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

Equity Bottom-Up

* Capital Hole Has Been Dug: Punjab National Bank (PNB.IN) is in desperate need of a INR 550 bn capital infusion post the Nirav Modi fraud; this amounts to 134% of stated equity, in our view.* No Credible Plan in Place: Despite knowing of this fraud for several months, PNB nor the government would appear to have any form of credible bailout plan in place. On top of the interest reversals associated from this fraud, we find that the bank is seeing additional pressures on funding costs while…

* Capital Hole Has Been Dug: Punjab National Bank (PNB.IN) is in desperate need of a INR 550 bn capital infusion post the Nirav Modi fraud; this amounts to 134% of stated equity, in our view.* No Credible Plan in Place: Despite knowing of this fraud for several months, PNB nor the government would appear to have any form of credible bailout plan in place. On top of the interest reversals associated from this fraud, we find that the bank is seeing additional pressures on funding costs while…

Punjab National Bank – That Sinking Feeling

* Unchallenged 1Q18 Result: The Group posted a weak 1Q18 result, to which no analysts really challenged.* No Subsidiary Discussion Was Had: HSBC NA still remains a massive earnings drag to overall Group profitability - chronically being unable to break-even on an operating basis.* Time to Dispose of This Mess: HSBC NA franchise remains plagued by the legacy Household International (acquired 2003) fiasco. After disposing of its higher yielding assets, HSBC NA cannot earn money at this subsidiary…

* Unchallenged 1Q18 Result: The Group posted a weak 1Q18 result, to which no analysts really challenged.* No Subsidiary Discussion Was Had: HSBC NA still remains a massive earnings drag to overall Group profitability - chronically being unable to break-even on an operating basis.* Time to Dispose of This Mess: HSBC NA franchise remains plagued by the legacy Household International (acquired 2003) fiasco. After disposing of its higher yielding assets, HSBC NA cannot earn money at this subsidiary…

HSBC Holdings Plc – Full of Buffalo-Ney

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.

<a href="https://www.smartkarma.com/entities/516" target="_blank" data-smartkarma-citation="entities:516:1">HSBC Holdings Plc (5 HK)</a>'s new release for 1Q18 makes it less easy than normal to gauge credit quality. Under IFRS 9 there is new disclosure to match the new accounting. We must now focus on stage 1, stage 2 and stage 3 loans. The first two categories, are most like the old classifications, pass loans and special mention loans. These are not non-performing loans (NPLs). Stage 3 loans will now include most all NPLs. For HSBC there is also a worse category that is also part of NPLs: purchased bad…

HSBC Holdings Plc (5 HK)'s new release for 1Q18 makes it less easy than normal to gauge credit quality. Under IFRS 9 there is new disclosure to match the new accounting. We must now focus on stage 1, stage 2 and stage 3 loans. The first two categories, are most like the old classifications, pass loans and special mention loans. These are not non-performing loans (NPLs). Stage 3 loans will now include most all NPLs. For HSBC there is also a worse category that is also part of NPLs: purchased bad…

HSBC – Deciphering Credit Quality Under New IFRS 9 Accounting

The US banking subsidiary of <a href="https://www.smartkarma.com/entities/516" target="_blank" data-smartkarma-citation="entities:516:1">HSBC Holdings Plc (5 HK)</a>, HSBC Bank USA can hardly come up for air, despite rising interest rates. The concern that <a href="https://www.smartkarma.com/insights/us-credit-cycle-revealing-frailties" target="_blank">we have had for US banks</a> with respect to a higher rate of growth of for interest costs compared with interest income is especially poor at this bank. And this is despite what should be a reputational positive of the parent bank. Perhaps this is changing?HSBC Bank USA saw its interest income rise US$59 million in 1Q18 YoY, but this was dwarfed by its…

The US banking subsidiary of HSBC Holdings Plc (5 HK), HSBC Bank USA can hardly come up for air, despite rising interest rates. The concern that we have had for US banks with respect to a higher rate of growth of for interest costs compared with interest income is especially poor at this bank. And this is despite what should be a reputational positive of the parent bank. Perhaps this is changing?HSBC Bank USA saw its interest income rise US$59 million in 1Q18 YoY, but this was dwarfed by its…

HSBC Bank USA – Unable to Come up for Air

* Weak Result: Standard Chartered plc (2888.HK/STAN.LN) reported weak underlying results despite unreasonably lowering loan loss provisions – as underlying revenues came up short.* Under-Provided For: With reserves at 57% of problem loans, Standard Chartered has among the lowest coverage of the major Asian banks – and the USD 4 bn reserve shortfall (nearly a year’s worth of bottom-line).* Regulatory Charges:  We believe that Standard Chartered’s regulatory investigation could lead to a material…

* Weak Result: Standard Chartered plc (2888.HK/STAN.LN) reported weak underlying results despite unreasonably lowering loan loss provisions – as underlying revenues came up short.* Under-Provided For: With reserves at 57% of problem loans, Standard Chartered has among the lowest coverage of the major Asian banks – and the USD 4 bn reserve shortfall (nearly a year’s worth of bottom-line).* Regulatory Charges:  We believe that Standard Chartered’s regulatory investigation could lead to a material…

Standard Chartered Plc – Turnaround Looks to Be Longer Than Expected

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)

Punjab National Bank – That Sinking Feeling

* Capital Hole Has Been Dug: Punjab National Bank (PNB.IN) is in desperate need of a INR 550 bn capital infusion post the Nirav Modi fraud; this...

Thomas J. Monaco

HSBC Holdings Plc – Full of Buffalo-Ney

* Unchallenged 1Q18 Result: The Group posted a weak 1Q18 result, to which no analysts really challenged.* No Subsidiary Discussion Was Had: HSBC NA...

Thomas J. Monaco

HSBC – Deciphering Credit Quality Under New IFRS 9 Accounting

HSBC Holdings Plc (5 HK)'s new release for 1Q18 makes it less easy than normal to gauge credit quality. Under IFRS 9 there is new disclosure to...

Daniel Tabbush

HSBC Bank USA – Unable to Come up for Air

The US banking subsidiary of HSBC Holdings Plc (5 HK), HSBC Bank USA can hardly come up for air, despite rising interest rates. The concern that we...

Daniel Tabbush

Standard Chartered Plc – Turnaround Looks to Be Longer Than Expected

* Weak Result: Standard Chartered plc (2888.HK/STAN.LN) reported weak underlying results despite unreasonably lowering loan loss provisions – as...

Thomas J. Monaco

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