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)

For sure NPLs are up in 1Q16 for Indonesia’s banks. But we are sanguine about the outlook for these banks, which rank well on most every measure in Asia and the world. We look more closely at indebted companies unable to service loans; distribution of banks within Indonesia; and ability to absorb bad loans. Save to say, BCA, BTPN, BJBR and BMRI remain some of the more interesting banks in the region to us.<div class="content-highlight">We examine Indonesia’s non-financial companies interest coverage and debt levels. </div>An…

For sure NPLs are up in 1Q16 for Indonesia’s banks. But we are sanguine about the outlook for these banks, which rank well on most every measure in Asia and the world. We look more closely at indebted companies unable to service loans; distribution of banks within Indonesia; and ability to absorb bad loans. Save to say, BCA, BTPN, BJBR and BMRI remain some of the more interesting banks in the region to us.We examine Indonesia’s non-financial companies interest coverage and debt levels. An…

Indonesia - Rising Bad Loans Not as Dire as Some Make Out

Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Equity Bottom-Up

<ul>
<li>In the past, we had been neutral on Indonesian banks, due to the government’s populist, market unfriendly macro-economic policies and the risk of worsening credit quality in the bank system</li>
<li>There are early indications that the government is reining in its market unfriendly policies, and, in specific cases, certain banks have delivered better-than-expected credit quality</li>
<li>We upgrade Bank Mandiri and Negara to buy recommendations, partly on the prospect of less damaging macro-economic policies but also on attractive valuations and better-than-expected credit quality and balance sheets</li>
</ul>


In the past, we had been neutral on Indonesian banks, due to the government’s populist, market unfriendly macro-economic policies and the risk of worsening credit quality in the bank system
There are early indications that the government is reining in its market unfriendly policies, and, in specific cases, certain banks have delivered better-than-expected credit quality
We upgrade Bank Mandiri and Negara to buy recommendations, partly on the prospect of less damaging macro-economic policies but also on attractive valuations and better-than-expected credit quality and balance sheets


Indonesian Banks – Much Bad News Discounted, Buy Bank Mandiri (BMRI IJ) And Bank Negara (BBNI IJ)

<ul><li>There is no denying the slowing GDP growth in Indonesia.</li><li>The currency has become more acutely weak.</li><li>Bad loans are rising for all the major banks in 1Q15.</li><li>Without being flippant about the immediate risk to earnings from credit quality and the cycle, we believe that some perspective is worthwhile.</li></ul>

There is no denying the slowing GDP growth in Indonesia.The currency has become more acutely weak.Bad loans are rising for all the major banks in 1Q15.Without being flippant about the immediate risk to earnings from credit quality and the cycle, we believe that some perspective is worthwhile.

<ul><li>Philippine banks are now taking over others in SE Asia in terms of credit growth&nbsp;as they become more comfortable with their own financials and the overall economy.</li><li>Indonesian Bank loan growth has stepped down dramatically over the past few years. This reflects cyclically less corporate demand combined with increased caution from the banks</li><li>Thai Banks now report the lowest growth. With GDP growing at 0.5% this is reflective of demand.</li></ul>

Philippine banks are now taking over others in SE Asia in terms of credit growth&nbsp;as they become more comfortable with their own financials and the overall economy.Indonesian Bank loan growth has stepped down dramatically over the past few years. This reflects cyclically less corporate demand combined with increased caution from the banksThai Banks now report the lowest growth. With GDP growing at 0.5% this is reflective of demand.

South East Asian Loan Growth  - Phillippine, Thai and Indonesian Banks Compared.

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.

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. 

Indonesia

Bank Tabungan Negara, abbreviated as BTN, is an Indonesian commercial bank primarily known as a mortgage bank, offering a range of financial products including savings, current, and fixed deposit accounts, as well as personal, business, and mortgage loans. The bank also provides Sharia-compliant banking services. It is headquartered in Jakarta, Indonesia, and was founded in 1897.

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Bank Tabungan Negara (BBTN IJ)

Indonesia - Rising Bad Loans Not as Dire as Some Make Out

For sure NPLs are up in 1Q16 for Indonesia’s banks. But we are sanguine about the outlook for these banks, which rank well on most every measure in...

Daniel Tabbush

Indonesian Banks – Much Bad News Discounted, Buy Bank Mandiri (BMRI IJ) And Bank Negara (BBNI IJ)

We upgrade Bank Mandiri and Bank Negara to buy ratings on the back of better-than-expected credit quality, attractive valuations and the government...

Victor Galliano

Indonesia Concerns in Focus

There is no denying the slowing GDP growth in Indonesia. The currency has become more acutely weak. Bad loans are rising for all the major banks...

Daniel Tabbush

South East Asian Loan Growth - Phillippine, Thai and Indonesian Banks Compared.

Philippine banks are now taking over others in SE Asia in terms of credit growth as they become more comfortable with their own financials and the...

Daniel Tabbush

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

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