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

The rapid and extensive devaluation of the <a href="https://www.smartkarma.com/entities/22834" target="_blank" data-smartkarma-citation="entities:22834:1">TRY (USDTRY CURNCY)</a> is the first major currency devaluation since banks adopted IFRS 9. Under the new accounting regime provision expenses and loan classification can be more onerous. We believe that the magnitude of the TRY/USD depreciation constitutes ‘a significant increase in credit risk’ as outlined under what are called Stage 2 loans. The risk is that banks with exposure to Turkey see a marked increase in Expected Credit Losses (ECL) for stage 2…

The rapid and extensive devaluation of the TRY (USDTRY CURNCY) is the first major currency devaluation since banks adopted IFRS 9. Under the new accounting regime provision expenses and loan classification can be more onerous. We believe that the magnitude of the TRY/USD depreciation constitutes ‘a significant increase in credit risk’ as outlined under what are called Stage 2 loans. The risk is that banks with exposure to Turkey see a marked increase in Expected Credit Losses (ECL) for stage 2…

HSBC Holdings – TRY Devaluation Is the First Major Devaulation Under IFRS 9, Risk for HSBC Is Real

“As at 30 June 2018, the fair value of HSBC’s investment in Bank of Communications Co., Limited (‘BoCom’) had been below the carrying amount for approximately six years.” This is straight from <a href="https://www.smartkarma.com/entities/516" target="_blank" data-smartkarma-citation="entities:516:1">HSBC Holdings (5 HK)</a>'s latest disclosure. HSBC holds <a href="https://www.smartkarma.com/entities/659" target="_blank" data-smartkarma-citation="entities:659:1">Bank Of Communications Co H (3328 HK)</a> at US$17.9 billion compared with a fair value of US$10.8 billion. The difference here is shocking, at US$7.1 billion. This is yet another indication on how HSBC has long departed from its conservative roots. We…

“As at 30 June 2018, the fair value of HSBC’s investment in Bank of Communications Co., Limited (‘BoCom’) had been below the carrying amount for approximately six years.” This is straight from HSBC Holdings (5 HK)'s latest disclosure. HSBC holds Bank Of Communications Co H (3328 HK) at US$17.9 billion compared with a fair value of US$10.8 billion. The difference here is shocking, at US$7.1 billion. This is yet another indication on how HSBC has long departed from its conservative roots. We…

HSBC – $7 Billion Valuation Hole on BoCom and Other Sundry 1H18 Data

Silver Point

Thomas J. Monaco

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

* 2Q18 Results Even lower than pre-release; * Overall results appear to have been managed; and *Large capital raise likely on the near-term horizon. <h2>Investment Summary</h2>Deutsche Bank (DBK.GY/DB.US) reported underlying profit before tax of EUR 667 mn (against a pre-release of EUR 696 mn).  Although weaker than initially anticipated, this result appears to have been driven by higher than expected: compensation (staff retention), loan workout gains, lower management fees, a decrease in loan loss…

* 2Q18 Results Even lower than pre-release; * Overall results appear to have been managed; and *Large capital raise likely on the near-term horizon. Investment SummaryDeutsche Bank (DBK.GY/DB.US) reported underlying profit before tax of EUR 667 mn (against a pre-release of EUR 696 mn).  Although weaker than initially anticipated, this result appears to have been driven by higher than expected: compensation (staff retention), loan workout gains, lower management fees, a decrease in loan loss…

* Deutsche Bank (DBK.GY/DB.US) [Deutsche] provided a preliminary update with improved capital metrics versus expectations;  * Deutsche still continues to be a multi-year restructuring which is wholly dependent upon the business cycle; and * Despite all the hoopla with these results, Deutsche still has an enormous headache on its hands.  <h2>Investment Summary</h2>Deutsche Bank (DBK.GY/DB.US) [Deutsche] provided a preliminary update with improved capital metrics versus expectations. We remain concerned…

* Deutsche Bank (DBK.GY/DB.US) [Deutsche] provided a preliminary update with improved capital metrics versus expectations;  * Deutsche still continues to be a multi-year restructuring which is wholly dependent upon the business cycle; and * Despite all the hoopla with these results, Deutsche still has an enormous headache on its hands.  Investment SummaryDeutsche Bank (DBK.GY/DB.US) [Deutsche] provided a preliminary update with improved capital metrics versus expectations. We remain concerned…

With worsening data out of France, we must presume that credit metrics or at least credit growth can worsen. At the same time, credit quality can deteriorate. We believe that most analysis on <a href="https://www.smartkarma.com/entities/516" target="_blank" data-smartkarma-citation="entities:516:1">HSBC Holdings Plc (5 HK)</a> focuses on its Asian operations or its US operations, so that weakness in France can be a negative surprise. While it is not a region the bank highlights – for obvious reasons – this in of itself can lead to limitations on coverage or analysis of HSBC’s business in France. The…

With worsening data out of France, we must presume that credit metrics or at least credit growth can worsen. At the same time, credit quality can deteriorate. We believe that most analysis on HSBC Holdings Plc (5 HK) focuses on its Asian operations or its US operations, so that weakness in France can be a negative surprise. While it is not a region the bank highlights – for obvious reasons – this in of itself can lead to limitations on coverage or analysis of HSBC’s business in France. The…

HSBC – Less Followed HSBC France Can Be a Drag on Group

United Kingdom

HSBC Holdings Plc is a British universal bank and financial services group operating worldwide. It offers a wide range of services including retail and personal banking, wealth management, commercial banking, global banking, and markets and securities services. The company was founded in British Hong Kong in 1865 and is headquartered in London, England.

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HSBC (HSBA LN)

HSBC Holdings – TRY Devaluation Is the First Major Devaulation Under IFRS 9, Risk for HSBC Is Real

The rapid and extensive devaluation of the TRY (USDTRY CURNCY) is the first major currency devaluation since banks adopted IFRS 9. Under the new...

Daniel Tabbush

HSBC – $7 Billion Valuation Hole on BoCom and Other Sundry 1H18 Data

“As at 30 June 2018, the fair value of HSBC’s investment in Bank of Communications Co., Limited (‘BoCom’) had been below the carrying amount for...

Daniel Tabbush

Deutsche Bank – Dumpster Fire Rages On

* 2Q18 Results Even lower than pre-release; * Overall results appear to have been managed; and *Large capital raise likely on the near-term...

Thomas J. Monaco

Deutsche Bank - Still A Dumpster Fire

* Deutsche Bank (DBK.GY/DB.US) [Deutsche] provided a preliminary update with improved capital metrics versus expectations; * Deutsche still...

Thomas J. Monaco

HSBC – Less Followed HSBC France Can Be a Drag on Group

With worsening data out of France, we must presume that credit metrics or at least credit growth can worsen. At the same time, credit quality can...

Daniel Tabbush

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