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>
<a href="https://www.smartkarma.com/entities/wells-fargo-co" target="_blank" data-smartkarma-citation="entities:232:1" rel="noopener">Wells Fargo &amp; Co (WFC US)</a> reported strong loan growth and much lower credit costs 3Q25</li>
<li>The credit costs from WFC are stepped down, and fully reflected of weekly B/S from Fed data</li>
<li>C&amp;I loans are up a lot, indicative of economic strength, NPL ratio for all loans, are falling more</li>
</ul>



Wells Fargo &amp; Co (WFC US) reported strong loan growth and much lower credit costs 3Q25
The credit costs from WFC are stepped down, and fully reflected of weekly B/S from Fed data
C&amp;I loans are up a lot, indicative of economic strength, NPL ratio for all loans, are falling more


Wells Fargo - Strong Loan Growth and Credit Metrics, in Line with Weekly B/S Data from Fed

<ul>
<li>Weekly data from Fed shows continued strength for banks and the underlying US economy, for data 1 October</li>
<li>Loan loss reserves (LLR) just hit a new low growth rate at 0.72% YoY which should be definitive: credit metrics in US are exceptional, and improving </li>
<li>New loan growth data hit a new high, up 4.86 YoY, sensible given we now have a bit more time passage after rate cut</li>
</ul>


Weekly data from Fed shows continued strength for banks and the underlying US economy, for data 1 October
Loan loss reserves (LLR) just hit a new low growth rate at 0.72% YoY which should be definitive: credit metrics in US are exceptional, and improving 
New loan growth data hit a new high, up 4.86 YoY, sensible given we now have a bit more time passage after rate cut


US Banks - Loan Loss Reserves Growth Hits Low at 0.72% YoY & Loan Growth Hits New High at 4.86%

<ul>
<li>Commercial paper (CP) market is for short-term working capital loans, and growth in most recent week is very strong, up 41% YoY. </li>
<li>We view the CP market as a good view on bank credit demand, underlying credit demand for working capital, which can lead to more investment. </li>
<li>Loan loss reserve (LLR) data is exceptional, in that it is almost not rising at all, with the latest week's growth rate down to just 1.1% YoY</li>
</ul>


Commercial paper (CP) market is for short-term working capital loans, and growth in most recent week is very strong, up 41% YoY. 
We view the CP market as a good view on bank credit demand, underlying credit demand for working capital, which can lead to more investment. 
Loan loss reserve (LLR) data is exceptional, in that it is almost not rising at all, with the latest week's growth rate down to just 1.1% YoY


US Banks - Commercial Paper +41% YoY in Most Recent Week, Loans +4.7%, LLR Growth Dwindles +1.1%

<ul>
<li>Enhanced financial data from the Fed shows off balance sheet loan commitments rising strongly now +3.7% YoY in 2Q25 (quarterly data only, just released)</li>
<li>Data suggests that loan growth we see for US banks (in weekly HFD) is not being driven by off B/S moving on B/S, rather it is true underlying demand</li>
<li>Newly release Probability of Default (PD) for credit card loans in the US is very positive, with thew worst bucket of &gt;20% PD falling to just 3.0% of loans</li>
</ul>


Enhanced financial data from the Fed shows off balance sheet loan commitments rising strongly now +3.7% YoY in 2Q25 (quarterly data only, just released)
Data suggests that loan growth we see for US banks (in weekly HFD) is not being driven by off B/S moving on B/S, rather it is true underlying demand
Newly release Probability of Default (PD) for credit card loans in the US is very positive, with thew worst bucket of &gt;20% PD falling to just 3.0% of loans


US Banks - Off B/S Growth +3.7% YoY in New 2Q25 Data, Credit Card PD Improve Dramatically

<ul>
<li>Overnight CP market in the US reflects the Fed rate cut immediately. Rates on overnight non-financial CP for A2/P2 companies now 4.20% (18 Sept) from 4.45% (17 Sept)</li>
<li>Weekly B/S for US banks has been showing for some time accelerating loan volume, with debt 5-7% less expensive overnight, loan volume should continue to accelerate</li>
<li>Where loans at US banks are only 67% of deposits, a 25bps reduction on both pools (loans, deposits) can be NIM expansionary. There are many moving parts, though. </li>
</ul>


Overnight CP market in the US reflects the Fed rate cut immediately. Rates on overnight non-financial CP for A2/P2 companies now 4.20% (18 Sept) from 4.45% (17 Sept)
Weekly B/S for US banks has been showing for some time accelerating loan volume, with debt 5-7% less expensive overnight, loan volume should continue to accelerate
Where loans at US banks are only 67% of deposits, a 25bps reduction on both pools (loans, deposits) can be NIM expansionary. There are many moving parts, though. 


US Banks - Lower Rates: Higher Loan Volume, Low LDR Can Mean +NIM

United States

Morgan Stanley, a bank holding company, provides diversified financial services on a worldwide basis.  The Company operates a global securities business which serves individual and institutional investors and investment banking clients. Morgan Stanley also operates a global asset management business.

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Morgan Stanley (MS US)

Wells Fargo - Strong Loan Growth and Credit Metrics, in Line with Weekly B/S Data from Fed

Strong data out from Wells Fargo for 3Q25 is very much in keeping with the weekly balance sheet data from Fed during the quarter, and as we are...

Daniel Tabbush

US Banks - Loan Loss Reserves Growth Hits Low at 0.72% YoY & Loan Growth Hits New High at 4.86%

New release from the Fed shows loan loss reserves at US banks seeing a lower growth rate that any time in the weekly series, and loan growth is...

Daniel Tabbush

US Banks - Commercial Paper +41% YoY in Most Recent Week, Loans +4.7%, LLR Growth Dwindles +1.1%

Weekly data strengthens in US credit: CP shows 41% growth YoY in outstandings in most recent week. The small 1.1% growth rate of LLR for banks,...

Daniel Tabbush

US Banks - Off B/S Growth +3.7% YoY in New 2Q25 Data, Credit Card PD Improve Dramatically

US bank's off balance sheet data is just out, showing good, improving growth in commitments, suggesting underlying loan growth is real demand, not...

Daniel Tabbush

US Banks - Lower Rates: Higher Loan Volume, Low LDR Can Mean +NIM

Volume of loans and commercial paper was already strong, now that debt is cheaper, this can accelerate. O/N CP rates already show rate cut. Low LDR...

Daniel Tabbush

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