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>Banks in Asia tend have five loan categories, where the last three combined are termed non-performing (NPL).</li><li>These categories are substandard, doubtful and loss.</li><li>The first category of loans is called pass, while the second is called special mention.</li><li>It is this latter category that is of interest to us here. These loans are late, but not impaired. They are not timely with payment, but not NPL.</li><li>These loans therefore have a high propensity to roll or migrate into the NPL loan category.</li><li>This is important as for some banks these loans are high compared with total NPLs. For some banks these loans are 2x or 3x higher than NPLs!</li><li>Also NPLs require far higher provisions than pass or special mention loans, and increasingly so, as they deteriorate from one category to another.</li></ul>Full report below the fold....

Banks in Asia tend have five loan categories, where the last three combined are termed non-performing (NPL).These categories are substandard, doubtful and loss.The first category of loans is called pass, while the second is called special mention.It is this latter category that is of interest to us here. These loans are late, but not impaired. They are not timely with payment, but not NPL.These loans therefore have a high propensity to roll or migrate into the NPL loan category.This is important as for some banks these loans are high compared with total NPLs. For some banks these loans are 2x or 3x higher than NPLs!Also NPLs require far higher provisions than pass or special mention loans, and increasingly so, as they deteriorate from one category to another.Full report below the fold....

<ul><li>A likely Russian credit and currency crisis, the weakening Euro and ineptitude of BoJ &nbsp;combine to create a world of worry in markets and bank stocks in particular. The way this usually plays out is first with liquidity.&nbsp; </li><li>Banks pull credit lines from weaker banks (and weaker companies).&nbsp; </li><li>If a bank has a loan to deposit ratio (LDR) above 100%, it is often difficult to repay the redeemed credit line, as it means disposing of an asset, a loan – immediately. &nbsp; </li></ul>

A likely Russian credit and currency crisis, the weakening Euro and ineptitude of BoJ &nbsp;combine to create a world of worry in markets and bank stocks in particular. The way this usually plays out is first with liquidity.&nbsp; Banks pull credit lines from weaker banks (and weaker companies).&nbsp; If a bank has a loan to deposit ratio (LDR) above 100%, it is often difficult to repay the redeemed credit line, as it means disposing of an asset, a loan – immediately. &nbsp; 

Vietnam

JSC Bank for Foreign Trade of Vietnam is a commercial bank.  The Bank attracts deposits and offers consumer and corporate loans, and foreign exchange services, and sponsors credit cards.

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Vietcombank (VCB VN)

"Special Mention Loans" across Asia

Banks in Asia tend have five loan categories, where the last three combined are termed non-performing (NPL). These categories are substandard,...

Daniel Tabbush

Be Wary of High LDR Banks at Present

A likely Russian credit and currency crisis, the weakening Euro and ineptitude of BoJ combine to create a world of worry in markets and bank...

Daniel Tabbush

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