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>CMA shows how the profile of net interest income can weaken considerably with rising funding costs and risk aversion</li>
<li>Criticized assets are rising substantially and even so, the bank has not taken a higher provision expense in the quarter - this can be yet to come</li>
<li>CRE loans are growing faster than other loan, at a time when <a href="https://www.smartkarma.com/entities/new-york-community-bancorp" target="_blank" data-smartkarma-citation="entities:1193:1" rel="noopener">New York Community Bank (NYCB US)</a> shows the current risks on these loans</li>
</ul>


CMA shows how the profile of net interest income can weaken considerably with rising funding costs and risk aversion
Criticized assets are rising substantially and even so, the bank has not taken a higher provision expense in the quarter - this can be yet to come
CRE loans are growing faster than other loan, at a time when New York Community Bank (NYCB US) shows the current risks on these loans


CMA - Net Interest Income -21% with Criticized Assets +53% and CRE Loans Rising 32% YoY

<ul>
<li>US banks show flat lining loan growth, and continued very high growth in Jumbo time deposits, borrowings. Total deposits though, remain in contraction. </li>
<li>With the liability shift away from checking accounts, loan growth at near zero YoY will not help net interest income growth. Most recent two weeks' data, loans declined USD58bn.</li>
<li>Our sample of 36 US banks shows net interest income has just turned negative in 4Q23, and its pace of decline should worsen considerably, in coming quarters. </li>
</ul>


US banks show flat lining loan growth, and continued very high growth in Jumbo time deposits, borrowings. Total deposits though, remain in contraction. 
With the liability shift away from checking accounts, loan growth at near zero YoY will not help net interest income growth. Most recent two weeks' data, loans declined USD58bn.
Our sample of 36 US banks shows net interest income has just turned negative in 4Q23, and its pace of decline should worsen considerably, in coming quarters. 


US Banks - Flat Line Loans, High Growth Higher Cost Funding, Net Interest Income Growth Is Negative

<ul>
<li>For US banks outside the largest 100, credit card charge off rates are soaring now at 8.5% compared with a total charge off rate of 0.25%</li>
<li>Often smaller finance companies or non-traditional banks can see deterioration that hits the mainstream later, like in Thailand in 1997, and  like with HSBC Finance, Countrywide, Indymac in the past.</li>
<li>Ally Financial has already revealed a renewed surge of credit costs in 3Q23, defying the decline in the preceding two quarters. Maybe COF and others will show this too?</li>
</ul>


For US banks outside the largest 100, credit card charge off rates are soaring now at 8.5% compared with a total charge off rate of 0.25%
Often smaller finance companies or non-traditional banks can see deterioration that hits the mainstream later, like in Thailand in 1997, and  like with HSBC Finance, Countrywide, Indymac in the past.
Ally Financial has already revealed a renewed surge of credit costs in 3Q23, defying the decline in the preceding two quarters. Maybe COF and others will show this too?


US Banks - Credit Card Charge-Offs Soaring to 8.5%, Can Catch Some Off Guard with Focus on CRE, C&I

<ul>
<li>New data for US PMI shows a continued weak economy, which is not positive for bank lending prospects or for loan pricing. It is also not positive for credit metrics. </li>
<li>New weekly data for large US banks show risk aversion remains, with rising cash, but also dismal growth in loans at only 0.5% YoY in the most recent week. </li>
<li>Large time deposits continue to rise substantially at +110% YoY in most recent week, with cash rising too - the outlook for core net interest income is worsening.</li>
</ul>


New data for US PMI shows a continued weak economy, which is not positive for bank lending prospects or for loan pricing. It is also not positive for credit metrics. 
New weekly data for large US banks show risk aversion remains, with rising cash, but also dismal growth in loans at only 0.5% YoY in the most recent week. 
Large time deposits continue to rise substantially at +110% YoY in most recent week, with cash rising too - the outlook for core net interest income is worsening.


US Banks - Weekly Balance Sheets Show Risk Aversion Remains, New PMI Data Continues to Be Weak

<ul>
<li>There was one week of data where large US banks showed -0.1% YoY growth in commercial and industrial (C&amp;I) but the most recent week is -1.0% so more solidly negative.</li>
<li>Cash balances continue to show YoY growth at double digit, now at 18.4% suggesting limited demand, and still banks having risk-aversion.</li>
<li>Jumbo time deposit growth remains extraordinary at 118% YoY in most recent week, and this money is more expensive than other time deposits.</li>
</ul>


There was one week of data where large US banks showed -0.1% YoY growth in commercial and industrial (C&amp;I) but the most recent week is -1.0% so more solidly negative.
Cash balances continue to show YoY growth at double digit, now at 18.4% suggesting limited demand, and still banks having risk-aversion.
Jumbo time deposit growth remains extraordinary at 118% YoY in most recent week, and this money is more expensive than other time deposits.


US Banks - Weekly Balance Sheets, Negative C&I Growth, Nearly First Time This Year, Other Negatives

United States

Ally Financial Inc. is a automotive financial services company powered by a direct banking franchise. The Company operates as a financial holding company.

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Ally Financial (ALLY US)

CMA - Net Interest Income -21% with Criticized Assets +53% and CRE Loans Rising 32% YoY

CMA is showing some worrying figures in the wake of NYCB disclosures. CMA's net interest income is in sharp contraction, CRE loans rising fast and...

Daniel Tabbush

US Banks - Flat Line Loans, High Growth Higher Cost Funding, Net Interest Income Growth Is Negative

Weekly balance sheet data for large US banks shows liabilities shift toward higher cost funding continues, with loan growth remaining week, losing...

Daniel Tabbush

US Banks - Credit Card Charge-Offs Soaring to 8.5%, Can Catch Some Off Guard with Focus on CRE, C&I

Credit card charge off rates are now at 8.5% for US banks outside the largest 100, they are incredibly high, and we may expect spillover to...

Daniel Tabbush

US Banks - Weekly Balance Sheets Show Risk Aversion Remains, New PMI Data Continues to Be Weak

New high frequency data on US large banks show weekly loan growth remains weak, large time deposit growth is high, and cash is rising. New PMI data...

Daniel Tabbush

US Banks - Weekly Balance Sheets, Negative C&I Growth, Nearly First Time This Year, Other Negatives

US large banks show -1.0% YoY growth in C&I loans in the most recent weekly release. Cash balances are still rising a lot as are jumbo time...

Daniel Tabbush

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