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>We look at which Japan banks have the most cash which can see a major boost to returns. </li>
<li>Banks with lower margins can see a higher net interest income pick up from rising rates. </li>
<li>Loan growth in Japan has been relatively strong, supportive of rising rates from BOJ.</li>
</ul>


We look at which Japan banks have the most cash which can see a major boost to returns. 
Banks with lower margins can see a higher net interest income pick up from rising rates. 
Loan growth in Japan has been relatively strong, supportive of rising rates from BOJ.


Japan - Rising Rates: Focus On Banks With High Cash And Low Margins

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

Juroku Financial Group / Equity Bottom-Up

<ul>
<li>We update twelve Japanese regional banks, and add two new names, to target beneficiaries of the improving interest rate outlook; also banks with attractive credit quality, capital adequacy and valuations</li>
<li>We identify the value of equity holdings for disposal among these banks; the lack of near-term easing prospects at the US Fed should support JGB yields and domestic bank valuations</li>
<li>We add smaller cap Juroku Financial to our buy list of Tokyo Kiraboshi Financial, Gunma Bank and higher risk option Suruga Bank</li>
</ul>


We update twelve Japanese regional banks, and add two new names, to target beneficiaries of the improving interest rate outlook; also banks with attractive credit quality, capital adequacy and valuations
We identify the value of equity holdings for disposal among these banks; the lack of near-term easing prospects at the US Fed should support JGB yields and domestic bank valuations
We add smaller cap Juroku Financial to our buy list of Tokyo Kiraboshi Financial, Gunma Bank and higher risk option Suruga Bank


Japanese Regional Banks – Adding a Smaller Cap to Our Key Positive Picks

<ul>
<li>
<a href="https://www.smartkarma.com/entities/japan-post-bank-co-ltd" target="_blank" data-smartkarma-citation="entities:838:1" rel="noopener">Japan Post Bank (7182 JP)</a> saw its net profit surge from non-recurring gains, which was from the sale of stocks.  </li>
<li>The company's cost of funds worsened more than the improvement in its yields, and we believe this remains an issue related to hedging costs. </li>
<li>Unrealized gains on foreign bonds remains significantly higher now than a year ago and this may again be the driver for earnings, but still with very low ROA. </li>
</ul>



Japan Post Bank (7182 JP) saw its net profit surge from non-recurring gains, which was from the sale of stocks.  
The company's cost of funds worsened more than the improvement in its yields, and we believe this remains an issue related to hedging costs. 
Unrealized gains on foreign bonds remains significantly higher now than a year ago and this may again be the driver for earnings, but still with very low ROA. 


Japan Post Bank - It's like a Closed End Mutual Fund More Than Ever

<ul>
<li>Of the nearly 200 financials in Japan, on average shares outstanding are up 3% over the past several years </li>
<li>Japan Post Insurance, Japan Post Holdings, and Yamaguchi Financial are at the extreme opposite end with shares outstanding at -22%</li>
<li>MS&amp;AD features well ranking #11 of financials in our sample, with shares outstanding at -7%, adding well to its commitment on dividends, cross-shareholdings sales</li>
</ul>


Of the nearly 200 financials in Japan, on average shares outstanding are up 3% over the past several years 
Japan Post Insurance, Japan Post Holdings, and Yamaguchi Financial are at the extreme opposite end with shares outstanding at -22%
MS&amp;AD features well ranking #11 of financials in our sample, with shares outstanding at -7%, adding well to its commitment on dividends, cross-shareholdings sales


Japan Financials - Buybacks Strongest at Japan Post Insurance, Japan Post Holdings, Yamaguchi

<ul>
<li>Chiba Bank shows good gains in net interest income through 1H25 YoY </li>
<li>There should be more of this with rising BOJ rates during 2H25.</li>
<li>Flow through to net profit can be strong, given credit metrics.</li>
</ul>


Chiba Bank shows good gains in net interest income through 1H25 YoY 
There should be more of this with rising BOJ rates during 2H25.
Flow through to net profit can be strong, given credit metrics.


Chiba Bank - Net Interest Income Up, Expect More with BOJ Hike, Credit Metrics Allow Flow Through

Japan

The 77 Bank, Ltd. is a regional bank in Tohoku area.  The Bank provides general banking services including deposits, loans, and exchange transactions. The Bank also provides others financial services such as securities brokerage, trust banking, letter of credit, leasing, credit cards, and computer services.

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77 Bank Ltd/The (8341 JP)

Japan - Rising Rates: Focus On Banks With High Cash And Low Margins

BOJ to meet 23-24 Jan and likely to raise rates possibly by doubling short-term rates, from 0.25% to 0.50%. There are important implications for...

Daniel Tabbush

Japanese Regional Banks – Adding a Smaller Cap to Our Key Positive Picks

Aside from the usual metrics, we add regional banks' cross-shareholdings as a share of market cap; smaller cap Juroku Financial added to buy list...

Victor Galliano

Japan Post Bank - It's like a Closed End Mutual Fund More Than Ever

Japan Post Bank is more than ever like a closed-end mutual fund, which is hardly seeing any line items drive profit upward other than stock sales,...

Daniel Tabbush

Japan Financials - Buybacks Strongest at Japan Post Insurance, Japan Post Holdings, Yamaguchi

Japan Post Bank in spotlight now, and new data shows improving credit growth and demand, from Tankan Survey and from loan officer survey.

Daniel Tabbush

Chiba Bank - Net Interest Income Up, Expect More with BOJ Hike, Credit Metrics Allow Flow Through

Chiba Bank already showing good net interest income gains, and more is likely with rate hike from BOJ, credit metrics appear strong, so better core...

Daniel Tabbush

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Japan - Rising Rates: Focus On Banks With High Cash And Low Margins

BOJ to meet 23-24 Jan and likely to raise rates possibly by doubling short-term rates, from 0.25% to 0.50%. There are important implications for...

Daniel Tabbush

Japanese Regional Banks – Adding a Smaller Cap to Our Key Positive Picks

​Aside from the usual metrics, we add regional banks' cross-shareholdings as a share of market cap; smaller cap Juroku Financial added to buy list...

Victor Galliano

Japan Post Bank - It's like a Closed End Mutual Fund More Than Ever

Japan Post Bank is more than ever like a closed-end mutual fund, which is hardly seeing any line items drive profit upward other than stock sales,...

Daniel Tabbush

Japan Financials - Buybacks Strongest at Japan Post Insurance, Japan Post Holdings, Yamaguchi

Japan Post Bank in spotlight now, and new data shows improving credit growth and demand, from Tankan Survey and from loan officer survey.

Daniel Tabbush

Chiba Bank - Net Interest Income Up, Expect More with BOJ Hike, Credit Metrics Allow Flow Through

Chiba Bank already showing good net interest income gains, and more is likely with rate hike from BOJ, credit metrics appear strong, so better core...

Daniel Tabbush

Aside from the usual metrics, we add regional banks' cross-shareholdings as a share of market cap; smaller cap Juroku Financial added to buy list...