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.

Equity Bottom-Up

“As at 30 June 2018, the fair value of HSBC’s investment in Bank of Communications Co., Limited (‘BoCom’) had been below the carrying amount for approximately six years.” This is straight from <a href="https://www.smartkarma.com/entities/516" target="_blank" data-smartkarma-citation="entities:516:1">HSBC Holdings (5 HK)</a>'s latest disclosure. HSBC holds <a href="https://www.smartkarma.com/entities/659" target="_blank" data-smartkarma-citation="entities:659:1">Bank Of Communications Co H (3328 HK)</a> at US$17.9 billion compared with a fair value of US$10.8 billion. The difference here is shocking, at US$7.1 billion. This is yet another indication on how HSBC has long departed from its conservative roots. We…

“As at 30 June 2018, the fair value of HSBC’s investment in Bank of Communications Co., Limited (‘BoCom’) had been below the carrying amount for approximately six years.” This is straight from HSBC Holdings (5 HK)'s latest disclosure. HSBC holds Bank Of Communications Co H (3328 HK) at US$17.9 billion compared with a fair value of US$10.8 billion. The difference here is shocking, at US$7.1 billion. This is yet another indication on how HSBC has long departed from its conservative roots. We…

HSBC – $7 Billion Valuation Hole on BoCom and Other Sundry 1H18 Data

Equity Capital Markets

Bank of Jiujiang   / Equity Capital Markets

We know that banks often raise capital to boost capital adequacy. That is normal. But we also know that banks often use this as the premise, but really need IPO monies to support high impairment costs.  For China bank IPOs in recent years, it normally takes two to three years before impairment costs are higher than total IPO funds raised.  We provide data on China banks’ IPOs since year 2010 with IPO funds raised in USD million. Together with data that follows on total impairment costs, also in…

We know that banks often raise capital to boost capital adequacy. That is normal. But we also know that banks often use this as the premise, but really need IPO monies to support high impairment costs.  For China bank IPOs in recent years, it normally takes two to three years before impairment costs are higher than total IPO funds raised.  We provide data on China banks’ IPOs since year 2010 with IPO funds raised in USD million. Together with data that follows on total impairment costs, also in…

China Banks – After IPO, It Takes 2-3 Years for Impairments to Surpass Funds Raised

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

Thematic (Sector/Industry)

* Increased NPL Recognition - Not Exactly Comforting; and * Lowered Reserve Coverage Each Invoke Capital Forebearance. <h2>Investment Summary</h2>Seemingly, nonperforming loan (NPL) recognition at the mainland Chinese banks is likely tighten as ALL loans 90 days past due loans or more are required to be downgraded to NPL status by end 1H18 for the larger and larger 2nd Tier banks. Isn't that a giant kick in the pants? So, after all of these years, who knew that the mainland Chinese banks were…

* Increased NPL Recognition - Not Exactly Comforting; and * Lowered Reserve Coverage Each Invoke Capital Forebearance. Investment SummarySeemingly, nonperforming loan (NPL) recognition at the mainland Chinese banks is likely tighten as ALL loans 90 days past due loans or more are required to be downgraded to NPL status by end 1H18 for the larger and larger 2nd Tier banks. Isn't that a giant kick in the pants? So, after all of these years, who knew that the mainland Chinese banks were…

It is hard to envisage a positive reading of the abysmal 6.1% YoY fixed asset investment growth in China for May 2018 year-to-date. Headlines and commentators have urged that a recovery in China is underway for some time. If this were so, fixed asset investment growth would not likely be on a downward trend for so long, while now reaching the lowest point in our time series that spans 23 years.  Perhaps as interesting, is that the average rate of growth of all the YTD periods is 20.0%. Retail…

It is hard to envisage a positive reading of the abysmal 6.1% YoY fixed asset investment growth in China for May 2018 year-to-date. Headlines and commentators have urged that a recovery in China is underway for some time. If this were so, fixed asset investment growth would not likely be on a downward trend for so long, while now reaching the lowest point in our time series that spans 23 years.  Perhaps as interesting, is that the average rate of growth of all the YTD periods is 20.0%. Retail…

China Banks – Worsening Macro Will See Higher Bad Loans

* Risk Increasing Within Tier 2 Banks:  The 2nd tier banks is looking increasingly vulnerable. Tighter asset management regulations are being implemented in March 2018 which should force the sector to abandon their high level of illiquid assets and promote “real” NAV-type products. This risk has now morphed into a size where confidence in the financial system could erode quickly. * Watch Your Insurers: Mainland Chinese insurers have 50%-60% of their investment portfolios exposed to the weakest…

* Risk Increasing Within Tier 2 Banks:  The 2nd tier banks is looking increasingly vulnerable. Tighter asset management regulations are being implemented in March 2018 which should force the sector to abandon their high level of illiquid assets and promote “real” NAV-type products. This risk has now morphed into a size where confidence in the financial system could erode quickly. * Watch Your Insurers: Mainland Chinese insurers have 50%-60% of their investment portfolios exposed to the weakest…

China Financials – The Accident About to Happen

China

Bank of Communications Co. Ltd. provides a full range of commercial banking services including RMB and foreign currency deposit, loan, international and domestic settlement, discount, currency trading, letter of credit, bank guarantee, and other related services.

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Bank Of Communications Co H (3328 HK)

HSBC – $7 Billion Valuation Hole on BoCom and Other Sundry 1H18 Data

“As at 30 June 2018, the fair value of HSBC’s investment in Bank of Communications Co., Limited (‘BoCom’) had been below the carrying amount for...

Daniel Tabbush

China Banks – After IPO, It Takes 2-3 Years for Impairments to Surpass Funds Raised

We know that banks often raise capital to boost capital adequacy. That is normal. But we also know that banks often use this as the premise, but...

Daniel Tabbush

China Banks - Back to the Land of Silly

* Increased NPL Recognition - Not Exactly Comforting; and * Lowered Reserve Coverage Each Invoke Capital Forebearance. Investment SummarySeemingly,...

Thomas J. Monaco

China Banks – Worsening Macro Will See Higher Bad Loans

It is hard to envisage a positive reading of the abysmal 6.1% YoY fixed asset investment growth in China for May 2018 year-to-date. Headlines and...

Daniel Tabbush

China Financials – The Accident About to Happen

* Risk Increasing Within Tier 2 Banks: The 2nd tier banks is looking increasingly vulnerable. Tighter asset management regulations are being...

Thomas J. Monaco

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