Tabbush Report

Name: Tabbush Report
Address: Bangkok, TH
Telephone: +6626622097

We offer Asia-Pacific bank research and consultancy services under the banner of Tabbush Report.

Tabbush Report is Asian bank research & consulting, without the noise. Daniel Tabbush has more than 20 years experience in analyzing Asian banks, and has received numerous accolades over the years. These include top rankings by Bloomberg and investor magazines, The Asset and AsiaMoney. Our focus includes banks in the Asia-Pacific region, including HSBC, Standard Chartered, Australian and Japanese

banks, but also global banking and regulatory issues. We have clients across Asia, in Hong Kong, Singapore, Thailand, China and also the UK. For many years, Daniel was Head of Asian Banks at the top ranked broker in Asia, CLSA, overseeing 10 analysts and coverage of 80 banks. He has an information-sharing agreement with one of Asia’s more distinguished economists, Dr Jim Walker of Asianomics. Daniel has been a guest speaker on Asian banks at the Independent Research Summit in Hong Kong in years 2013 and 2014. Tabbush sits on the Economic Leadership Council (ELC) of University of California, San Diego, supporting their Rising Leaders program and providing general guidance. He authored Quit & Run about his life as a bank equity analyst, what life is really like in the high-paced world of stock broking, and why he left the industry to do what he loves in a healthier way. Daniel grew up in Los Angeles, graduated from UCSD with a BA in Economics, with cm luade and Phi Beta Kappa honors.

15/07/2018

Consumer finance companies in the US are showing worsening credit metrics. This is usually how it begins. For money centre banks, this is more visible in consumer loan portfolios. Charge-off data does not suggest a robust economy; rising rates, energy prices will only make this worse. The Senior Loan Officer Survey points to less strong credit demand, and the US yield curve continues to flatten. Rising rates due to policy - not demand - are creating clear consumer loan stresses, that will only worsen. Photos: Pinterest

03/04/2018

While NPL ratios in China may appear flat, there is considerable deterioration. This is evident with far higher Loss NPLs and Doubtful NPLs, which are the two worst categories of bad loans. At the same time, the high level of Special Mention loans at nearly 10x Loss NPLs, means there remains continued risk of NPL migration. Credit costs will remain high. Credit conditions are not as benign as headline figures suggest. Photos: Pinterest. Contact: [email protected]

07/02/2018

It is a stark reminder of the impact of regulatory burden, litigation and non-credit related risk facing large banks globally. Australia's CBA revealed a staggering 31% rise in its risk-weighted assets related to interest rate risk in the half. Rising rates can cause unintended consequences. Its operational risk weighted assets rose 22% in the period, also a high figure in any context. It is not only banking behemoth, HSBC that faces this pressure on returns. Add to this, implementation of IFRS 9 this year and the outlook worsens further. Photos: Pinterest.

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07/01/2018

China Construction Bank will raise $9 billion in preference shares, increasing preference share capital by over 30%. Perhaps the announcement over the holidays will go unnoticed. This capital raising alone is nearly 65% higher than the amount raised for all China banks during 2017. It is telling, especially where credit growth is faltering and with superficially high capital ratios. Corporate malaise remains well intrenched, as indicated by debt/ebidta and interest coverage. Overdue loan growth, a driver of bad loans, was high in 1H17. Tax and operating cost savings were significant during 2016 and 1H17, where 2H18, 2019 will see this less important. A granular examination of interest income on loans suggests credit quality remains far worse than headline figures. Provision costs will rise substantially, and IFRS 9 will exacerbate. Never mind the steep and curious rise in 'other assets' at China's banks. To discuss further contact us on [email protected]. Photos: Pinterest

04/12/2017

If indeed HSBC is considering buying a financial company in the US, it is of real concern. Its ability to do well with purchases is poor to say the least, Household is most obvious, CCF in France, perhaps less so. The ability for HSBC to extract real value from its sprawling global footprint is lacking but comes with high operational risk. Its subpar returns are inflated from low credit costs, but these are turning upward in its OECD regions - places where it has a significant exposure. Photos: Pinterest. Contact us: [email protected]

15/11/2017

There are positives coming out of Japan, but we need to tread carefully with banks. Upon closer examination, there is little to cheer, while to the contrary, the coming quarters are likely to see a sizeable negative delta in the numbers. Even a benign normalisation of credit costs, will be significant to profit. Contact us: [email protected]. Photos: Pinterest

01/11/2017

With over 90m people, where demographics are amongst the best in Asia, and where companies have some of the best ability to service loans, banks in Vietnam should not be overlooked. Outside of the well-known names, one stands out with some of the best returns in Asia-Pacific and with net interest margins more similar to banks of Indonesia. To discuss further contact us on [email protected]. Photos: Pinterest

05/10/2017

There remains considerable evidence of a wholesale inability to service loans at China's corporates. Look no further than debt/EBITDA multiples, and more importantly, by total debt. Debt held by companies where this ratio is greater than six times, is substantial, and still rising in 2Q17. Even if just a quarter of this were to become non-performing, stated bad loan ratios would nearly treble. Surging overdue loans and net write-offs may already be pointing to this eventuality. Photos: Pinterest.

10/09/2017

Declining interest margins at China's banks is not new, but it is telling, and accelerating. What may be more interesting is what banks' incredibly low cost/income ratio may be signalling, with negative implications for asset values and, overall risk. Still, we believe that many are under-estimating the ability for China bank income growth to continue, and in our latest Tabbush Report we discuss why. Images: Pinterest. ..
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30/07/2017

We are not convinced that all is well in US credit. Look no further than credit metrics at US consumer finance companies. Charge-offs and impairment cost growth are now at levels not seen since the Global Financial Crisis. There are important implications for US rates and HSBC Finance. By contrast, Asia's most profitable lender is in consumer finance, with strong credit metrics, and with ROA now at 4.5%. Photos: Pinterest.

26/06/2017

IFRS 9 will come into effect on 1 January 2018. The impact is doubtful to be nil. More likely, banks with limited balance sheet provisions, will need to take higher credit costs, upsetting profit. There is a wide disparity across banks in Asia-Pacific for loan loss allowances, from less than 0.5% to well over 3.0% of loans. It is critical to differentiate and understand where provision costs will adjust upward. Perhaps some can see a decline? Photos: Pinterest...
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