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>1Q23 earnings were 130% of consensus annualized, 2Q23 is 104% consensus annualized</li>
<li>USB saw its quarterly income/FY23 consensus move from 27% to 21% from 1Q23 to 2Q23</li>
<li>COLB, WAL are at lowest FY23 consensus achievement rates: 21% and 41% during 1H23</li>
</ul>


1Q23 earnings were 130% of consensus annualized, 2Q23 is 104% consensus annualized
USB saw its quarterly income/FY23 consensus move from 27% to 21% from 1Q23 to 2Q23
COLB, WAL are at lowest FY23 consensus achievement rates: 21% and 41% during 1H23


US Banks - Qtly Profit Falls As % Of FY23 Consensus, Some More Than Others: USB, PB, COL, WAL, AEX

Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Equity Bottom-Up

<ul>
<li>Credit quality risks are rising in US commercial real estate (CRE) and specifically in office property; furthermore, the prospect of increasing US Treasury bond issuance may heighten T-bond volatility</li>
<li>We screen for US banks that have strong capital ratios, that can deliver premium returns and can confront the rising credit quality challenges, especially in CRE</li>
<li>We maintain buys on M&amp;T Bank and Western Alliance, adding Capital One with its healthy capital ratios and low office exposure; we recommend profit taking on First Horizon</li>
</ul>


Credit quality risks are rising in US commercial real estate (CRE) and specifically in office property; furthermore, the prospect of increasing US Treasury bond issuance may heighten T-bond volatility
We screen for US banks that have strong capital ratios, that can deliver premium returns and can confront the rising credit quality challenges, especially in CRE
We maintain buys on M&amp;T Bank and Western Alliance, adding Capital One with its healthy capital ratios and low office exposure; we recommend profit taking on First Horizon


US Banks – A Closer Look at Office Exposure and Revisiting Capital Adequacy

<ul>
<li>US banks tightening standards for loans, as well as the downturn in loan demand, provides a silver lining for banks by reducing funding pressures as well as the increasing spreads</li>
<li>Among the regional banks, Western Alliance is seeing deposit inflows in 2Q23; more generally, the usage of the Fed’s BTFP and issuance by the FHLB seem well controlled</li>
<li>We stick with our picks M&amp;T Bank and Western Alliance, adding First Horizon to the buy list, where valuations stand out along with solid capital ratios and above average returns</li>
</ul>


US banks tightening standards for loans, as well as the downturn in loan demand, provides a silver lining for banks by reducing funding pressures as well as the increasing spreads
Among the regional banks, Western Alliance is seeing deposit inflows in 2Q23; more generally, the usage of the Fed’s BTFP and issuance by the FHLB seem well controlled
We stick with our picks M&amp;T Bank and Western Alliance, adding First Horizon to the buy list, where valuations stand out along with solid capital ratios and above average returns


US Regional Banks – Credit Spread Silver Linings to Mitigate Loan Quality and Volume Headwinds

<ul>
<li>Except US banks to move from liquidity risks to credit risks</li>
<li>Recently released US Senior Loan Officer Survey shows major tightening</li>
<li>Focus on small banks' CRE lending and credit card company net charge-offs </li>
</ul>


Except US banks to move from liquidity risks to credit risks
Recently released US Senior Loan Officer Survey shows major tightening
Focus on small banks' CRE lending and credit card company net charge-offs 


Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Last week's FOMC announcement was more hawkish than expected, and the market took the news in stride. Market dynamics have improved significantly since the announcement, which has us inching toward an outright bullish outlook; we are just waiting for price breakouts from cyclical areas including small-caps (IWM), Financials (XLF), and Energy (XOP).Charts highlighted: COP, EOG, DVN, CLR, FANG, MRO, XEC, COG, AR, MUR, USB, PNC, FITB, KEY, RF, CMA, SIVB, WAL, EWBC, ZION, PACW, UMPQ, FHB, and CATY.

Last week's FOMC announcement was more hawkish than expected, and the market took the news in stride. Market dynamics have improved significantly since the announcement, which has us inching toward an outright bullish outlook; we are just waiting for price breakouts from cyclical areas including small-caps (IWM), Financials (XLF), and Energy (XOP).Charts highlighted: COP, EOG, DVN, CLR, FANG, MRO, XEC, COG, AR, MUR, USB, PNC, FITB, KEY, RF, CMA, SIVB, WAL, EWBC, ZION, PACW, UMPQ, FHB, and CATY.

10-Yr Treasury Yield Breaking Out; Downgrading U.S. Consumer Staples and Utilities To Underweight

United States

Western Alliance Bancorp is a multi-bank holding company.  The Company provides a full range of banking and related services to businesses and consumers in Nevada, Arizona, and California.

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Western Alliance Ban (WAL US)

US Banks - Qtly Profit Falls As % Of FY23 Consensus, Some More Than Others: USB, PB, COL, WAL, AEX

US bank profit downgrades can be big, looking at FY23 consensus earnings achievement rates in 1Q23, 2Q23. Many banks are at less than 50% of FY23...

Daniel Tabbush

US Banks – A Closer Look at Office Exposure and Revisiting Capital Adequacy

We screen US banks for strong core capital ratios, premium returns and for CRE and office exposure; we keep buys on M&T Bank and Western Alliance,...

Victor Galliano

US Regional Banks – Credit Spread Silver Linings to Mitigate Loan Quality and Volume Headwinds

For US banks lower funding pressures and increasing spreads provide a silver lining against credit quality and lower volume headwinds; we like M&T...

Victor Galliano

US Banks - Liquidity to Credit

Except US banks to move from liquidity risks to credit risks, with the US Senior Loan Officer Survey pointing to major tightening.

Daniel Tabbush

10-Yr Treasury Yield Breaking Out; Downgrading U.S. Consumer Staples and Utilities To Underweight

The 10-year Treasury yield broke above the key 1.38% resistance level last week, a bullish signal for the broad equity market and also a bullish...

Vermilion Research

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