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

*Overstated 3Q21 Result: DBS Group Holdings (DBS.SP) [DBS] reported 3Q21 results of SGD 1.7 bn, flat linked quarter. When one accounts for the unnecessary negative loss provision of SGD 70 mn (down 188.6%) while credit was weaker, DBS’ results would appear to be grossly overstated;*Watch Your Credit: We struggle continue to believe that DBS’ due diligence had actually caught all of LVB’s risk (see discussion below), and remain unconvinced that the moratorium exits are anything more than additional reliance on government schemes and relief programs. DBS has disclosed absolutely nothing about Shenzhen Rural Commercial Bank’s (SRCB) fundamentals. We feel that reserves should be shored up in the neighborhood of SGD 1.1 bn – amounting now to about a half quarter of operating results; and *Deal Distractions Mount:  While SRCB dos not appear to be riddled with problems the way LVB is, no doubt there will be issues to contend with.  DBS apparently isn’t done with its shopping spree, being in the running for parts of Citigroup's (C.US) consumer business in Asia. Frankly, DBS needs to focus on improving its own legacy issues before it starts both taking on those of other financial institutions.

*Overstated 3Q21 Result: DBS Group Holdings (DBS.SP) [DBS] reported 3Q21 results of SGD 1.7 bn, flat linked quarter. When one accounts for the unnecessary negative loss provision of SGD 70 mn (down 188.6%) while credit was weaker, DBS’ results would appear to be grossly overstated;*Watch Your Credit: We struggle continue to believe that DBS’ due diligence had actually caught all of LVB’s risk (see discussion below), and remain unconvinced that the moratorium exits are anything more than additional reliance on government schemes and relief programs. DBS has disclosed absolutely nothing about Shenzhen Rural Commercial Bank’s (SRCB) fundamentals. We feel that reserves should be shored up in the neighborhood of SGD 1.1 bn – amounting now to about a half quarter of operating results; and *Deal Distractions Mount:  While SRCB dos not appear to be riddled with problems the way LVB is, no doubt there will be issues to contend with.  DBS apparently isn’t done with its shopping spree, being in the running for parts of Citigroup's (C.US) consumer business in Asia. Frankly, DBS needs to focus on improving its own legacy issues before it starts both taking on those of other financial institutions.

DBS Group Holdings – Pushing The Envelope

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)

We look at OCBC's results as a guide, window on Malaysia credit metrics. The bank saw substantial deterioration here, affecting the Group as a whole. There are negative implications for Malaysia's banks, which have not yet reported results.

We look at OCBC's results as a guide, window on Malaysia credit metrics. The bank saw substantial deterioration here, affecting the Group as a whole. There are negative implications for Malaysia's banks, which have not yet reported results. 

*Challenging Result: Oversea Chinese Banking Corp. (OCBC.SP) [OCBC] reported 3Q21 net profit of SGD 1.2 bn, a SGD 64 mn (5.5%) increase on a linked quarter basis. OCBC’s bottom-line improvement was primarily attributable to a decrease in loss provisions, as credit risk remains elevated; a tax rate decline; and stronger insurer earnings; and*Credit Breaking Down Again: By our calculation, we find that net new NPL growth has increased again to SGD 448 mn or 44.9% on an annualized basis. Given the increase in net new NPLs, reserve would appear to now be wanting by SGD 2.0 bn plus or just under two quarters of bottom-line results.

*Challenging Result: Oversea Chinese Banking Corp. (OCBC.SP) [OCBC] reported 3Q21 net profit of SGD 1.2 bn, a SGD 64 mn (5.5%) increase on a linked quarter basis. OCBC’s bottom-line improvement was primarily attributable to a decrease in loss provisions, as credit risk remains elevated; a tax rate decline; and stronger insurer earnings; and*Credit Breaking Down Again: By our calculation, we find that net new NPL growth has increased again to SGD 448 mn or 44.9% on an annualized basis. Given the increase in net new NPLs, reserve would appear to now be wanting by SGD 2.0 bn plus or just under two quarters of bottom-line results.

Oversea Chinese Banking Corp.- Negative Jaws & Weaker Credit

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

FWD Group Holdings / Equity Capital Markets

FWD, a pan-Asian life insurer founded by Richard Li, aims to raise up to US$3bn in its US IPO. FWD is a pan-Asia life insurer operating in ten markets including Hong Kong (and Macau), Thailand (and Cambodia), Japan, the Philippines, Indonesia, Singapore, Vietnam and Malaysia. Southeast Asia markets contributed over 40% of its Value of New Business (VNB) in 2020. It had served over 9.9m customers as of Jun 21.In this note, we will talk about the positive aspects of the deal.

FWD, a pan-Asian life insurer founded by Richard Li, aims to raise up to US$3bn in its US IPO. FWD is a pan-Asia life insurer operating in ten markets including Hong Kong (and Macau), Thailand (and Cambodia), Japan, the Philippines, Indonesia, Singapore, Vietnam and Malaysia. Southeast Asia markets contributed over 40% of its Value of New Business (VNB) in 2020. It had served over 9.9m customers as of Jun 21.In this note, we will talk about the positive aspects of the deal.

FWD Pre-IPO - The Positives - Growing Fast

Prudential aims to raise around US$2.8bn via an international and public offering in Hong Kong. The deal has been in the pipeline for a while and hence, is very well flagged.In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Prudential aims to raise around US$2.8bn via an international and public offering in Hong Kong. The deal has been in the pipeline for a while and hence, is very well flagged.In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Prudential Hong Kong Offering - Well Flagged Pivot to Asia, Mind the Liquidity Gap

Singapore

Oversea-Chinese Banking Corporation Limited offers a comprehensive range of financial services.  The Company's services include deposit-taking, corporate, enterprise and personal lending, international trade financing, investment banking, private banking, treasury, stockbroking, insurance, credit cards, cash management, asset management and other financial and related services.

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OCBC (OCBC SP)

DBS Group Holdings – Pushing The Envelope

DBS: DBS reported flat 3Q21 QOQ results. Accounting for the unnecessary negative loss provision of SGD 70 mn (down 188.6%) while credit was weaker,...

Thomas J. Monaco

Deterioration In Malaysia

We look at OCBC's results as a guide, window on Malaysia credit metrics. The bank saw substantial deterioration here, suggesting even greater risk...

Daniel Tabbush

Oversea Chinese Banking Corp.- Negative Jaws & Weaker Credit

OCBC: OCBC reported a QOQ 3Q21 net profit increase of 5.5%, as it pulled on numerous levers. Net new NPL growth increased 44.9% annualized, and...

Thomas J. Monaco

FWD Pre-IPO - The Positives - Growing Fast

FWD, a pan-Asian life insurer founded by Richard Li, aims to raise up to US$3bn in its US IPO. In this note, we will talk about the positive...

Sumeet Singh

Prudential Hong Kong Offering - Well Flagged Pivot to Asia, Mind the Liquidity Gap

Prudential aims to raise around US$2.8bn via an international and public offering in Hong Kong. The deal has been in the pipeline for a while.

Sumeet Singh

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