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 was one week of data where large US banks showed -0.1% YoY growth in commercial and industrial (C&amp;I) but the most recent week is -1.0% so more solidly negative.</li>
<li>Cash balances continue to show YoY growth at double digit, now at 18.4% suggesting limited demand, and still banks having risk-aversion.</li>
<li>Jumbo time deposit growth remains extraordinary at 118% YoY in most recent week, and this money is more expensive than other time deposits.</li>
</ul>


There was one week of data where large US banks showed -0.1% YoY growth in commercial and industrial (C&amp;I) but the most recent week is -1.0% so more solidly negative.
Cash balances continue to show YoY growth at double digit, now at 18.4% suggesting limited demand, and still banks having risk-aversion.
Jumbo time deposit growth remains extraordinary at 118% YoY in most recent week, and this money is more expensive than other time deposits.


US Banks - Weekly Balance Sheets, Negative C&I Growth, Nearly First Time This Year, Other Negatives

<ul>
<li>New weekly balance sheets for US large banks shows C&amp;I loan growth turning negative. De-risking continues with cash balances up 15.1% YoY, the fourth week of double digit growth. </li>
<li>Total loan growth is nearly negative with the most recent week's release showing further slowing to 1.11% YoY in week to18 October. </li>
<li>With all of this, US large banks are accelerating their more expensive jumbo time deposits, with growth now at 115% YoY and adding USD26bn in the week. </li>
</ul>


New weekly balance sheets for US large banks shows C&amp;I loan growth turning negative. De-risking continues with cash balances up 15.1% YoY, the fourth week of double digit growth. 
Total loan growth is nearly negative with the most recent week's release showing further slowing to 1.11% YoY in week to18 October. 
With all of this, US large banks are accelerating their more expensive jumbo time deposits, with growth now at 115% YoY and adding USD26bn in the week. 


US Banks - New Weekly Balance Sheets: C&I Loan Growth Turns Negative | Cash +15% | All Loans +1%

Equity Bottom-Up

<ul>
<li>WFC is seeing net interest income growth rate decelerate sharply from 29% YoY in 2Q23 to 8% YoY in 3Q23. Its deposit costs rose from 23bps to 192bps YoY</li>
<li>CRE NCO's rose to USD93m in 3Q23 from reversals in 3Q22. Its CRE non-accruals rose to USD3,863m in 3Q23, vs USD2,507m in 2Q23, vs USD853m in 3Q22</li>
<li>Mortgage, Auto, CRE loans are down QoQ and YoY. C&amp;I loans, its largest loan bucket are down 0.9% QoQ. Total gross loans declined USD5.5bn QoQ, now down USD13bn from peak.</li>
</ul>


WFC is seeing net interest income growth rate decelerate sharply from 29% YoY in 2Q23 to 8% YoY in 3Q23. Its deposit costs rose from 23bps to 192bps YoY
CRE NCO's rose to USD93m in 3Q23 from reversals in 3Q22. Its CRE non-accruals rose to USD3,863m in 3Q23, vs USD2,507m in 2Q23, vs USD853m in 3Q22
Mortgage, Auto, CRE loans are down QoQ and YoY. C&amp;I loans, its largest loan bucket are down 0.9% QoQ. Total gross loans declined USD5.5bn QoQ, now down USD13bn from peak.


WFC - Net Interest Income +8% YoY Vs +29% | CRE Non-Accruals +54% QoQ, +4.5x YoY | NIM -17bps in 6M

<ul>
<li>US Federal Reserve Bank balance sheets are released weekly and more current than commercial banks. Latest Fed B/S is for 4 October, shows -USD47bn WoW in loans, securities, repos.</li>
<li>Liquidity conditions in the US banking system are becoming tighter faster, with the most recent week showing loans, securities, repos at -9.4% YoY vs -8.3% four weeks ago.</li>
<li>With tighter liquidity we should expect less loan growth, but also more difficult conditions for cash-strapped companies, prompting more defaults, and higher credit costs at banks.</li>
</ul>


US Federal Reserve Bank balance sheets are released weekly and more current than commercial banks. Latest Fed B/S is for 4 October, shows -USD47bn WoW in loans, securities, repos.
Liquidity conditions in the US banking system are becoming tighter faster, with the most recent week showing loans, securities, repos at -9.4% YoY vs -8.3% four weeks ago.
With tighter liquidity we should expect less loan growth, but also more difficult conditions for cash-strapped companies, prompting more defaults, and higher credit costs at banks.


US - Fed Liquidity Moves USD147bn Lower In Past 3 Weeks, Pace Is Accelerating

<ul>
<li>US large banks' new balance sheet data for 27 September show surging cash at +USD90bn in the week putting YoY growth highest all year, at 11.6%. This is risk aversion.</li>
<li>Commercial &amp; Industrial lending, shows another subdued week, down USD1bn to 27 Sept WoW, and YoY growth at 0.36% compared with 12.5% early this year. Suggests a weak underlying economy.</li>
<li>CRE lending growth remains negative, and book value growth worsens in past 2 weeks, from +USD9.4bn to +USD4.0bn and now to +0.4bn WoW. </li>
</ul>


US large banks' new balance sheet data for 27 September show surging cash at +USD90bn in the week putting YoY growth highest all year, at 11.6%. This is risk aversion.
Commercial &amp; Industrial lending, shows another subdued week, down USD1bn to 27 Sept WoW, and YoY growth at 0.36% compared with 12.5% early this year. Suggests a weak underlying economy.
CRE lending growth remains negative, and book value growth worsens in past 2 weeks, from +USD9.4bn to +USD4.0bn and now to +0.4bn WoW. 


US Banks - Cash +USD90bn in Week, CRE  -0.55% YoY, C&I +0.36% YoY, Book Value Growth Dwindles 3 Wks

United States

Synchrony Financial operates as a consumer financial services company. The Company provides  a range of credit products through programs we have established with a diverse group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations and healthcare service providers.

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Synchrony Financial (SYF US)

US Banks - Weekly Balance Sheets, Negative C&I Growth, Nearly First Time This Year, Other Negatives

US large banks show -1.0% YoY growth in C&I loans in the most recent weekly release. Cash balances are still rising a lot as are jumbo time...

Daniel Tabbush

US Banks - New Weekly Balance Sheets: C&I Loan Growth Turns Negative | Cash +15% | All Loans +1%

New weekly balance sheet data gives near real-time view. C&I loans just turned negative. Cash is growing fast, total loans nearly negative. Large...

Daniel Tabbush

WFC - Net Interest Income +8% YoY Vs +29% | CRE Non-Accruals +54% QoQ, +4.5x YoY | NIM -17bps in 6M

Net interest income is slowing dramatically and could turn negative in 4Q23. NIM pressure is worsening and CRE nonaccrual loans are soaring. Most...

Daniel Tabbush

US - Fed Liquidity Moves USD147bn Lower In Past 3 Weeks, Pace Is Accelerating

Fed data shows USD147bn lower liquidity in just the past 3 weeks, and the pace is accelerating. There are negative implications for bank loan...

Daniel Tabbush

US Banks - Cash +USD90bn in Week, CRE -0.55% YoY, C&I +0.36% YoY, Book Value Growth Dwindles 3 Wks

New weekly balance sheet data shows USD90bn surge in cash assets in the most recent week. Growth YoY has never been higher this year. There are...

Daniel Tabbush

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