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)

The most visible sign of credit quality for banks are non-performing loans (NPL) or the NPL ratio. But there are many other indicators of credit quality that are less visible. Net write-offs are one such item. While not heralded with vigor in Asia Pacific, it is a data series that US bank analysts weed out as much or more so than NPL data. And it is often a leading indicator of deteriorating credit quality. In China, average NPL ratios have hardly moved in the past two years. Net…

The most visible sign of credit quality for banks are non-performing loans (NPL) or the NPL ratio. But there are many other indicators of credit quality that are less visible. Net write-offs are one such item. While not heralded with vigor in Asia Pacific, it is a data series that US bank analysts weed out as much or more so than NPL data. And it is often a leading indicator of deteriorating credit quality. In China, average NPL ratios have hardly moved in the past two years. Net…

China Banks: Rising Write-Offs at Odds with NPLs

While non-performing loan (NPL) ratios have not blown out for China’s banks nor has profit imploded, we would caution against becoming complacent. There remains considerable concern with ‘overdue loans’ and the distribution of NPLs, while China corporate financials remain frail. Aside from this, we must recognize that banks' credit costs as a proportion of loans does suggest a nasty and prolonged NPL cycle. Perhaps this is why banks’ market capitalisation as a percentage of assets continues to…

While non-performing loan (NPL) ratios have not blown out for China’s banks nor has profit imploded, we would caution against becoming complacent. There remains considerable concern with ‘overdue loans’ and the distribution of NPLs, while China corporate financials remain frail. Aside from this, we must recognize that banks' credit costs as a proportion of loans does suggest a nasty and prolonged NPL cycle. Perhaps this is why banks’ market capitalisation as a percentage of assets continues to…

Founder, Supreme Peoples Court Monitor

Susan Finder

Founder

Supreme Peoples Court Monitor

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/024/749/original/Screen%20Shot%202017-04-21%20at%208.49.13%20PM.png?1492779009" class="editor-image img-responsive" data-smartkarma-image-id="24749"></figure><div class="content-caption">CBRC penalty decision</div>I recently wrote about penalties imposed by China's securities regulator, the China Securities Regulatory Commission (CSRC).  It has been widely reported by the business and legal press in greater China that China's bank regulator, the China Banking Regulatory Commission (CBRC) has launched a <a href="http://www.caixinglobal.com/2017-04-17/101079381.html" target="_blank">regulatory frenzy</a> and <a href="http://newscontent.cctv.com/NewJsp/news.jsp?fileId=403998" target="_blank">inspection campaign</a> to crack down on abuses in the banking sector.  The regulator revealed in an announcement on its <a href="http://www.cbrc.gov.cn/chinese/home/docView/4D9893F514B14E0894CA1B85335C7017.html" target="_blank">website</a> early April penalties that it had…

CBRC penalty decisionI recently wrote about penalties imposed by China's securities regulator, the China Securities Regulatory Commission (CSRC).  It has been widely reported by the business and legal press in greater China that China's bank regulator, the China Banking Regulatory Commission (CBRC) has launched a regulatory frenzy and inspection campaign to crack down on abuses in the banking sector.  The regulator revealed in an announcement on its website early April penalties that it had…

China's Bank Regulator Launches Regulatory Campaign

The China bank numbers show us once again that quarterly figures during the year are hardly reliable. This is because it is in the final quarter when banks top up their impairment costs, showing that previous periods are highly inflated.  At the same time, where stated NPL figures are increasingly held in question, for some banks, special mention loans are soaring. This is yet another way to limit impairment costs and inflate profit.Profit growth of selected China banks (% ch QoQ)<table class="table table-striped"><tbody>
<tr>
<td> </td>
<td style="text-align: right;">2Q16</td>
<td style="text-align: right;">3Q16</td>
<td style="text-align: right;">4Q16</td>
</tr>
<tr>
<td>…</td>
</tr>
</tbody></table>

The China bank numbers show us once again that quarterly figures during the year are hardly reliable. This is because it is in the final quarter when banks top up their impairment costs, showing that previous periods are highly inflated.  At the same time, where stated NPL figures are increasingly held in question, for some banks, special mention loans are soaring. This is yet another way to limit impairment costs and inflate profit.Profit growth of selected China banks (% ch QoQ)

 
2Q16
3Q16
4Q16


…



Sequential Profit Is Telling for China Banks

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

Ping An Bank Co Ltd provides a full range of commercial banking services including RMB and foreign currency deposit, loan, international and domestic settlement, discount, currency trading, letter of credit, bank guarantee, and other related services.

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Ping An Bank Co Ltd A (000001 CH)

China Banks: Rising Write-Offs at Odds with NPLs

The most visible sign of credit quality for banks are non-performing loans (NPL) or the NPL ratio. But there are many other indicators of credit...

Daniel Tabbush

China Banks: We Must Not Be Complacent

While non-performing loan (NPL) ratios have not blown out for China’s banks nor has profit imploded, we would caution against becoming complacent....

Daniel Tabbush

China's Bank Regulator Launches Regulatory Campaign

I recently wrote about penalties imposed by China's securities regulator, the China Securities Regulatory Commission (CSRC). It has been widely...

Susan Finder

Sequential Profit Is Telling for China Banks

The China bank numbers show us once again that quarterly figures during the year are hardly reliable. This is because it is in the final quarter...

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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