investors Ignored

A chairman's abrupt exit. Whistleblowers up 82%. Decelerating growth. HDFC Bank's numbers were flashing red — the board and bulls looked away.

Pranav Bhavsar

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

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

BAC - Net Charge Offs Up 86% YoY And -3% YoY Net Interest Income Growth

BAC now shows two consecutive quarters of negative net interest income growth, and in 1Q24 it also shows substantially higher total net charge...

Daniel Tabbush

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