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)

<ul>
<li>There are some improvements in HK domestic credit growth, but not in the key property sector, which continues to see contraction, at worsening pace</li>
<li>LDR contraction in HK is another concern, for NIM, core interest income, while China credit metrics remain a concern - not only domestic HK.</li>
<li>Singapore banks also exposed to HK and to Mainland China, it is not only HK local banks which bear this risk. Chailease from Taiwan is another good example.</li>
</ul>


There are some improvements in HK domestic credit growth, but not in the key property sector, which continues to see contraction, at worsening pace
LDR contraction in HK is another concern, for NIM, core interest income, while China credit metrics remain a concern - not only domestic HK.
Singapore banks also exposed to HK and to Mainland China, it is not only HK local banks which bear this risk. Chailease from Taiwan is another good example.


HK Banks - Credit Growth Improves, but Property Worsening. LDR Continues to Move Lower.

<ul>
<li>Dah Sing saw its Macau and China credit costs rise by 4x in 1H25 YoY</li>
<li>Headline total provision rise of 34% YoY gives a flattering view of credit metrics</li>
<li>Loan migration from benign to worse overdue loan buckets is dramatic, not visible in headlines</li>
</ul>


Dah Sing saw its Macau and China credit costs rise by 4x in 1H25 YoY
Headline total provision rise of 34% YoY gives a flattering view of credit metrics
Loan migration from benign to worse overdue loan buckets is dramatic, not visible in headlines


HK Banks - Dah Sing's Credit Costs in Macau and China Rose 4x YoY in 1H25

<ul>
<li>Real estate lending growth in Hong Kong remains weak and now at lowest growth rate in the HKMA series since early FY05</li>
<li>Deposits are overwhelming HK's banks with LDR now moving to 55% in April FY25, nearly the lowest on record from HKMA series</li>
<li>Capital flight risk on the HK currency is also more severe than in the past, at any time, with FX reserves at 1.6x , well below past levels</li>
</ul>


Real estate lending growth in Hong Kong remains weak and now at lowest growth rate in the HKMA series since early FY05
Deposits are overwhelming HK's banks with LDR now moving to 55% in April FY25, nearly the lowest on record from HKMA series
Capital flight risk on the HK currency is also more severe than in the past, at any time, with FX reserves at 1.6x , well below past levels


Hong Kong Banks - Weak Property Lending Weakens More, Aggressive LDR Fall, Expect Poor Profit

<ul>
<li>US banks' high-frequency data (HFD) released from the Fed shows the 6th week in a row of higher than 4% YoY loan growth (and highest yet at 4.43%)</li>
<li>The change in loans during the first 6 weeks of 3Q25 is +USD85bn compared with +USD1bn in the same period last year</li>
<li>C&amp;I loan growth has seen strong delta over past 52 weeks and LLR growth remains subdued, suggesting good credit metrics</li>
</ul>


US banks' high-frequency data (HFD) released from the Fed shows the 6th week in a row of higher than 4% YoY loan growth (and highest yet at 4.43%)
The change in loans during the first 6 weeks of 3Q25 is +USD85bn compared with +USD1bn in the same period last year
C&amp;I loan growth has seen strong delta over past 52 weeks and LLR growth remains subdued, suggesting good credit metrics


US Banks - At 6 Weeks into 3Q25, +USD85bn Loans, Vs +USD1bn at 6 Weeks into 2Q24

<ul>
<li>We believe that the credit metric deterioration at HSBC is not well flagged by the bank, or well understood in the market. </li>
<li>There is substantial growth in credit costs in its HK business, where this has been the most important driver of value for HSBC</li>
<li>CRE credit metrics are of concern in HK and in Mainland China, where Stage 2 loans are rising substantially, from Stage 1 loan bucket</li>
</ul>


We believe that the credit metric deterioration at HSBC is not well flagged by the bank, or well understood in the market. 
There is substantial growth in credit costs in its HK business, where this has been the most important driver of value for HSBC
CRE credit metrics are of concern in HK and in Mainland China, where Stage 2 loans are rising substantially, from Stage 1 loan bucket


HSBC - 1H25 Tables & Data, Clear Risks, Even if Not Stated in Headlines

United Kingdom

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 (STAN LN)

HK Banks - Credit Growth Improves, but Property Worsening. LDR Continues to Move Lower.

New data on LDR, shows further contraction. This is partly driven by accelerating USD deposit growth at +20.5% YoY for July.

Daniel Tabbush

HK Banks - Dah Sing's Credit Costs in Macau and China Rose 4x YoY in 1H25

Dah Sing Financial shows 4x growth YoY in its Macau and China credit costs. This is not clearly visible, or its Overdue Loan migration, in headline...

Daniel Tabbush

Hong Kong Banks - Weak Property Lending Weakens More, Aggressive LDR Fall, Expect Poor Profit

Bank of East Asia 1H25 release shows considerable worsening in CRE in Hong Kong and in Mainland China. Its credit metrics in Macau, are also...

Daniel Tabbush

US Banks - At 6 Weeks into 3Q25, +USD85bn Loans, Vs +USD1bn at 6 Weeks into 2Q24

US banks' HFD shows strong and accelerating loan growth. The change in loans during the 6 weeks into 3Q25 is $85bn vs $1bn in 3Q24. C&I is strong,...

Daniel Tabbush

HSBC - 1H25 Tables & Data, Clear Risks, Even if Not Stated in Headlines

HSBC 1H25 data release has a lot of granular data, which does not instill a huge amount of confidence in HK or CH credit metrics.

Daniel Tabbush

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