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)

It is hard to envisage a positive reading of the abysmal 6.1% YoY fixed asset investment growth in China for May 2018 year-to-date. Headlines and commentators have urged that a recovery in China is underway for some time. If this were so, fixed asset investment growth would not likely be on a downward trend for so long, while now reaching the lowest point in our time series that spans 23 years.  Perhaps as interesting, is that the average rate of growth of all the YTD periods is 20.0%. Retail…

It is hard to envisage a positive reading of the abysmal 6.1% YoY fixed asset investment growth in China for May 2018 year-to-date. Headlines and commentators have urged that a recovery in China is underway for some time. If this were so, fixed asset investment growth would not likely be on a downward trend for so long, while now reaching the lowest point in our time series that spans 23 years.  Perhaps as interesting, is that the average rate of growth of all the YTD periods is 20.0%. Retail…

China Banks – Worsening Macro Will See Higher Bad Loans

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

PICC Property & Casualty H / Equity Bottom-Up

* Regulatory Challenges: Auto pricing reform is negative for P&amp;C segment loss ratios given the higher premium discounts; and mainland Chinese regulators also released measures restricting related party transactions, which should impact PICC.* Re-Cap Risk: PICC P&amp;C’s A-share investments equate to the value of its shareholder’s equity – making solvency margins quite vulnerable to A-share market volatility – not to mention the risk associated with its alternative investment book. Further, its…

* Regulatory Challenges: Auto pricing reform is negative for P&amp;C segment loss ratios given the higher premium discounts; and mainland Chinese regulators also released measures restricting related party transactions, which should impact PICC.* Re-Cap Risk: PICC P&amp;C’s A-share investments equate to the value of its shareholder’s equity – making solvency margins quite vulnerable to A-share market volatility – not to mention the risk associated with its alternative investment book. Further, its…

We do not claim that ChangChan Rural Commercial Bank (CCCB) is indicative of the large listed banks in China. It is likely of lower quality. Nonetheless this unlisted, unknown, rural bank, shows how dramatic margin pressure can be in China. <a href="https://www.smartkarma.com/entities/9142" target="_blank" data-smartkarma-citation="entities:9142:1">Huaxia Bank Co Ltd A (600015 CH)</a> is far more main-stream and displays accelerated margin pressure in 2Q17. Others will reveal this to a degree, depending on depositor confidence, loan quality and liability structure. This remains a critical theme in China…

We do not claim that ChangChan Rural Commercial Bank (CCCB) is indicative of the large listed banks in China. It is likely of lower quality. Nonetheless this unlisted, unknown, rural bank, shows how dramatic margin pressure can be in China. Huaxia Bank Co Ltd A (600015 CH) is far more main-stream and displays accelerated margin pressure in 2Q17. Others will reveal this to a degree, depending on depositor confidence, loan quality and liability structure. This remains a critical theme in China…

Unknown, Fringe China Bank Reveals Telling Margin Erosion

Few banks in China have announced 2Q17 results. Even fewer report net interest margin data for the period, or provide sufficient data for its calculation. <a href="https://www.smartkarma.com/entities/9142" target="_blank" data-smartkarma-citation="entities:9142:1">Huaxia Bank Co Ltd (A) (600015 CH)</a> data is fairly complete, and reveals an accelerated erosion of net interest margins. Where non-performing loan (NPL) ratios can be flattered in a variety of ways, margins are less easy to control. This is especially the case with rising non-accrual loans; NPLs; rescheduled loans; or loans at below market…

Few banks in China have announced 2Q17 results. Even fewer report net interest margin data for the period, or provide sufficient data for its calculation. Huaxia Bank Co Ltd (A) (600015 CH) data is fairly complete, and reveals an accelerated erosion of net interest margins. Where non-performing loan (NPL) ratios can be flattered in a variety of ways, margins are less easy to control. This is especially the case with rising non-accrual loans; NPLs; rescheduled loans; or loans at below market…

Margin Erosion Accelerates at China's Hua Xia Bank

Head of Research at Fusion Wealth Management Ltd

Michael McGaughy

In my research and investing I stress three things: people, structure, and value.  I look for companies that are controlled and managed by quality people, have corporate structures that align minority and majority shareholder interests and trade at valuations that are below fair value if not outright cheap. This note is actually not about any of that and instead just a quick one about bitcoin and how my initial skepticism may have been wrong.  I usually don’t write “macro” or ‘thought pieces’…

In my research and investing I stress three things: people, structure, and value.  I look for companies that are controlled and managed by quality people, have corporate structures that align minority and majority shareholder interests and trade at valuations that are below fair value if not outright cheap. This note is actually not about any of that and instead just a quick one about bitcoin and how my initial skepticism may have been wrong.  I usually don’t write “macro” or ‘thought pieces’…

China

Huaxia Bank Co. Ltd. operates banking businesses. The Company offers deposits, loans, settlement, bill discounting, currency trading, bank guarantee, wealth management, and other banking services. Huaxia Bank provides services for enterprises and individuals.

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Huaxia Bank Co Ltd A (600015 CH)

China Banks – Worsening Macro Will See Higher Bad Loans

It is hard to envisage a positive reading of the abysmal 6.1% YoY fixed asset investment growth in China for May 2018 year-to-date. Headlines and...

Daniel Tabbush

PICC P&C – Heavy Headwinds

* Regulatory Challenges: Auto pricing reform is negative for P&C segment loss ratios given the higher premium discounts; and mainland Chinese...

Thomas J. Monaco

Unknown, Fringe China Bank Reveals Telling Margin Erosion

We do not claim that ChangChan Rural Commercial Bank (CCCB) is indicative of the large listed banks in China. It is likely of lower quality....

Daniel Tabbush

Margin Erosion Accelerates at China's Hua Xia Bank

Few banks in China have announced 2Q17 results. Even fewer report net interest margin data for the period, or provide sufficient data for its...

Daniel Tabbush

Bitcoin - The View From Lagos

In my research and investing I stress three things: people, structure, and value. I look for companies that are controlled and managed by quality...

Michael McGaughy

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