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)

For sure NPLs are up in 1Q16 for Indonesia’s banks. But we are sanguine about the outlook for these banks, which rank well on most every measure in Asia and the world. We look more closely at indebted companies unable to service loans; distribution of banks within Indonesia; and ability to absorb bad loans. Save to say, BCA, BTPN, BJBR and BMRI remain some of the more interesting banks in the region to us.<div class="content-highlight">We examine Indonesia’s non-financial companies interest coverage and debt levels. </div>An…

For sure NPLs are up in 1Q16 for Indonesia’s banks. But we are sanguine about the outlook for these banks, which rank well on most every measure in Asia and the world. We look more closely at indebted companies unable to service loans; distribution of banks within Indonesia; and ability to absorb bad loans. Save to say, BCA, BTPN, BJBR and BMRI remain some of the more interesting banks in the region to us.We examine Indonesia’s non-financial companies interest coverage and debt levels. An…

Indonesia - Rising Bad Loans Not as Dire as Some Make Out

We examine interest coverage in the corporate sector for several countries in Asia; given the broad range of interest coverage across Asia by country and by sector, simple averages are hugely misleading.What matters from the perspective of a bank analysis, is how prominently debt-laden companies feature with low levels of interest cover. This is where the analysis can be helpful in considering the outlook for NPL formation and credit costs.<div class="content-highlight"> India stands out in absolute terms, but also in the…</div>

We examine interest coverage in the corporate sector for several countries in Asia; given the broad range of interest coverage across Asia by country and by sector, simple averages are hugely misleading.What matters from the perspective of a bank analysis, is how prominently debt-laden companies feature with low levels of interest cover. This is where the analysis can be helpful in considering the outlook for NPL formation and credit costs. India stands out in absolute terms, but also in the…

Asia - Interest Coverage Data Is Dire for India, and China

It is easy to understand why there has been and remains so much hope regarding the profitability of China’s banks. The simple answer is penetration. Here we are referring to how accessible banking is to the population, and we measure this by population/bank branches. Where banking is less accessible and limited, there is less competition and a greater ability for banks to charge high prices.This should be reflected in the variance of net interest margins by country. But it is not this simple…

It is easy to understand why there has been and remains so much hope regarding the profitability of China’s banks. The simple answer is penetration. Here we are referring to how accessible banking is to the population, and we measure this by population/bank branches. Where banking is less accessible and limited, there is less competition and a greater ability for banks to charge high prices.This should be reflected in the variance of net interest margins by country. But it is not this simple…

Asia-Pacific: Branch Banking and Profitability

Equity Bottom-Up

Bank Central Asia is reporting margins at 6.50% as at year 2015, which is steadily rising over the past few years. This flies in the face of all the naysayers in the past, pontificating about the collapse in its unsustainable, high margins. The result is an ROA that remains well above most all in Asia-Pacific and Indonesia, at 3.15% for last year.Part of the bank’s improved returns are due to a greater focus on higher yield loans, with much of this captured in the financials of PT Bank BCA…

Bank Central Asia is reporting margins at 6.50% as at year 2015, which is steadily rising over the past few years. This flies in the face of all the naysayers in the past, pontificating about the collapse in its unsustainable, high margins. The result is an ROA that remains well above most all in Asia-Pacific and Indonesia, at 3.15% for last year.Part of the bank’s improved returns are due to a greater focus on higher yield loans, with much of this captured in the financials of PT Bank BCA…

Little Known Subsidiary Is Bolstering BCA's Already Strong Business

It is still difficult to digest the optimism in some commentary regarding true underlying financial health. Adding to the regime of onerous banking regulations is an environment of economic and financial fear. The decline in U.S. 10 year bond yields this year alone is testimony to this. Negative interest rates in Japan, EU, and Sweden, suggests the growth outlook is terrible.Remember when the world was waiting for rising U.S. rates and normalization of higher rates globally? This was when the world’s overly liquid banks would start to print money; earning an immediately higher spread on their excess deposits. It is not happening. It is more like the opposite now.

It is still difficult to digest the optimism in some commentary regarding true underlying financial health. Adding to the regime of onerous banking regulations is an environment of economic and financial fear. The decline in U.S. 10 year bond yields this year alone is testimony to this. Negative interest rates in Japan, EU, and Sweden, suggests the growth outlook is terrible.Remember when the world was waiting for rising U.S. rates and normalization of higher rates globally? This was when the world’s overly liquid banks would start to print money; earning an immediately higher spread on their excess deposits. It is not happening. It is more like the opposite now.

Indonesia

PT Bank Central Asia Tbk provides banking and related services.  The Bank also provides custodianship, trusteeship, and management of pension funds of financial institutions.  Through its subsidiaries, the Bank also provides leasing and consumer financing services.

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Bank Central Asia (BBCA IJ)

Indonesia - Rising Bad Loans Not as Dire as Some Make Out

For sure NPLs are up in 1Q16 for Indonesia’s banks. But we are sanguine about the outlook for these banks, which rank well on most every measure in...

Daniel Tabbush

Asia - Interest Coverage Data Is Dire for India, and China

We examine interest coverage in the corporate sector for several countries in Asia; given the broad range of interest coverage across Asia by...

Daniel Tabbush

Asia-Pacific: Branch Banking and Profitability

It is easy to understand why there has been and remains so much hope regarding the profitability of China’s banks. The simple answer is...

Daniel Tabbush

Little Known Subsidiary Is Bolstering BCA's Already Strong Business

Bank Central Asia is reporting margins at 6.50% as at year 2015, which is steadily rising over the past few years. This flies in the face of all...

Daniel Tabbush

Asian Banks – Risks Remain Plentiful

It is still difficult to digest the optimism in some commentary regarding true underlying financial health. Adding to the regime of onerous banking...

Daniel Tabbush

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