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)

<p>Poor loan processing caused high NPLs, and this is now changing. &nbsp;As NPLs move from 4.5% of loans toward 3.0%, investors will be rewarded. At 1.2x PB, BJBR is cheap vs peers, and with a high 10% dividend yield.</p>

Poor loan processing caused high NPLs, and this is now changing. &nbsp;As NPLs move from 4.5% of loans toward 3.0%, investors will be rewarded. At 1.2x PB, BJBR is cheap vs peers, and with a high 10% dividend yield.

A cheap Indonesian bank, with a 10% yield, where NPLs will decline fast. 

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

<ul>
<li>Despite what looked like a solid set of 1Q2022 results, <a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat Indonesia</a> has seen a sharp correction in its share price, which looks unjustified given a positive outlook.</li>
<li>The bank has 84% of its loan exposure to micro and ultra-micro customers, which generates higher returns than corporate lending plus it is improving returns through increasing digitalisation.</li>
<li>Management guidance for this year remains positive, and the bank is well-positioned to take advantage of the economic recovery with abundant liquidity and a low cost of funds.</li>
</ul>


Despite what looked like a solid set of 1Q2022 results, Bank Rakyat Indonesia has seen a sharp correction in its share price, which looks unjustified given a positive outlook.
The bank has 84% of its loan exposure to micro and ultra-micro customers, which generates higher returns than corporate lending plus it is improving returns through increasing digitalisation.
Management guidance for this year remains positive, and the bank is well-positioned to take advantage of the economic recovery with abundant liquidity and a low cost of funds.


Bank Rakyat Indonesia - Increasingly Digitalised Micro Champion

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>The review period for the LQ45 Index ends on 30 June. The changes should be announced in the last week of July, becoming effective after the close on 29 July.</li>
<li>Potential adds are <a href="https://www.smartkarma.com/entities/bank-jago-tbk-pt" target="_blank" data-smartkarma-citation="entities:31094:1" rel="noopener">Bank Jago Tbk PT (ARTO IJ)</a>, <a href="https://www.smartkarma.com/entities/adaro-minerals" target="_blank" data-smartkarma-citation="entities:35927:1" rel="noopener">Adaro Minerals (ADMR IJ)</a>, <a href="https://www.smartkarma.com/entities/bumi-resources-minerals-tbk" target="_blank" data-smartkarma-citation="entities:9136:1" rel="noopener">Bumi Resources Minerals Tbk (BRMS IJ)</a>, <a href="https://www.smartkarma.com/entities/transcoal-pacific-tbk-pt" target="_blank" data-smartkarma-citation="entities:28449:1" rel="noopener">Transcoal Pacific Tbk PT (TCPI IJ)</a> and <a href="https://www.smartkarma.com/entities/pt-dayamitra-telekomunikasi" target="_blank" data-smartkarma-citation="entities:34741:1" rel="noopener">Mitratel (MTEL IJ)</a>.</li>
<li>Potential deletions are <a href="https://www.smartkarma.com/entities/pembangunan-perumahan-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:19840:1" rel="noopener">Pembangunan Perumahan (Persero) (PTPP IJ)</a>, <a href="https://www.smartkarma.com/entities/pabrik-kertas-tjiwi-kimia-pt" target="_blank" data-smartkarma-citation="entities:19184:1" rel="noopener">Pabrik Kertas Tjiwi Kimia (TKIM IJ)</a>, <a href="https://www.smartkarma.com/entities/media-nusantara-citra-tbk-pt" target="_blank" data-smartkarma-citation="entities:6881:1" rel="noopener">Media Nusantara Citra (MNCN IJ)</a>, <a href="https://www.smartkarma.com/entities/gudang-garam-tbk-pt" target="_blank" data-smartkarma-citation="entities:722:1" rel="noopener">Gudang Garam (GGRM IJ)</a> and <a href="https://www.smartkarma.com/entities/chandra-asri-petrochemical" target="_blank" data-smartkarma-citation="entities:2556:1" rel="noopener">Chandra Asri Petrochemical (TPIA IJ)</a>.</li>
</ul>


The review period for the LQ45 Index ends on 30 June. The changes should be announced in the last week of July, becoming effective after the close on 29 July.
Potential adds are Bank Jago Tbk PT (ARTO IJ), Adaro Minerals (ADMR IJ), Bumi Resources Minerals Tbk (BRMS IJ), Transcoal Pacific Tbk PT (TCPI IJ) and Mitratel (MTEL IJ).
Potential deletions are Pembangunan Perumahan (Persero) (PTPP IJ), Pabrik Kertas Tjiwi Kimia (TKIM IJ), Media Nusantara Citra (MNCN IJ), Gudang Garam (GGRM IJ) and Chandra Asri Petrochemical (TPIA IJ).


LQ45 Index Rebalance Preview (July 2022): Candidates for Change

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat Indonesia (BBRI IJ)</a> booked strong growth in net profit in FY2021 beating its own guidance on most metrics and growing its exposure to MSMEs significantly.</li>
<li>Loan growth to micro, ultra-micro &amp; smaller corporate borrowers saw significant growth while its cost of funds came down and the cost of credit improved increasing profitability.</li>
<li>With the increasing use of digital channels to grow its customer base and huge potential to cross-sell to 137m depositors, <a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat</a> is a core holding amongst the Indonesian banks.</li>
</ul>



Bank Rakyat Indonesia (BBRI IJ) booked strong growth in net profit in FY2021 beating its own guidance on most metrics and growing its exposure to MSMEs significantly.
Loan growth to micro, ultra-micro &amp; smaller corporate borrowers saw significant growth while its cost of funds came down and the cost of credit improved increasing profitability.
With the increasing use of digital channels to grow its customer base and huge potential to cross-sell to 137m depositors, Bank Rakyat is a core holding amongst the Indonesian banks.


Bank Rakyat Indonesia (BBRI IJ) - MSME Marvel in the Making

Private Capital Markets

<ul>
<li>The recent <a href="https://www.smartkarma.com/entities/allo-bank-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:33551:1" rel="noopener">Allo Bank Indonesia Tbk PT (BBHI IJ)</a> transaction exemplifies the rush to build digital banking capabilities in Indonesia with strong shareholder ecosystem now in place</li>
<li>Mainstream banks are not standing still on digital banking capabilities building internal capabilities and in some cases standalone digital banks presenting tough competition for newcomers.</li>
<li>From a consumer digital banking perspective we see blu, <a href="https://www.smartkarma.com/entities/bank-jago-tbk-pt" target="_blank" data-smartkarma-citation="entities:31094:1" rel="noopener">Bank Jago (ARTO IJ)</a> , SeaBank, and <a href="https://www.smartkarma.com/entities/allo-bank-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:33551:1" rel="noopener">Allo Bank (BBHI IJ)</a> as having the greatest chance of success.</li>
</ul>


The recent Allo Bank Indonesia Tbk PT (BBHI IJ) transaction exemplifies the rush to build digital banking capabilities in Indonesia with strong shareholder ecosystem now in place
Mainstream banks are not standing still on digital banking capabilities building internal capabilities and in some cases standalone digital banks presenting tough competition for newcomers.
From a consumer digital banking perspective we see blu, Bank Jago (ARTO IJ) , SeaBank, and Allo Bank (BBHI IJ) as having the greatest chance of success.


CrossASEAN Digital - All Rise Indonesia's Digital Banks

Indonesia

PT Bank Raya Indonesia Tbk is an Indonesian commercial bank offering a comprehensive suite of financial services, including savings accounts, checking accounts, fixed deposits, and various loan products such as personal, housing, and vehicle loans. It operates through consumer, retail, middle, and micro segments, focusing on digital banking solutions and financial inclusion. The company is headquartered in Jakarta, Indonesia, and was founded in 1989.

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Bank Raya Indonesia (AGRO IJ)

A cheap Indonesian bank, with a 10% yield, where NPLs will decline fast.

Poor loan processing caused high NPLs, and this is now changing. As NPLs move from 4.5% of loans toward 3.0%, investors will be rewarded. At 1.2x...

Daniel Tabbush

Bank Rakyat Indonesia - Increasingly Digitalised Micro Champion

Bank Rakyat Indonesia has set some optimistic guidance for FY2022 loan growth and is well-positioned to take advantage of the recovery with a low...

Angus Mackintosh

LQ45 Index Rebalance Preview (July 2022): Candidates for Change

There could be 5 changes to the LQ45 Index at the July rebalance. The adds outperform the deletion the day after announcement and there is...

Brian Freitas

Bank Rakyat Indonesia (BBRI IJ) - MSME Marvel in the Making

With the increased use of digital channels to grow its customer base and huge potential to cross-sell to 137m depositors, Bank Rakyat is a core...

Angus Mackintosh

CrossASEAN Digital - All Rise Indonesia's Digital Banks

The recent Allo Bank Indonesia transaction exemplifies the rush to build digital banking capabilities in Indonesia with a strong shareholder...

Angus Mackintosh

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