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

Mega Financial Holding Co., Ltd / Equity Bottom-Up

Across nearly 300 banks in Asia-Pacific the average NPL ratio is 2.47%. In Taiwan banks have essentially no NPLs at just 0.27% of loans.We find it hard to imagine that this will remain the case, especially given their lending to Taiwanese companies doing business in China.The provision and earnings delta for these banks may be some of the most dramatic in Asia, given they are starting from a seemingly pristine loan book.

Across nearly 300 banks in Asia-Pacific the average NPL ratio is 2.47%. In Taiwan banks have essentially no NPLs at just 0.27% of loans.We find it hard to imagine that this will remain the case, especially given their lending to Taiwanese companies doing business in China.The provision and earnings delta for these banks may be some of the most dramatic in Asia, given they are starting from a seemingly pristine loan book.

<ul><li>We should not forget about the latent, but hidden risk facing banks off balance sheet.</li><li>In a crisis, when banks become risk averse, and where companies find economic circumstances changing radically, there is more risk that these so-called off balance sheet items move on-balance sheet. Unwittingly.</li><li>This can result in a spur of unwanted loan growth for banks, and it also something to watch for. High loan growth at a time of risk aversion can simply be the off balance sheet moving on balance sheet. This is generally poor quality growth.</li><li>Some banks traditionally touted as safe havens have surprisingly high Off Balance Sheet Liabilities to Equity.&nbsp;It is impossible to say if these banks will face difficulties with customers drawing down on these off balance sheet facilities or not, but holding all else equal, these banks are far more exposed vs. capital than others in Asia.</li></ul>More below the fold....&nbsp;

We should not forget about the latent, but hidden risk facing banks off balance sheet.In a crisis, when banks become risk averse, and where companies find economic circumstances changing radically, there is more risk that these so-called off balance sheet items move on-balance sheet. Unwittingly.This can result in a spur of unwanted loan growth for banks, and it also something to watch for. High loan growth at a time of risk aversion can simply be the off balance sheet moving on balance sheet. This is generally poor quality growth.Some banks traditionally touted as safe havens have surprisingly high Off Balance Sheet Liabilities to Equity.&nbsp;It is impossible to say if these banks will face difficulties with customers drawing down on these off balance sheet facilities or not, but holding all else equal, these banks are far more exposed vs. capital than others in Asia.More below the fold....&nbsp;

Taiwan

E.Sun Financial Holding Company Ltd. is a holding company.  Through its subsidiaries, the Company provides banking, brokerage and dealer services.

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E.Sun Financial Holding Co (2884 TT)

Taiwan's Banks Have Zero NPLs; For Now

Across nearly 300 banks in Asia-Pacific the average NPL ratio is 2.47%. In Taiwan banks have essentially no NPLs at just 0.27% of loans.We find it...

Daniel Tabbush

Beware of Banks' Off Balance Sheet Risk

We should not forget about the latent, but hidden risk facing banks off balance sheet. In a crisis, when banks become risk averse, and where...

Daniel Tabbush

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