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

<p><a href="https://www.smartkarma.com/entities/8447" target="_blank" data-smartkarma-citation="entities:8447:1">PT BFI Finance Indonesia (BFIN IJ)</a> has the second highest ROA of all 107 banks and finance companies in our Indonesia database, at 8.2% as at 2017. It is a specialty lender, focussing on leasing and consumer financing. It provides financing for new cars, used cars, motorcycles through dealers and sales representatives, consumer loans and investment leasing for new and used heavy equipment, trucks, medical devices and machinery. The range of sectors in which its clients operate includes mining, trading, construction, services, agriculture, manufacturing, transportation and infrastructure. As at 3Q18 approximately 60% of lending is consumer finance or collateralized lending, with the remainder including vehicle financing and lease financing. BFIN is the old PT Bunas Finance, before changing its name in 2001. The company stands out in Indonesia and in Asia on a multitude of variables. Its ROA last year was 8.6x higher than the full industry average in Indonesia, and even outside this profitable banking market, there are few that compare. The company appears unrecognized despite consistently superior operating metrics, perhaps due to limited analyst coverage (two analysts) and low market capitalization (US$682m). This can create an opportunity. </p>

PT BFI Finance Indonesia (BFIN IJ) has the second highest ROA of all 107 banks and finance companies in our Indonesia database, at 8.2% as at 2017. It is a specialty lender, focussing on leasing and consumer financing. It provides financing for new cars, used cars, motorcycles through dealers and sales representatives, consumer loans and investment leasing for new and used heavy equipment, trucks, medical devices and machinery. The range of sectors in which its clients operate includes mining, trading, construction, services, agriculture, manufacturing, transportation and infrastructure. As at 3Q18 approximately 60% of lending is consumer finance or collateralized lending, with the remainder including vehicle financing and lease financing. BFIN is the old PT Bunas Finance, before changing its name in 2001. The company stands out in Indonesia and in Asia on a multitude of variables. Its ROA last year was 8.6x higher than the full industry average in Indonesia, and even outside this profitable banking market, there are few that compare. The company appears unrecognized despite consistently superior operating metrics, perhaps due to limited analyst coverage (two analysts) and low market capitalization (US$682m). This can create an opportunity. 

Indonesia Banks - Exceptional ROA Still Unrecognized at PT BFI Finance

ASEAN (Indo) & China-focused. Ex-Deputy HoR UBS.

Johannes Salim, CFA

Bank Tabungan Pensiunan Nasional / Equity Bottom-Up

<ul>
<li>Excellent opex control reinforces our view on high quality management of <a href="https://www.smartkarma.com/entities/483" target="_blank" data-smartkarma-citation="entities:483:1">Bank Tabungan Pensiunan Nasional (BTPN IJ)</a>.</li>
<li>BTPN has again reinvented itself by rapidly growing SME loans, sharia loans, and consumer financing amid rough patch in micro loans segment.</li>
<li>Recent IPO of sharia subsidiary is value-unlocking for BTPN as this highlights strong fundamentals of sharia business (still consolidated given the latter's 70% ownership)</li>
<li>M&amp;A catalyst could unfold in late 2018 or early 2019 if OJK approval on <a href="https://www.smartkarma.com/entities/135" target="_blank" data-smartkarma-citation="entities:135:1">Bank Danamon Indonesia Tbk (BDMN IJ)</a> acquisition by Bank of Tokyo Mitsubishi is obtained.</li>
<li>BTPN attractively trades at 1.2x/1.08x 2018/19 PB (32-33% discount to Indo banking peers).</li>
</ul>


Excellent opex control reinforces our view on high quality management of Bank Tabungan Pensiunan Nasional (BTPN IJ).
BTPN has again reinvented itself by rapidly growing SME loans, sharia loans, and consumer financing amid rough patch in micro loans segment.
Recent IPO of sharia subsidiary is value-unlocking for BTPN as this highlights strong fundamentals of sharia business (still consolidated given the latter's 70% ownership)
M&amp;A catalyst could unfold in late 2018 or early 2019 if OJK approval on Bank Danamon Indonesia Tbk (BDMN IJ) acquisition by Bank of Tokyo Mitsubishi is obtained.
BTPN attractively trades at 1.2x/1.08x 2018/19 PB (32-33% discount to Indo banking peers).


Bank Tabungan Pensiunan Nasional: Nice Share Rally but More to Go

Indonesia

PT Bank BTPN Syariah provides financial and banking services. The Bank offers funding and lending, deposits, e-banking, trade finance, insurance, and investment services. Bank Tabungan Pensiunan Nasional Syariah serves customers throughout Indonesia.

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Bank BTPN Syariah (BTPS IJ)

Indonesia Banks - Exceptional ROA Still Unrecognized at PT BFI Finance

PT BFI Finance Indonesia (BFIN IJ) has the second highest ROA of all 107 banks and finance companies in our Indonesia database, at 8.2% as at 2017....

Daniel Tabbush

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Indonesia Banks - Exceptional ROA Still Unrecognized at PT BFI Finance

PT BFI Finance Indonesia (BFIN IJ) has the second highest ROA of all 107 banks and finance companies in our Indonesia database, at 8.2% as at 2017....

Daniel Tabbush

Bank Tabungan Pensiunan Nasional: Nice Share Rally but More to Go

Excellent opex control reinforces our view on high quality management of Bank Tabungan Pensiunan Nasional (BTPN IJ). BTPN has again reinvented...

Johannes Salim, CFA