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>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>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

Invest, Trade and Save in Singapore, Syfe

Syfe

Invest, Trade and Save in Singapore

Syfe is an investment platform offering Managed Portfolios, Brokerage services, and Cash Management solutions to help people build wealth for a better future.

<ul><li>Singapore's equity market is positioned to continue its resilient performance, with benchmark indices trending positively and dividend yields holding firm above historical averages.</li><li>The market's fundamental strength remains a key pillar of support; corporate balance sheets are robust, and free cash flow generation has been strong since the post-pandemic reopening.</li><li>This financial health enabled companies to increase dividend payouts in late 2024 at a faster rate than earnings growth, signaling a strong commitment to shareholder returns even as earnings momentum begins to moderate.</li></ul>

Singapore's equity market is positioned to continue its resilient performance, with benchmark indices trending positively and dividend yields holding firm above historical averages.The market's fundamental strength remains a key pillar of support; corporate balance sheets are robust, and free cash flow generation has been strong since the post-pandemic reopening.This financial health enabled companies to increase dividend payouts in late 2024 at a faster rate than earnings growth, signaling a strong commitment to shareholder returns even as earnings momentum begins to moderate.

1H 2025 Dividend Investing Update: Navigating the Yield Squeeze

<ul>
<li>New World Development is now warning of losses from impairments in HK and China</li>
<li>We have already seen this some weeks ago from China Vanke, conditions still weakening</li>
<li>Banks in Hong Kong and China face more bad loans, but also those with exposures in the regions, like HSBC, STAN and Singapore's banks</li>
</ul>


New World Development is now warning of losses from impairments in HK and China
We have already seen this some weeks ago from China Vanke, conditions still weakening
Banks in Hong Kong and China face more bad loans, but also those with exposures in the regions, like HSBC, STAN and Singapore's banks


Singapore and HK Banks - New World Impairments Are Significant, Flow Through to Banks Is Real

<ul>
<li>MAS releases quarterly granular data on Singapore banks' credit card charge-offs and the figures are rising sharply</li>
<li>It is not easily visible in banks' own interim results, so that we must use the MAS data as a window on card credit metrics</li>
<li>Credit card charge off rates are now (4Q24) 5.4% vs 4.2% YoY while the total charge-offs are now SGD110.0m in 4Q24 vs SGDm74.7m in 4Q23</li>
</ul>


MAS releases quarterly granular data on Singapore banks' credit card charge-offs and the figures are rising sharply
It is not easily visible in banks' own interim results, so that we must use the MAS data as a window on card credit metrics
Credit card charge off rates are now (4Q24) 5.4% vs 4.2% YoY while the total charge-offs are now SGD110.0m in 4Q24 vs SGDm74.7m in 4Q23


Singapore Banks - Charge off Rates on Cards Are Rising Substantially Through 4Q24

Singapore

United Overseas Bank is a leading Asian bank offering a comprehensive range of financial services across its Group Retail, Group Wholesale Banking, and Global Markets segments. Its offerings include personal, private, commercial, and corporate banking, investment banking, asset management, and insurance services. The bank is headquartered in Singapore and was founded in 1935.

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United Overseas Bank (UOB SP)

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

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

1H 2025 Dividend Investing Update: Navigating the Yield Squeeze

Singapore's equity market is positioned to continue its resilient performance, with benchmark indices trending positively and dividend yields...

Syfe

Singapore and HK Banks - New World Impairments Are Significant, Flow Through to Banks Is Real

This is relevant to new insight on HK banks with worsening HFD for LDR and real estate lending growth now at most negative rates in the HKMA...

Daniel Tabbush

Singapore Banks - Charge off Rates on Cards Are Rising Substantially Through 4Q24

MAS data shows consistently rising charge-offs and charge-off rates for credit cards in Singapore. Some may be normalization, but not likely all of...

Daniel Tabbush

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