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>We have written previously on why <a href="http://www.smartkarma.com/insights/324ae38b-37f4-4a65-940b-038231905ff2" target="_blank" data-smartkarma-citation="insights:1743">The World of Banking is Becoming Ever More Polarized</a>,</li><li>In our next report, <a href="http://www.smartkarma.com/insights/tlac-regulations-will-destroy-banks-as-much-as-it-saves-them" target="_blank" data-smartkarma-citation="insights:1776">TLAC Regulations Will Destroy Banks as Much as it Saves Them</a>, we focussed in on the negative side of the barbell, the banks that are set to struggle.</li><li>In this report we balance the scale, and discuss the positive end of the barbell. Those banks which are continuing to flourish, and are well placed to take advantage of the weakness of their competitors.</li><li>What is interesting in the world of increased banking regulation, and less leverage in particular, is how well most banks in South East Asia fare. But also, how some banks compare very well vs. others in the region.</li></ul>

We have written previously on why The World of Banking is Becoming Ever More Polarized,In our next report, TLAC Regulations Will Destroy Banks as Much as it Saves Them, we focussed in on the negative side of the barbell, the banks that are set to struggle.In this report we balance the scale, and discuss the positive end of the barbell. Those banks which are continuing to flourish, and are well placed to take advantage of the weakness of their competitors.What is interesting in the world of increased banking regulation, and less leverage in particular, is how well most banks in South East Asia fare. But also, how some banks compare very well vs. others in the region.

45 Banks in SE Asia Can Grow for 10 Years Without Need for Capital

<ul><li>The capital requirements for banks will be suicide to returns.</li><li>The Financial Stability Board (FSB) will destroy banks with their regulations, in order that they may be saved in a crisis.</li><li>It&rsquo;s ironic if not absurd.</li><li>This does not mean to say, that we believe banks should be highly leveraged, or engage in complicated, risky, murky businesses.</li><li>But it feels a bit like Basel got it immensely wrong, and is going over-board on its amends.</li></ul>

The capital requirements for banks will be suicide to returns.The Financial Stability Board (FSB) will destroy banks with their regulations, in order that they may be saved in a crisis.It&rsquo;s ironic if not absurd.This does not mean to say, that we believe banks should be highly leveraged, or engage in complicated, risky, murky businesses.But it feels a bit like Basel got it immensely wrong, and is going over-board on its amends.

TLAC Regulations Will Destroy Banks as Much as it Saves Them

<ul><li>The polarization of the world&rsquo;s banks is gaining momentum.</li><li>The lumbering, large, globally systemically important banks are increasingly forced to shore up capital, limit their leverage, and limit potentially high return businesses.</li><li>Smaller, more domestic banks in Asia, and South East Asia in particular, are at the other end of this polarization.</li></ul>

The polarization of the world&rsquo;s banks is gaining momentum.The lumbering, large, globally systemically important banks are increasingly forced to shore up capital, limit their leverage, and limit potentially high return businesses.Smaller, more domestic banks in Asia, and South East Asia in particular, are at the other end of this polarization.

The World of Banking is Becoming Ever More Polarized

Global Asset Allocation, Politics & Governance, Ecstrat

John-Paul Smith

Global Asset Allocation, Politics & Governance

Ecstrat

Ecstrat is a consultancy advising on asset allocation between global equity markets, with a focus on the intersection of governments, geopolitics, governance and markets.
 
Over the past few years and more especially since the Great Financial Crisis (GFC), investors have become more focused on short-term market movements and real-time returns and have consequently neglected the analysis of the underlying structural themes that underpin longer term performance.
​
More specifically we believe that the evolution of governance-based relationships between investors, controlling shareholders, labour and the state is one of the primary determinants of both relative and absolute performance between individual equity markets.
 
We will endeavour to provide investors with some of the context surrounding governance-related issues which encompass many different disciplines including history, economics and political science, as well as the financial metrics which are the most obvious manifestation of the structural characteristics of each market.
 
We will pay particular attention to the shifts and potential inflection points for governance in individual markets as these are often the best lead indicators for both economic and market performance.

Cross Asset Strategy

Mark and JP once again highlight the fault lines that run through what they consider to be the most vulnerable part of the listed Chinese corporate sector, namely the industrial and materials companies which are the most symptomatic of the broader economy.Whilst there are a number of indications that the rate of economic growth may pick up a little over the short term (property sales, land sales, consumption incentives, fiscal policy), these sectors are indicative of a deep malaise at the heart of the economy.We are especially concerned about the blow out in working capital and the ongoing deterioration in the efficacy of credit growth.&nbsp;

Mark and JP once again highlight the fault lines that run through what they consider to be the most vulnerable part of the listed Chinese corporate sector, namely the industrial and materials companies which are the most symptomatic of the broader economy.Whilst there are a number of indications that the rate of economic growth may pick up a little over the short term (property sales, land sales, consumption incentives, fiscal policy), these sectors are indicative of a deep malaise at the heart of the economy.We are especially concerned about the blow out in working capital and the ongoing deterioration in the efficacy of credit growth.&nbsp;

China: Short-term stabilization possible but underlying fault lines remain

<ul><li>Last year seven banks in China saw deposits contract. The year previous the number was one. </li><li>Deposit flight is one of the first things to look for in a banking crisis.&nbsp;</li><li>Even where deposits are simply being moved out of traditional banks and placed with a government policy bank, it can be a concern.</li><li>As bad loans worsen, banks find it increasingly difficult to pay back depositors, which can mean calling in loans. This only exacerbates financial stress for debtors.</li></ul>Full report below the fold....&nbsp;

Last year seven banks in China saw deposits contract. The year previous the number was one. Deposit flight is one of the first things to look for in a banking crisis.&nbsp;Even where deposits are simply being moved out of traditional banks and placed with a government policy bank, it can be a concern.As bad loans worsen, banks find it increasingly difficult to pay back depositors, which can mean calling in loans. This only exacerbates financial stress for debtors.Full report below the fold....&nbsp;

China

China Pacific Insurance (Group) Company, Ltd. is an integrated insurance services provider. The Company offers life and property insurance products through its subsidiaries.

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China Pacific Insurance (2601 HK)

45 Banks in SE Asia Can Grow for 10 Years Without Need for Capital

We have written previously on why The World of Banking is Becoming Ever More Polarized, In our next report, TLAC Regulations Will Destroy Banks as...

Daniel Tabbush

TLAC Regulations Will Destroy Banks as Much as it Saves Them

The capital requirements for banks will be suicide to returns. The Financial Stability Board (FSB) will destroy banks with their regulations, in...

Daniel Tabbush

The World of Banking is Becoming Ever More Polarized

The polarization of the world’s banks is gaining momentum. The lumbering, large, globally systemically important banks are increasingly forced to...

Daniel Tabbush

China: Short-term stabilization possible but underlying fault lines remain

Mark and JP once again highlight the fault lines that run through what they consider to be the most vulnerable part of the listed Chinese corporate...

John-Paul Smith

Deposit Flight at China's Banks

Last year seven banks in China saw deposits contract. The year previous the number was one. Deposit flight is one of the first things to look...

Daniel Tabbush

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