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>US banks show continued strength and the overall economy, from the weekly balance sheet data and the CP market</li>
<li>Total loans continue to accelerate in most recent week to 5.4% and loan loss reserves show almost no growth, for many weeks</li>
<li>CP growth rate is less, but it remains high at 26% and this is a good sign of industrial demand for working capital</li>
</ul>


US banks show continued strength and the overall economy, from the weekly balance sheet data and the CP market
Total loans continue to accelerate in most recent week to 5.4% and loan loss reserves show almost no growth, for many weeks
CP growth rate is less, but it remains high at 26% and this is a good sign of industrial demand for working capital


US Banks - Further Accelerating Loans 5.4% YoY, Benign 0.56% LLR YoY, Credit Conditions Very Good

<ul>
<li>There is good HFD out from the Fed on weekly balance sheets and commercial paper outstanding, suggesting continued underlying strength</li>
<li>CP outstanding for non-financials is rising at rate of 19% YoY in most recent week, which is relatively strong growth for short duration working capital</li>
<li>Weekly loan growth data is 5.09% YoY for week of 5 November, one of highest growth rates in recent weeks, with LDR expansion accelerating</li>
</ul>


There is good HFD out from the Fed on weekly balance sheets and commercial paper outstanding, suggesting continued underlying strength
CP outstanding for non-financials is rising at rate of 19% YoY in most recent week, which is relatively strong growth for short duration working capital
Weekly loan growth data is 5.09% YoY for week of 5 November, one of highest growth rates in recent weeks, with LDR expansion accelerating


US Banks - CP at +19% YoY, LDR Expansion Accelerates, Weekly Loans +5% YoY

<ul>
<li>The comment by <a href="https://www.smartkarma.com/entities/jpmorgan-chase-co" target="_blank" data-smartkarma-citation="entities:277:1" rel="noopener">JPMorgan Chase &amp; Co (JPM US)</a> about its two bad loans suggesting there will be more, something like 'cockroaches' coming out from nowhere. </li>
<li>The weekly data from H8 filings at the Fed have been showing lower LLR for many weeks, suggesting a better credit environment not worsening - whatever the animal.</li>
<li>The reality is that most banks that have announced in the US are showing lower credit costs, lower NPLs or benign growth in bad loans. </li>
</ul>


The comment by JPMorgan Chase &amp; Co (JPM US) about its two bad loans suggesting there will be more, something like 'cockroaches' coming out from nowhere. 
The weekly data from H8 filings at the Fed have been showing lower LLR for many weeks, suggesting a better credit environment not worsening - whatever the animal.
The reality is that most banks that have announced in the US are showing lower credit costs, lower NPLs or benign growth in bad loans. 


US Banks - Cockroaches? Weekly LLR Only 0.32% YoY. Comment Appears to Be In Contrast to Data

<ul>
<li>Overnight CP market in the US reflects the Fed rate cut immediately. Rates on overnight non-financial CP for A2/P2 companies now 4.20% (18 Sept) from 4.45% (17 Sept)</li>
<li>Weekly B/S for US banks has been showing for some time accelerating loan volume, with debt 5-7% less expensive overnight, loan volume should continue to accelerate</li>
<li>Where loans at US banks are only 67% of deposits, a 25bps reduction on both pools (loans, deposits) can be NIM expansionary. There are many moving parts, though. </li>
</ul>


Overnight CP market in the US reflects the Fed rate cut immediately. Rates on overnight non-financial CP for A2/P2 companies now 4.20% (18 Sept) from 4.45% (17 Sept)
Weekly B/S for US banks has been showing for some time accelerating loan volume, with debt 5-7% less expensive overnight, loan volume should continue to accelerate
Where loans at US banks are only 67% of deposits, a 25bps reduction on both pools (loans, deposits) can be NIM expansionary. There are many moving parts, though. 


US Banks - Lower Rates: Higher Loan Volume, Low LDR Can Mean +NIM

<ul>
<li>US banks report weekly balance sheets, and the data is an good gauge for what we can expect during 1Q25 for profit, and especially core income, at least directionally. </li>
<li>The most recent loan growth data is now even stronger than before, and this is what matters: the weekly data is accelerating. </li>
<li>The pace of weekly YoY growth now is 2.7% during 1Q25 while this was 2.0% during 1Q24, the second derivative is also improving vastly, now up 33% YoY</li>
</ul>


US banks report weekly balance sheets, and the data is an good gauge for what we can expect during 1Q25 for profit, and especially core income, at least directionally. 
The most recent loan growth data is now even stronger than before, and this is what matters: the weekly data is accelerating. 
The pace of weekly YoY growth now is 2.7% during 1Q25 while this was 2.0% during 1Q24, the second derivative is also improving vastly, now up 33% YoY


US Banks - Average YoY Loan Growth During 1Q25 Weeks Is 33% Higher than During Weeks in 1Q24

United States

Home BancShares Inc. is a bank holding company whose subsidiaries provide a range of commercial and retail banking services to businesses, real estate developers and investors, individuals and municipalities.  The Banks serve central Arkansas, and the Florida Keys and southwestern Florida.

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Home Bancshares (HOMB US)

US Banks - Further Accelerating Loans 5.4% YoY, Benign 0.56% LLR YoY, Credit Conditions Very Good

US banks show continued strength in weekly balance sheets, accelerating loan growth at 5.43% YoY with only 0.56% YoY growth in loan loss reserves....

Daniel Tabbush

US Banks - CP at +19% YoY, LDR Expansion Accelerates, Weekly Loans +5% YoY

High frequency data from Fed on commercial paper and balance sheets is positive. Loans are accelerating to 5% YoY and CP is at 19% YoY, with LDR...

Daniel Tabbush

US Banks - Cockroaches? Weekly LLR Only 0.32% YoY. Comment Appears to Be In Contrast to Data

Comment from JPM seems to be in contrast to US bank data, where there are no major or systemic signs of credit deterioration, rather it is the...

Daniel Tabbush

US Banks - Lower Rates: Higher Loan Volume, Low LDR Can Mean +NIM

Volume of loans and commercial paper was already strong, now that debt is cheaper, this can accelerate. O/N CP rates already show rate cut. Low LDR...

Daniel Tabbush

US Banks - Average YoY Loan Growth During 1Q25 Weeks Is 33% Higher than During Weeks in 1Q24

US banks are seeing stronger loan growth in new weekly data, and growth rate now is far higher than what they saw during 1Q24 weeks. Lowering cash,...

Daniel Tabbush

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