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

* Capital Hole Has Been Dug: Punjab National Bank (PNB.IN) is in desperate need of a INR 550 bn capital infusion post the Nirav Modi fraud; this amounts to 134% of stated equity, in our view.* No Credible Plan in Place: Despite knowing of this fraud for several months, PNB nor the government would appear to have any form of credible bailout plan in place. On top of the interest reversals associated from this fraud, we find that the bank is seeing additional pressures on funding costs while…

* Capital Hole Has Been Dug: Punjab National Bank (PNB.IN) is in desperate need of a INR 550 bn capital infusion post the Nirav Modi fraud; this amounts to 134% of stated equity, in our view.* No Credible Plan in Place: Despite knowing of this fraud for several months, PNB nor the government would appear to have any form of credible bailout plan in place. On top of the interest reversals associated from this fraud, we find that the bank is seeing additional pressures on funding costs while…

Punjab National Bank – That Sinking Feeling

Thematic (Sector/Industry)

*Out of Control Credit Risk: High yield credit risk is out of control at 5% of global GDP just as credit metrics at the top of the market are exhibiting vulnerabilities.*Other Credit Challenges Ahead: Areas such as student lending, sub-prime auto, credit cards, Alt-A /home equity loans, securities-based lending , commercial MBS, and non-financial debt also pose global financial sector vulnerabilities.<h2>Investment Summary</h2>American bank CEOs argue that the leverage lending market is healthy due to…

*Out of Control Credit Risk: High yield credit risk is out of control at 5% of global GDP just as credit metrics at the top of the market are exhibiting vulnerabilities.*Other Credit Challenges Ahead: Areas such as student lending, sub-prime auto, credit cards, Alt-A /home equity loans, securities-based lending , commercial MBS, and non-financial debt also pose global financial sector vulnerabilities.Investment SummaryAmerican bank CEOs argue that the leverage lending market is healthy due to…

Systemic Leverage Risk Has Returned In Full Force

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.

Generally, it is Asean banks where net interest margins (NIM) have seen the best change over the past two years. And for many, this continues in 1Q18. What makes this reality more powerful is that their absolute NIM levels are also the highest in the region. Vietnam, Thailand and Indonesia, all top the list for better margins over the past two years at +22bps to +33bps. It is notable that Indonesia features here, as most will recall the hysteria that comes almost annually from analysts in…

Generally, it is Asean banks where net interest margins (NIM) have seen the best change over the past two years. And for many, this continues in 1Q18. What makes this reality more powerful is that their absolute NIM levels are also the highest in the region. Vietnam, Thailand and Indonesia, all top the list for better margins over the past two years at +22bps to +33bps. It is notable that Indonesia features here, as most will recall the hysteria that comes almost annually from analysts in…

Asian Banks – Margin Disparity Favors Asean

* Unchallenged 1Q18 Result: The Group posted a weak 1Q18 result, to which no analysts really challenged.* No Subsidiary Discussion Was Had: HSBC NA still remains a massive earnings drag to overall Group profitability - chronically being unable to break-even on an operating basis.* Time to Dispose of This Mess: HSBC NA franchise remains plagued by the legacy Household International (acquired 2003) fiasco. After disposing of its higher yielding assets, HSBC NA cannot earn money at this subsidiary…

* Unchallenged 1Q18 Result: The Group posted a weak 1Q18 result, to which no analysts really challenged.* No Subsidiary Discussion Was Had: HSBC NA still remains a massive earnings drag to overall Group profitability - chronically being unable to break-even on an operating basis.* Time to Dispose of This Mess: HSBC NA franchise remains plagued by the legacy Household International (acquired 2003) fiasco. After disposing of its higher yielding assets, HSBC NA cannot earn money at this subsidiary…

HSBC Holdings Plc – Full of Buffalo-Ney

* Weak Result: Standard Chartered plc (2888.HK/STAN.LN) reported weak underlying results despite unreasonably lowering loan loss provisions – as underlying revenues came up short.* Under-Provided For: With reserves at 57% of problem loans, Standard Chartered has among the lowest coverage of the major Asian banks – and the USD 4 bn reserve shortfall (nearly a year’s worth of bottom-line).* Regulatory Charges:  We believe that Standard Chartered’s regulatory investigation could lead to a material…

* Weak Result: Standard Chartered plc (2888.HK/STAN.LN) reported weak underlying results despite unreasonably lowering loan loss provisions – as underlying revenues came up short.* Under-Provided For: With reserves at 57% of problem loans, Standard Chartered has among the lowest coverage of the major Asian banks – and the USD 4 bn reserve shortfall (nearly a year’s worth of bottom-line).* Regulatory Charges:  We believe that Standard Chartered’s regulatory investigation could lead to a material…

Standard Chartered Plc – Turnaround Looks to Be Longer Than Expected

Hong Kong

Standard Chartered plc is an international banking group operating principally in Asia, Africa, and the Middle East.  The Company offers its products and services in the personal, consumer, corporate, institutional and treasury areas.

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Standard Chartered (2888 HK)

Punjab National Bank – That Sinking Feeling

* Capital Hole Has Been Dug: Punjab National Bank (PNB.IN) is in desperate need of a INR 550 bn capital infusion post the Nirav Modi fraud; this...

Thomas J. Monaco

Systemic Leverage Risk Has Returned In Full Force

*Out of Control Credit Risk: High yield credit risk is out of control at 5% of global GDP just as credit metrics at the top of the market are...

Thomas J. Monaco

Asian Banks – Margin Disparity Favors Asean

Generally, it is Asean banks where net interest margins (NIM) have seen the best change over the past two years. And for many, this continues in...

Daniel Tabbush

HSBC Holdings Plc – Full of Buffalo-Ney

* Unchallenged 1Q18 Result: The Group posted a weak 1Q18 result, to which no analysts really challenged.* No Subsidiary Discussion Was Had: HSBC NA...

Thomas J. Monaco

Standard Chartered Plc – Turnaround Looks to Be Longer Than Expected

* Weak Result: Standard Chartered plc (2888.HK/STAN.LN) reported weak underlying results despite unreasonably lowering loan loss provisions – as...

Thomas J. Monaco

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