Asian bank research and consultancy, Tabbush Report

Daniel Tabbush

Asian bank 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>Funding squeeze evident in HK's HIBOR market and reported in Australia too</li>
<li>Even where not visible, this must be expected globally, as banks reign in risk</li>
<li>MQG has low levels of deposits and high levels of securities</li>
</ul>


Funding squeeze evident in HK's HIBOR market and reported in Australia too
Even where not visible, this must be expected globally, as banks reign in risk
MQG has low levels of deposits and high levels of securities


Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Thematic (Sector/Industry)

<ul>
<li>The UBS acquisition of Credit Suisse includes the write-off of CHF15.8bn (USD17bn) of Additional Tier 1 (AT1) bonds, despite there being residual equity value for CS shareholders in the deal</li>
<li>AT1s are the most junior, loss absorbing of bonds; precedent exists for the zeroing of AT1s in Spain’s Banco Popular 2017 failure, but importantly this also included shareholders being zeroed</li>
<li>The Credit Suisse AT1 write-off is by far the biggest so far and this unconventional treatment of shareholders versus junior bondholders should lead European banks’ cost of equity to rise</li>
</ul>


The UBS acquisition of Credit Suisse includes the write-off of CHF15.8bn (USD17bn) of Additional Tier 1 (AT1) bonds, despite there being residual equity value for CS shareholders in the deal
AT1s are the most junior, loss absorbing of bonds; precedent exists for the zeroing of AT1s in Spain’s Banco Popular 2017 failure, but importantly this also included shareholders being zeroed
The Credit Suisse AT1 write-off is by far the biggest so far and this unconventional treatment of shareholders versus junior bondholders should lead European banks’ cost of equity to rise


Financials Credit Analyst

Hank Calenti, CFA

CreditContinuum

Credit

Executive Summary: <a href="https://www.smartkarma.com/entities/ubs-group-ag" target="_blank" data-smartkarma-citation="entities:22590:1" rel="noopener">UBS Group's (UBSG VX)</a> Archegos surprise provides three lessons for credit investors. The net result is that it is time to lighten exposure to this financial institution.First, the firm is much more than a simple asset manager, it is a material off-balance sheet leverage provider to wealth management clients. Second, this risk, although not incorporated in risk management disclosures, is the reason why UBS’ capital constraint is leverage ratio driven. Third, broader financial market risk exposure may be the biggest risk for credit investors at current trading levels. We elaborate more on each within.UBS’ Additional Tier 1 bonds trade at a material premium to other firms. Considering that UBS is exposed by more than the market expected to idiosyncratic events impacting other banks, juxtaposed with a low capital buffer relative to firms with much less market exposure, and given that financial market conditions are about as good as it can get for investment banking and asset managers, now is the time to lighten exposure to firms like UBS.In light of today’s announcement and the path forward from a financial market perspective, we recommend that investors Underweight exposure to UBS.

Executive Summary: UBS Group's (UBSG VX) Archegos surprise provides three lessons for credit investors. The net result is that it is time to lighten exposure to this financial institution.First, the firm is much more than a simple asset manager, it is a material off-balance sheet leverage provider to wealth management clients. Second, this risk, although not incorporated in risk management disclosures, is the reason why UBS’ capital constraint is leverage ratio driven. Third, broader financial market risk exposure may be the biggest risk for credit investors at current trading levels. We elaborate more on each within.UBS’ Additional Tier 1 bonds trade at a material premium to other firms. Considering that UBS is exposed by more than the market expected to idiosyncratic events impacting other banks, juxtaposed with a low capital buffer relative to firms with much less market exposure, and given that financial market conditions are about as good as it can get for investment banking and asset managers, now is the time to lighten exposure to firms like UBS.In light of today’s announcement and the path forward from a financial market perspective, we recommend that investors Underweight exposure to UBS.

UBS: Archegos Surprise; Underweight on Three Lessons Learned

Podcast by CEO, Norges Bank Investment Management, In Good Company with Nicolai Tangen

In Good Company with Nicolai Tangen

Podcast by CEO, Norges Bank Investment Management

The CEO of the largest single investor in the world, Norges Bank Investment Management, interviews leaders of some of the largest companies in the world. You will get to know the leader, their strategy, leadership principles, and much more. Hosted on Acast. See https://www.acast.com/privacy-policy for more information.

<ul><li>Former professional football player turned banker/trader</li><li>Helped build up Swiss franc capital market operation for Merrill Lynch</li><li>Witnessed UBS acquisition of Credit Suisse in 2023, highlighting lack of sustainable business model for Credit Suisse</li></ul>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Former professional football player turned banker/traderHelped build up Swiss franc capital market operation for Merrill LynchWitnessed UBS acquisition of Credit Suisse in 2023, highlighting lack of sustainable business model for Credit SuisseThis content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

UBS CEO: Surprise Comeback, Credit Suisse, and Winning

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

Cross Asset Strategy

<ul><li>Trust / In Depth: China intensifies efforts to curb risk in troubled trust sector</li><li>Personnel /China’s ousted foreign minister removed from top legislature</li><li>Ant Group /Ant Group outbids Citadel Securities for Credit Suisse’s China JV</li></ul>

Trust / In Depth: China intensifies efforts to curb risk in troubled trust sectorPersonnel /China’s ousted foreign minister removed from top legislatureAnt Group /Ant Group outbids Citadel Securities for Credit Suisse’s China JV

CX Daily: China Intensifies Efforts to Curb Risk in Troubled Trust Sector 

Switzerland

Credit Suisse Group AG operates as a wealth management firm. The Company specializes in investment banking and offers wealth management activities aiming to capitalize on both the large pool of wealth within mature markets, as well as the significant growth in wealth in Asia Pacific and other emerging markets. Credit Suisse Group serves customers worldwide.

Credit Suisse Group (CSGN SW)

MQG - Funding Squeeze?

Funding squeeze is evident in Hong Kong, and reports suggest the same in Australia, with other markets likely. Banks which rely more on non-deposit...

Daniel Tabbush

AT1 Bonds; Life After Credit Suisse

The CS AT1 write-off due to UBS's acquisition is an unconventional action on bondholders versus shareholders, implying a rising banks' cost of...

Victor Galliano

UBS: Archegos Surprise; Underweight on Three Lessons Learned

The Archegos surprise provides three lessons for credit investors. The net result is that it is time to lighten exposure to UBS.

Hank Calenti, CFA

UBS CEO: Surprise Comeback, Credit Suisse, and Winning

Started career in banking after realizing he wouldn't make it as a football playerHired by Citibank as a trader for convertible bonds and options

In Good Company with Nicolai Tangen

CX Daily: China Intensifies Efforts to Curb Risk in Troubled Trust Sector

Trust / In Depth: China intensifies efforts to curb risk in troubled trust sector Profitability is out and risk management is in. That’s the...

Caixin Global