Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

National Australia Bank / Equity Bottom-Up

*AML/CTF Violations: National Australia Bank (NAB.AU) [NAB] announced that it was informed by the Australian Transaction Reports and Analysis Centre (AUSTRAC) that it had identified “potential serious and on-going non-compliance” with NAB's compliance with the Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) Act 2006, and the AML/CFT Rules 2007; and*Fundamental Challenges Too: AML/CTF is not NAB’s only challenge. NAB's 1H21 NIM declined another 3 bp HOH to 1.74%, and will remain challenged from this low rate environment, competitive pressures, and higher mortgage concentrations well into FY 2022. In addition, NAB’s loans 90+ days past due loans increased over 30% HOH due to challenges from Australian mortgage customers exiting loan deferrals.

*AML/CTF Violations: National Australia Bank (NAB.AU) [NAB] announced that it was informed by the Australian Transaction Reports and Analysis Centre (AUSTRAC) that it had identified “potential serious and on-going non-compliance” with NAB's compliance with the Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) Act 2006, and the AML/CFT Rules 2007; and*Fundamental Challenges Too: AML/CTF is not NAB’s only challenge. NAB's 1H21 NIM declined another 3 bp HOH to 1.74%, and will remain challenged from this low rate environment, competitive pressures, and higher mortgage concentrations well into FY 2022. In addition, NAB’s loans 90+ days past due loans increased over 30% HOH due to challenges from Australian mortgage customers exiting loan deferrals.

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.

Of Australia’s largest banks, there are few that reveal improving core net interest income. Macquarie is unique in this respect and further enters the current period of inflation, recovery with far higher assets.

Of Australia’s largest banks, there are few that reveal improving core net interest income. Macquarie is unique in this respect and further enters the current period of inflation, recovery with far higher assets. 

Macquarie – Don’t You Forget About Me

*Reserve Bank of Australia’s No Action On BNPL:The Reserve Bank of Australia (RBA) released a Retail Payments Review on May 28, 2021 discussing among other items the Buy Now Pay Later (BNPL) model. Specifically, the RBA reviewed whether the BNPL model should continue with its ‘no surcharge rules’ whereby merchants are precluded from passing along BNPL fees to its customers. The RBA concluded that it will not require the BNPL sector to change its ‘no surcharge rules’; and  *Tencent’s Midas Touch: Tencent continues to hit it out of the park with its Afterpay stake. In addition to its superb return on investment over the past nine months since the stake announcement - -even after giving back some of its gains, this alliance with Australia’s premier financial technology BNPL company is paying dividends to Tencent in numerous other ways.

*Reserve Bank of Australia’s No Action On BNPL:The Reserve Bank of Australia (RBA) released a Retail Payments Review on May 28, 2021 discussing among other items the Buy Now Pay Later (BNPL) model. Specifically, the RBA reviewed whether the BNPL model should continue with its ‘no surcharge rules’ whereby merchants are precluded from passing along BNPL fees to its customers. The RBA concluded that it will not require the BNPL sector to change its ‘no surcharge rules’; and  *Tencent’s Midas Touch: Tencent continues to hit it out of the park with its Afterpay stake. In addition to its superb return on investment over the past nine months since the stake announcement - -even after giving back some of its gains, this alliance with Australia’s premier financial technology BNPL company is paying dividends to Tencent in numerous other ways. 

Financials Credit Analyst

Hank Calenti, CFA

CreditContinuum

Credit

Executive Summary: Looks can be deceiving when considering performance potential in newly issued securities. While the issuance spread may be wider than peers, this is only one-half of the story. We consider the other half as it relates to <a href="https://www.smartkarma.com/entities/ubs-group-ag-e82c0d58-83f2-4e12-bcb6-976202a4e200" target="_blank" data-smartkarma-citation="entities:27909:1" rel="noopener">UBS (UBSG SW)</a> and <a href="https://www.smartkarma.com/entities/jyske-bank-a-s" target="_blank" data-smartkarma-citation="entities:22404:1" rel="noopener">Jyske Bank's (JYSK DC)</a> recently issued AT1 bonds and we ponder the potential in Oman Arab Bank’s security.

Executive Summary: Looks can be deceiving when considering performance potential in newly issued securities. While the issuance spread may be wider than peers, this is only one-half of the story. We consider the other half as it relates to UBS (UBSG SW) and Jyske Bank's (JYSK DC) recently issued AT1 bonds and we ponder the potential in Oman Arab Bank’s security.  

New Issue Machinations – Looks Can Be Deceiving

Bond market data and technology, BondEvalue

BondEvalue

Bond market data and technology

BondEvalue is a Singapore-based Fintech that specializes in bond market data and technology. The company's information services business offers bond market data on hard-currency corporate & sovereign bonds across Asia, Middle East, Europe and the Americas. The data, which includes bond prices, yields, news and analytics, is offered to end investors via interactive Mobile and Web Apps. Investors can sign up for a free trial of the service either via the company's website (https://bondevalue.com) or by downloading the BondEvalue Mobile App (http://onelink.to/wej7jq). BondEvalue is also developing an electronic bond exchange, BondbloX in Singapore that allows investors to trade bonds electronically in smaller sizes (US$1,000 or equivalent). For more information, visit https://www.bondblox.com/

Bond Market Data and Technology

US markets ended higher with the S&amp;P up 1% while the tech heavy Nasdaq up by 1.4%. Tesla closed higher by 4.4%, Microsoft was up 2.3%, while Apple and Amazon were up 1.3%. US 10Y Treasury yields dipped slightly to end at 1.61%. European Indices also closed higher by ~0.4% – FTSE was up 0.5%, while DAX and CAC closed higher by 0.4%. US IG CDS spreads were 1.1bp tighter and HY spreads were 3.2bp tighter. EU main spreads were 0.8bp tighter and crossover spreads were 4.7bp tighter. Asian equities have followed the track of the US equities with initial gains of ~1%. Asia ex-Japan CDS spreads tightened 1.9bp. Asian primary markets are busy ahead of the Vesak day holiday in Singapore on Wednesday.

10 New Deals Including Abu Dhabi, Westpac, OUE; Macro; New Issues; Rating Changes; Talking Heads;...

Australia

Westpac Banking Corporation offers general and savings banking services.  The Company provides investment portfolio management and advice, insurance services,  consumer finance, and money market services among other services.  Westpac Banking Corp. serves individuals, businesses, and corporations worldwide.

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Westpac Banking (WBC AU)

National Australia Bank - Nabbed

NATIONAL AUSTRALIA BANK: NAB was informed by AUSTRAC that it had identified “potential serious and on-going non-compliance” with NAB's compliance...

Thomas J. Monaco

Macquarie – Don’t You Forget About Me

There are few banks that reveal improving core net interest income. Macquarie is unique in this respect and further enters the current period of...

Daniel Tabbush

Tencent Holdings – Shot, Score!!

TENCENT HOLDINGS: The RBA released a Retail Payments Review discussing among other items the BNPL model. The RBA concluded that it will not require...

Thomas J. Monaco

New Issue Machinations – Looks Can Be Deceiving

Looks can be deceiving in newly issued securities. We look behind the headline numbers to assess AT1 performance potential.

Hank Calenti, CFA

10 New Deals Including Abu Dhabi, Westpac, OUE; Macro; New Issues; Rating Changes; Talking Heads;...

US markets ended higher with the S&P up 1% while the tech heavy Nasdaq up by 1.4%. Tesla closed higher by 4.4%, Microsoft was up 2.3%, while...

BondEvalue

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