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>Remitly (RELY) offers remittances services with 5m active customers, in over 170 countries, with 4 billion bank accounts, and 4,800 corridors, mostly to persons in US, Canada.  </li>
<li>Revenue growth is strong at 49% YoY in 2Q23 and averaging 43% YoY for the preceding 5 quarters, with active customers up 474,000 in 2Q23 QoQ vs 371,000 in 1Q23</li>
<li>Costs remain high, GAAP earnings are in loss, but this is due to stock-based compensation; adjusted EBITDA is now USD20.4m in 2Q23 from an adjusted EBITDA loss YoY</li>
</ul>


Remitly (RELY) offers remittances services with 5m active customers, in over 170 countries, with 4 billion bank accounts, and 4,800 corridors, mostly to persons in US, Canada.  
Revenue growth is strong at 49% YoY in 2Q23 and averaging 43% YoY for the preceding 5 quarters, with active customers up 474,000 in 2Q23 QoQ vs 371,000 in 1Q23
Costs remain high, GAAP earnings are in loss, but this is due to stock-based compensation; adjusted EBITDA is now USD20.4m in 2Q23 from an adjusted EBITDA loss YoY


Remitly - Rev +49% | ROW Rev +120% | Scaling: COGS -25% | Adj EBITDA Margin 2Q23 Is 8.7%, Highest

It is abundantly clear that credit costs were too high during early last years, but more so for some than others. The first step is reversals for those banks. The next step is a concurrent improvement in core income and Texas banks may lead many in the US.

It is abundantly clear that credit costs were too high during early last years, but more so for some than others. The first step is reversals for those banks. The next step is a concurrent improvement in core income and Texas banks may lead many in the US.

Texas Banks – Record Reversals, Just The Beginning?

We have all seen how credit costs have come down for US banks. While the theme is relevant globally, the delta can vary dramatically. A closer look at banks with exposure to oil may give insights to how DBS will model its provisions during the final quarter of 2020.

We have all seen how credit costs have come down for US banks. While the theme is relevant globally, the delta can vary dramatically. A closer look at banks with exposure to oil may give insights to how DBS will model its provisions during the final quarter of 2020. 

Credit costs are down substantially at <a href="https://www.smartkarma.com/entities/wells-fargo-co" target="_blank" data-smartkarma-citation="entities:232:1" rel="noopener">Wells Fargo &amp; Co (WFC US)</a> in the latest quarter. This is understandable given its sharp rise during previous quarters and well higher than its own history. WFC had stood out here going on the quarter and we are seeing how it plays out. Long-term perspective shows even through the early 1990s that WFC may be in for a period of low provisions.

Credit costs are down substantially at Wells Fargo &amp; Co (WFC US) in the latest quarter. This is understandable given its sharp rise during previous quarters and well higher than its own history. WFC had stood out here going on the quarter and we are seeing how it plays out. Long-term perspective shows even through the early 1990s that WFC may be in for a period of low provisions.  

Wells Fargo – The Great Provision Delta

We all remember the dire days early in the year, when oil prices hit a negative number. There was incredible panic at the time when Saudi Arabia and Russia appeared to be fighting the commodity.  The economic shutdown only worsened matters and this is especially true for banks in Texas. Many took oversized credit costs reflecting conditions at the time, and extrapolating forward. Since then oil prices have more than doubled (from ~USD20 per barrel), economies have re-opened and stimulus and support has increased. Perhaps it is no wonder that the largest bank incorporated in Texas saw provision costs down 66% during 2Q20 QoQ. What matters now is what’s in store for 2H20.

We all remember the dire days early in the year, when oil prices hit a negative number. There was incredible panic at the time when Saudi Arabia and Russia appeared to be fighting the commodity.  The economic shutdown only worsened matters and this is especially true for banks in Texas. Many took oversized credit costs reflecting conditions at the time, and extrapolating forward. Since then oil prices have more than doubled (from ~USD20 per barrel), economies have re-opened and stimulus and support has increased. Perhaps it is no wonder that the largest bank incorporated in Texas saw provision costs down 66% during 2Q20 QoQ. What matters now is what’s in store for 2H20.

United States

Comerica Incorporated is the holding company for business, individual, and investment banks with operations in the United States, Canada, and Mexico.  The Company's subsidiaries provide services such as corporate banking, international finance, treasury management, community banking, private banking, small business and individual lending, investment services, and institutional trust.

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Comerica Inc (CMA US)

Remitly - Rev +49% | ROW Rev +120% | Scaling: COGS -25% | Adj EBITDA Margin 2Q23 Is 8.7%, Highest

49% revenue growth 2Q23, COGS/revenue in decline. Adj EBITDA is positive, rising sharply in 2Q23 from 1Q23, 4Q22. Scale, penetration, reach, new...

Daniel Tabbush

Texas Banks – Record Reversals, Just The Beginning?

It is clear that credit costs were too high but more so for some than others. The first step is reversals. The next step may be better core income...

Daniel Tabbush

DBS – Modeling Provisions

We have all seen how credit costs have come down for US banks. DBS can see a significant decline in credit costs, with meaningful gas and energy...

Daniel Tabbush

Wells Fargo – The Great Provision Delta

Long-term perspective shows that Wells Fargo may be in for a period of incredibly low provisions, which should be beneficial to results going forward.

Daniel Tabbush

CMA – Telling Credit Cost Profile

We all remember the dire days early in the year, when oil prices hit a negative number. There was incredible panic at the time when Saudi Arabia...

Daniel Tabbush

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