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>The most recent Fed Financial Stability Report released on 25 April shows that Other Lending to FI's for banks includes Private Credit </li>
<li>This means that the C&amp;I loan category of banks is partly diluted, where banks are providing this lending via private lenders </li>
<li>The implications are highly positive to the understanding of underlying credit demand, economic strength, and bank health</li>
</ul>


The most recent Fed Financial Stability Report released on 25 April shows that Other Lending to FI's for banks includes Private Credit 
This means that the C&amp;I loan category of banks is partly diluted, where banks are providing this lending via private lenders 
The implications are highly positive to the understanding of underlying credit demand, economic strength, and bank health


US Banks - Granular Data in Fed Report, Shows Private Credit Growth Is Strong

<ul>
<li>A commercial &amp; industrial (C&amp;I) loan commitment is a commitment to lend that a bank provides a company for a fee, so that draw-down can be immediate, when needed</li>
<li>Granular quarterly data from the Fed shows unused C&amp;I loan commitments down USD142bn QoQ in 4Q24 or -5.2% QoQ. </li>
<li>The only other time there was such a sharp contraction was in 1Q20 when it was -12.5% QoQ or where it was down USD266bn QoQ. </li>
</ul>


A commercial &amp; industrial (C&amp;I) loan commitment is a commitment to lend that a bank provides a company for a fee, so that draw-down can be immediate, when needed
Granular quarterly data from the Fed shows unused C&amp;I loan commitments down USD142bn QoQ in 4Q24 or -5.2% QoQ. 
The only other time there was such a sharp contraction was in 1Q20 when it was -12.5% QoQ or where it was down USD266bn QoQ. 


US Banks - Off Balance Sheet, Decline of C&I Commitments, Not A Good Sign

<ul>
<li>While loan growth continues to accelerate for US banks in weekly HFD, the single most important driver is loans to other financial institutions</li>
<li>Cash growth is also very high and can be a sign of risk aversion, with cash up USD196bn vs loans up USD98bn from end Jan to 9 April </li>
<li>It is unclear which of the institutions contained in the Fed definition of other FI's, where commercial banks are lending, but it does not feel core</li>
</ul>


While loan growth continues to accelerate for US banks in weekly HFD, the single most important driver is loans to other financial institutions
Cash growth is also very high and can be a sign of risk aversion, with cash up USD196bn vs loans up USD98bn from end Jan to 9 April 
It is unclear which of the institutions contained in the Fed definition of other FI's, where commercial banks are lending, but it does not feel core


US Banks - Loans to Other FI's and Cash, Are Driving Most All Growth, Neither Is Positive

<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

<ul>
<li>Momentum in weekly HFD for loan growth at US banks is improving, now reaching 3.0% YoY for week 5 March data, a figure not reached since at least early 2024</li>
<li>The growth rate in large time deposits continues to remain incredibly low now at 1.2% YoY in the most recent week - these funds are more expensive than other deposits. </li>
<li>Loan loss reserves are still much higher than YE19 at 1.59% of loans there is a distinct bottoming and turning over of this ratio - suggesting better credit metrics.</li>
</ul>


Momentum in weekly HFD for loan growth at US banks is improving, now reaching 3.0% YoY for week 5 March data, a figure not reached since at least early 2024
The growth rate in large time deposits continues to remain incredibly low now at 1.2% YoY in the most recent week - these funds are more expensive than other deposits. 
Loan loss reserves are still much higher than YE19 at 1.59% of loans there is a distinct bottoming and turning over of this ratio - suggesting better credit metrics.


US Banks - Weekly YoY Loan Growth Hits 3.0% Peak Since Early 2024

United States

JPMorgan Chase & Co. provides global financial services and retail banking. The Company provides services such as investment banking, treasury and securities services, asset management, private banking, card member services, commercial banking, and home finance. JP Morgan Chase serves business enterprises, institutions, and individuals.

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JPMorgan Chase & Co (JPM US)

US Banks - Granular Data in Fed Report, Shows Private Credit Growth Is Strong

There is granular data from Fed showing that loans to nonbank FI's will include CLOs and private credit. This means that C&I lending is stronger...

Daniel Tabbush

US Banks - Off Balance Sheet, Decline of C&I Commitments, Not A Good Sign

Off balance sheet data for US banks shows C&I loan commitments down a lot in 4Q24, the most recent comparable period was in early FY20. This can be...

Daniel Tabbush

US Banks - Loans to Other FI's and Cash, Are Driving Most All Growth, Neither Is Positive

US banks are seeing most of their loan growth to FI's rather than to the core economy which is not positive. Bank earnings can still be good, but...

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

US Banks - Weekly YoY Loan Growth Hits 3.0% Peak Since Early 2024

US banks weekly HFD on loans is positive, with acceleration to highest rates of growth since at least early FY24. Large time deposits and loan loss...

Daniel Tabbush

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