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>US large banks are showing sharply expanding loans in recent weeks, in granular HFD</li>
<li>This comes as their higher cost Jumbo Time Deposits are now showing negative growth</li>
<li>There are positive implications for net interest income, NIM and net profit delta of large US banks</li>
</ul>


US large banks are showing sharply expanding loans in recent weeks, in granular HFD
This comes as their higher cost Jumbo Time Deposits are now showing negative growth
There are positive implications for net interest income, NIM and net profit delta of large US banks


US Banks - HFD Shows Sharply Expanding Loans, with Newly Negative Growth in Jumbo Time Deposits

<ul>
<li>Weekly HFD for large US banks are turning positive in several areas, making the mosaic even stronger than if just as single series were improving</li>
<li>Loan growth for the largest US banks is now positive even if low, but moving from a negative rate of growth, the trajectory is a steady improvement</li>
<li>Loan loss reserves growth is lowering, suggesting bettering LGD and PD while large time deposit growth is down substantially, improving liquidity risk (which can impact credit)</li>
</ul>


Weekly HFD for large US banks are turning positive in several areas, making the mosaic even stronger than if just as single series were improving
Loan growth for the largest US banks is now positive even if low, but moving from a negative rate of growth, the trajectory is a steady improvement
Loan loss reserves growth is lowering, suggesting bettering LGD and PD while large time deposit growth is down substantially, improving liquidity risk (which can impact credit)


US Banks - Strong Weekly Balance Sheet Figures for Loans, Loan Loss Reserves and Time Deposits

<ul>
<li>While maybe deflation may not be a concern right now, we believe that high real rates will be a consideration of the Fed</li>
<li>With average lending rates at 8.5% in August and the All Urban CPI Index recording 2.5% inflation in the August, real lending rates are high at 5.97%</li>
<li>When figures were similar, it was July/August 2007 - rarely has there been a time in recent years, where real loan rates have been so high, without Fed reaction</li>
</ul>


While maybe deflation may not be a concern right now, we believe that high real rates will be a consideration of the Fed
With average lending rates at 8.5% in August and the All Urban CPI Index recording 2.5% inflation in the August, real lending rates are high at 5.97%
When figures were similar, it was July/August 2007 - rarely has there been a time in recent years, where real loan rates have been so high, without Fed reaction


Fed Rate Cut - Real Lending Rates at 5.97% Near Where Peaking In August 2007

<ul>
<li>The Fed's Michael Barr has proposed recommendations to adjust Basel III rules, calculations on 11 September, so this is very new</li>
<li>JPM, CITI, BAC, GS, MS, WFC, SST, are G-SIBs in the US in order of 'importance to system' so that JPM is ranked as first and State Street the lowest</li>
<li>Of these banks, only WFC has seen its loans contract over the past two and a half years, which can mean it is marginally better prepared</li>
</ul>


The Fed's Michael Barr has proposed recommendations to adjust Basel III rules, calculations on 11 September, so this is very new
JPM, CITI, BAC, GS, MS, WFC, SST, are G-SIBs in the US in order of 'importance to system' so that JPM is ranked as first and State Street the lowest
Of these banks, only WFC has seen its loans contract over the past two and a half years, which can mean it is marginally better prepared


US Banks and New Capital Rules - GSIBs 9% More Capital, Can Impact Lending, WFC Stands Out Best

<ul>
<li>High frequency data in the US for mortgage loan applications and mortgage loan volume is improving, not suggestive of recession</li>
<li>Total domestic credit growth in the US is accelerating in recent months, and this can continue given the HFD on mortgages</li>
<li>Credit metrics can remain a concern, especially in CRE and card lending, despite the improved delta in mortgage lending and total lending</li>
</ul>


High frequency data in the US for mortgage loan applications and mortgage loan volume is improving, not suggestive of recession
Total domestic credit growth in the US is accelerating in recent months, and this can continue given the HFD on mortgages
Credit metrics can remain a concern, especially in CRE and card lending, despite the improved delta in mortgage lending and total lending


US Banks & Economy - HFD Mortgage Data Shows Weekly Improvements, Credit Growth Improving in US

United States

U.S. Bancorp is a diversified financial services company that provides lending and depository services, cash management, foreign exchange and trust and investment management services.  The Company also provides credit card services, mortgage banking, insurance, brokerage, and leasing.  U.S Bancorp operates in the Midwest and Western United States.

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US Bancorp (USB US)

US Banks - HFD Shows Sharply Expanding Loans, with Newly Negative Growth in Jumbo Time Deposits

US large banks show loans accelerating (but not riskier CRE loans) and with higher cost Jumbo time deposit growth now turning negative in new...

Daniel Tabbush

US Banks - Strong Weekly Balance Sheet Figures for Loans, Loan Loss Reserves and Time Deposits

The largest US banks by assets are showing HFD that is increasingly positive for loan growth, loan loss reserves growth and large time deposits...

Daniel Tabbush

Fed Rate Cut - Real Lending Rates at 5.97% Near Where Peaking In August 2007

Real rates are too high in the US and they have been rising sharply. This is likely where the the Fed will need to focus when considering rate...

Daniel Tabbush

US Banks and New Capital Rules - GSIBs 9% More Capital, Can Impact Lending, WFC Stands Out Best

New proposals on capital regulations for banks can mean more capital for the largest banks, but there are major differences between the GSIBs.

Daniel Tabbush

US Banks & Economy - HFD Mortgage Data Shows Weekly Improvements, Credit Growth Improving in US

HFD on mortgage loans is improving substantially, not suggestive of a weakening economy, impending recession. Overall loan growth is also...

Daniel Tabbush

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