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>While maybe deflation may not be a concern right now, we believe that high real rates will be a consideration of the Fed</li>
<li>With average lending rates at 8.5% in August and the All Urban CPI Index recording 2.5% inflation in the August, real lending rates are high at 5.97%</li>
<li>When figures were similar, it was July/August 2007 - rarely has there been a time in recent years, where real loan rates have been so high, without Fed reaction</li>
</ul>


While maybe deflation may not be a concern right now, we believe that high real rates will be a consideration of the Fed
With average lending rates at 8.5% in August and the All Urban CPI Index recording 2.5% inflation in the August, real lending rates are high at 5.97%
When figures were similar, it was July/August 2007 - rarely has there been a time in recent years, where real loan rates have been so high, without Fed reaction


Fed Rate Cut - Real Lending Rates at 5.97% Near Where Peaking In August 2007

<ul>
<li>The Fed's Michael Barr has proposed recommendations to adjust Basel III rules, calculations on 11 September, so this is very new</li>
<li>JPM, CITI, BAC, GS, MS, WFC, SST, are G-SIBs in the US in order of 'importance to system' so that JPM is ranked as first and State Street the lowest</li>
<li>Of these banks, only WFC has seen its loans contract over the past two and a half years, which can mean it is marginally better prepared</li>
</ul>


The Fed's Michael Barr has proposed recommendations to adjust Basel III rules, calculations on 11 September, so this is very new
JPM, CITI, BAC, GS, MS, WFC, SST, are G-SIBs in the US in order of 'importance to system' so that JPM is ranked as first and State Street the lowest
Of these banks, only WFC has seen its loans contract over the past two and a half years, which can mean it is marginally better prepared


US Banks and New Capital Rules - GSIBs 9% More Capital, Can Impact Lending, WFC Stands Out Best

Tracking developments across tech supply chains, Tech Supply Chain Tracker

Tech Supply Chain Tracker

Tracking developments across tech supply chains

Equity Bottom-Up

<ul><li>Taiwan's defense sector is seen as undervalued, representing a missed opportunity in the global arms race.</li><li>Malaysian officials hold a meeting with Tesla, but plans for a factory in the country are considered unlikely.</li><li>Retailers are using ICT and personnel to drive growth in green energy trading, while Samsung leads the gaming monitor market.</li></ul>

Taiwan's defense sector is seen as undervalued, representing a missed opportunity in the global arms race.Malaysian officials hold a meeting with Tesla, but plans for a factory in the country are considered unlikely.Retailers are using ICT and personnel to drive growth in green energy trading, while Samsung leads the gaming monitor market.

Tech Supply Chain Tracker (29-Aug-2024): Taiwan's defense sector missed opportunity in arms race.

<ul>
<li>High frequency data in the US for mortgage loan applications and mortgage loan volume is improving, not suggestive of recession</li>
<li>Total domestic credit growth in the US is accelerating in recent months, and this can continue given the HFD on mortgages</li>
<li>Credit metrics can remain a concern, especially in CRE and card lending, despite the improved delta in mortgage lending and total lending</li>
</ul>


High frequency data in the US for mortgage loan applications and mortgage loan volume is improving, not suggestive of recession
Total domestic credit growth in the US is accelerating in recent months, and this can continue given the HFD on mortgages
Credit metrics can remain a concern, especially in CRE and card lending, despite the improved delta in mortgage lending and total lending


US Banks & Economy - HFD Mortgage Data Shows Weekly Improvements, Credit Growth Improving in US

<ul>
<li>The headline from The Nikkei is incredible: "NY Office Building Sold at '97% Discount.' This is a 23 floor building in midtown Manhattan which had 35% occupancy, built in 1960's. </li>
<li>Banks hold office buildings as collateral for their CRE loans, basically. They also hold other buildings at collateral, like shopping malls and strip malls. </li>
<li>The risk for US banks from worsening collateral values in CRE is much greater at small US banks (outside the largest 25 by assets) where they have high exposure.</li>
</ul>


The headline from The Nikkei is incredible: "NY Office Building Sold at '97% Discount.' This is a 23 floor building in midtown Manhattan which had 35% occupancy, built in 1960's. 
Banks hold office buildings as collateral for their CRE loans, basically. They also hold other buildings at collateral, like shopping malls and strip malls. 
The risk for US banks from worsening collateral values in CRE is much greater at small US banks (outside the largest 25 by assets) where they have high exposure.


US Banks - NY CRE Sold at 97% Discount, HFD Weekly Data Shows Small US Banks At Most Risk

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)

Fed Rate Cut - Real Lending Rates at 5.97% Near Where Peaking In August 2007

Real rates are too high in the US and they have been rising sharply. This is likely where the the Fed will need to focus when considering rate...

Daniel Tabbush

US Banks and New Capital Rules - GSIBs 9% More Capital, Can Impact Lending, WFC Stands Out Best

New proposals on capital regulations for banks can mean more capital for the largest banks, but there are major differences between the GSIBs.

Daniel Tabbush

Tech Supply Chain Tracker (29-Aug-2024): Taiwan's defense sector missed opportunity in arms race.

Taiwan's defense sector is overlooked, Malaysia meets Tesla but factory plans may not happen, July 2024 notebook shipment update, retail green...

Tech Supply Chain Tracker

US Banks & Economy - HFD Mortgage Data Shows Weekly Improvements, Credit Growth Improving in US

HFD on mortgage loans is improving substantially, not suggestive of a weakening economy, impending recession. Overall loan growth is also...

Daniel Tabbush

US Banks - NY CRE Sold at 97% Discount, HFD Weekly Data Shows Small US Banks At Most Risk

The headline of a NY office building selling at a 97% discount should be chilling for small US banks, which have 44% of their loans in CRE. Large...

Daniel Tabbush

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