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>
<a href="https://www.smartkarma.com/entities/bank-ozk" target="_blank" data-smartkarma-citation="entities:28708:1" rel="noopener">Bank OZK (OZK US)</a> has more CRE loans to total loans of any US bank at 72% in 3Q24</li>
<li>Risks of CRE loans are real now and historically, they have high loss rates, in bad times</li>
<li>The bank is seeing a surge in NPAs , but its credit costs are lagging - make up in 4Q24?</li>
</ul>



Bank OZK (OZK US) has more CRE loans to total loans of any US bank at 72% in 3Q24
Risks of CRE loans are real now and historically, they have high loss rates, in bad times
The bank is seeing a surge in NPAs , but its credit costs are lagging - make up in 4Q24?


Bank OZK - Most CRE Loans/Total Loans of Any US Bank & Dramatically Worsening Credit Metrics

Thematic (Sector/Industry)

<p>The story for <strong>US banks</strong> is all about re-opening the economy, improved credit costs and top line. New macro data for August suggests that the economy continues to improve. With the Fed’s new higher inflation target, one must expect lower rates for longer, which can mean reasonably higher loan demand. If and where the yield curve maintains steepness or steepens further, banks should be able to rebuild net interest income with limited credit risk. Alongside continued improvement in the virus, the Centers for Disease Control and Prevention (CDC) now suggests that testing should not be done by all and it gives new data that suggests the risks of getting sick and dying are far less dire than most expected, or were told, in March and April. These last two points are positive, as they can have an impact on keeping the economy open and support improved confidence in spending, investment.</p>

The story for US banks is all about re-opening the economy, improved credit costs and top line. New macro data for August suggests that the economy continues to improve. With the Fed’s new higher inflation target, one must expect lower rates for longer, which can mean reasonably higher loan demand. If and where the yield curve maintains steepness or steepens further, banks should be able to rebuild net interest income with limited credit risk. Alongside continued improvement in the virus, the Centers for Disease Control and Prevention (CDC) now suggests that testing should not be done by all and it gives new data that suggests the risks of getting sick and dying are far less dire than most expected, or were told, in March and April. These last two points are positive, as they can have an impact on keeping the economy open and support improved confidence in spending, investment.

United States

Flagstar Bancorp, Inc. is the holding company for Flagstar Bank, FSB.  The Bank attracts deposits from the general public and originates or acquires residential mortgage loans.  Flagstar also originates consumer, commercial real estate, and non-real estate commercial loans and it operates predominantly in Michigan and Indiana, as well as throughout the United States.

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Flagstar Bancorp (FBC US)

Bank OZK - Most CRE Loans/Total Loans of Any US Bank & Dramatically Worsening Credit Metrics

Commercial real estate (CRE) loans are risky in the US normally and especially now. Bank OZK is most exposed, with dramatic worsening of credit...

Daniel Tabbush

US Banks – New Data Supportive

New data in US shows a continued improvement in the economy and new data from the CDC should be well received by law-makers, consumers and the...

Daniel Tabbush

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