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)

<p>While economic recovery data may be clearest, we look to US banks’ C19 loan modifications. Most banks globally term these loans as deferral loans, and they are a new feature of banks’ balance sheets from the government actions taken early in this year. Modified loans or reschedule loans have narrowed dramatically in the most recent quarter, suggesting that the degree of stress is not worsening, and quite the contrary.</p>

While economic recovery data may be clearest, we look to US banks’ C19 loan modifications. Most banks globally term these loans as deferral loans, and they are a new feature of banks’ balance sheets from the government actions taken early in this year. Modified loans or reschedule loans have narrowed dramatically in the most recent quarter, suggesting that the degree of stress is not worsening, and quite the contrary.

Silver Point

Thomas J. Monaco

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

<p><strong><em>*We Anxiously Await HSBC’s US Departure: </em></strong>According the Financial Times on November 28, 2020, HSBC is considering offloading its entire US retail network - although a full exit from other businesses in the US is unlikely. The recommendation of a US exit is expected to be presented to the board as early as this week, although the Group is scheduled to provide an update on its plans for its French and US businesses in February 2021; </p><p><em><strong>*HSBCNA Should Be Sold: </strong></em>HSBCNA is a chronic mess, and there is absolutely no need for HSBC to maintain a full commercial/retail banking presence in the US. It cannot earn a positive return under its current structure; credit is again about to fall off a cliff; does not earning; NIMs are among the lowest in the USA; and capital is shortly about to fall below regulatory guidance. Further, the bad acquisitions and regulatory headaches should spur management to cut and run in the US. Knowing HSBC management as we do, they will continue making the same mistakes over and over again; and    </p><p><em><strong>*Hong Kong Tax Rate Continues To Mask Management’s Global Mistakes: </strong></em>When your core subsidiary in Hong Kong has a statutory corporate tax rate of 16.5% and the organization is not subject to global taxation, low taxes can mask the many mistakes that HSBC makes. </p>

*We Anxiously Await HSBC’s US Departure: According the Financial Times on November 28, 2020, HSBC is considering offloading its entire US retail network - although a full exit from other businesses in the US is unlikely. The recommendation of a US exit is expected to be presented to the board as early as this week, although the Group is scheduled to provide an update on its plans for its French and US businesses in February 2021; *HSBCNA Should Be Sold: HSBCNA is a chronic mess, and there is absolutely no need for HSBC to maintain a full commercial/retail banking presence in the US. It cannot earn a positive return under its current structure; credit is again about to fall off a cliff; does not earning; NIMs are among the lowest in the USA; and capital is shortly about to fall below regulatory guidance. Further, the bad acquisitions and regulatory headaches should spur management to cut and run in the US. Knowing HSBC management as we do, they will continue making the same mistakes over and over again; and    *Hong Kong Tax Rate Continues To Mask Management’s Global Mistakes: When your core subsidiary in Hong Kong has a statutory corporate tax rate of 16.5% and the organization is not subject to global taxation, low taxes can mask the many mistakes that HSBC makes. 

HSBC Holdings Plc – Act Now, You’ll Never See These Prices Again

<p>The concern now is that the sizeable credit cost delta seen in the latest quarter and for some in the second quarter, now wanes.  This is entirely due to the risk of increased of economic shutdown around the world and for some, a reversion to remaining closed to tourism and relatively normal living. We are seeing this is large countries in Europe now. Bank analysis is wholly different in the current environment, and at the whim of fearful governments – the antithesis of the private sector. We believe there are three considerations now that drive bank profit: 1) vaccine, 2) rationality and 3) excessive fear.</p>

The concern now is that the sizeable credit cost delta seen in the latest quarter and for some in the second quarter, now wanes.  This is entirely due to the risk of increased of economic shutdown around the world and for some, a reversion to remaining closed to tourism and relatively normal living. We are seeing this is large countries in Europe now. Bank analysis is wholly different in the current environment, and at the whim of fearful governments – the antithesis of the private sector. We believe there are three considerations now that drive bank profit: 1) vaccine, 2) rationality and 3) excessive fear.

Global Banks – Waning Credit Cost Delta

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Cross Asset Strategy

<div class="content-highlight"><p><strong><em>“Any public company that receives a bailout or significant funding should not be allowed, by law, to do stock buybacks EVER AGAIN as part of their agreement.”</em> (Source: <a href="https://www.dallasnews.com/business/airlines/2020/03/18/american-airlines-spent-12-billion-on-stock-buybacks-during-flush-times-now-it-says-it-needs-a-bailout/" target="_blank" rel="noopener">Mark Cuban</a>, 18 March 2020)</strong></p></div><p>Why are so many major U.S. companies suspending their share buyback programs right now when many of these stocks appear to be trading at bargain sales prices? This is certainly one of the major differences between the current environment versus back in 2008/2009 when numerous major U.S. companies used the emergency government proceeds to buy back their shares.</p><p>In this analysis, we discuss the significant implication of this CHANGE in SENTIMENT among major U.S. companies to suspend their share buyback programs in the midst of the global COVID-19 pandemic outbreak. We have provided a list of 25 major companies in the U.S. that have announced share buyback program cancellations in the past week (15 to 21 March). Of these 25 companies, 17 of them are in the <strong>financial sector.</strong></p>

“Any public company that receives a bailout or significant funding should not be allowed, by law, to do stock buybacks EVER AGAIN as part of their agreement.” (Source: Mark Cuban, 18 March 2020)Why are so many major U.S. companies suspending their share buyback programs right now when many of these stocks appear to be trading at bargain sales prices? This is certainly one of the major differences between the current environment versus back in 2008/2009 when numerous major U.S. companies used the emergency government proceeds to buy back their shares.In this analysis, we discuss the significant implication of this CHANGE in SENTIMENT among major U.S. companies to suspend their share buyback programs in the midst of the global COVID-19 pandemic outbreak. We have provided a list of 25 major companies in the U.S. that have announced share buyback program cancellations in the past week (15 to 21 March). Of these 25 companies, 17 of them are in the financial sector.

Why Are Major U.S. Companies Suspending Their Share Buyback Programs?

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

SBI Cards & Payment Services / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/sbi-cards-payment" target="_blank" data-smartkarma-citation="entities:28662:1" rel="noopener">SBI Cards (SBICARDS IN)</a> is the second-largest credit card issuer in India, with an 18.0% market share of the Indian credit card market as measured by the number of credit cards outstanding as of 30 September 2019. SBI Cards will commence trading on Monday, 16 March. SBI Cards set its IPO price at Rs755 per share, which is the upper limit of the IPO price band.</p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/sbi-cards-and-payment-ipo-price-range-s-polarized-appeal" target="_blank" rel="noopener">our valuation note</a>, we stated that the signs point to a good post-IPO performance, and we are inclined to put on our "growth" hat and participate in the IPO. However, since then, the markets globally are in turmoil due to the covid-19 outbreak. While trying to predict market moves in the current environment is challenging, we think that SBI Cards will have a tepid debut (likely flat). On a longer-term basis, we think the valuation remains appealing to growth-oriented investors willing to look past the market turmoil.</p></div></div></div>

SBI Cards (SBICARDS IN) is the second-largest credit card issuer in India, with an 18.0% market share of the Indian credit card market as measured by the number of credit cards outstanding as of 30 September 2019. SBI Cards will commence trading on Monday, 16 March. SBI Cards set its IPO price at Rs755 per share, which is the upper limit of the IPO price band.In our valuation note, we stated that the signs point to a good post-IPO performance, and we are inclined to put on our "growth" hat and participate in the IPO. However, since then, the markets globally are in turmoil due to the covid-19 outbreak. While trying to predict market moves in the current environment is challenging, we think that SBI Cards will have a tepid debut (likely flat). On a longer-term basis, we think the valuation remains appealing to growth-oriented investors willing to look past the market turmoil.

SBI Cards and Payment IPO: Trading Debut In Unprecedented Times

United States

Capital One Financial Corporation is a diversified bank. The Bank, through its subsidiaries, offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients both domestically and internationally.  Capital One has bank locations in Connecticut, Louisiana, New Jersey, New York, and Texas.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Capital One Financial (COF US)

US Banks – Deferral Debt Dwindling

We look to US banks’ C19 loan modifications. Modified loans or reschedule loans have narrowed dramatically, suggesting that the degree of stress is...

Daniel Tabbush

HSBC Holdings Plc – Act Now, You’ll Never See These Prices Again

HSBC HOLDINGS PLC: Financial Times Suggesting Board Will Be Presented With Options On US Franchise This Week. This Was A Long Time In Coming.

Thomas J. Monaco

Global Banks – Waning Credit Cost Delta

Bank analysis is wholly different in the current environment. We believe there are three considerations now that drive bank profit: 1) vaccine, 2)...

Daniel Tabbush

SBI Cards and Payment IPO: Trading Debut In Unprecedented Times

SBI Cards (SBICARDS IN) is the second-largest credit card issuer in India, with an 18.0% market share of the Indian credit card market as measured...

Arun George

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

US Banks – Deferral Debt Dwindling

We look to US banks’ C19 loan modifications. Modified loans or reschedule loans have narrowed dramatically, suggesting that the degree of stress is...

Daniel Tabbush

HSBC Holdings Plc – Act Now, You’ll Never See These Prices Again

HSBC HOLDINGS PLC: Financial Times Suggesting Board Will Be Presented With Options On US Franchise This Week. This Was A Long Time In Coming.

Thomas J. Monaco

Global Banks – Waning Credit Cost Delta

Bank analysis is wholly different in the current environment. We believe there are three considerations now that drive bank profit: 1) vaccine, 2)...

Daniel Tabbush

Why Are Major U.S. Companies Suspending Their Share Buyback Programs?

“Any public company that receives a bailout or significant funding should not be allowed, by law, to do stock buybacks EVER AGAIN as part of their...

Douglas Kim

SBI Cards and Payment IPO: Trading Debut In Unprecedented Times

SBI Cards (SBICARDS IN) is the second-largest credit card issuer in India, with an 18.0% market share of the Indian credit card market as measured...

Arun George