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

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>Since early November 2023 we have laid out our bullish expectations for a year-end rally that we anticipated would continue into the early part of 2024. </li>
<li>Here we are in the early part of 2024, and we see every reason to continue riding this bull market higher. We see small- and mid-caps resuming uptrends $IWM $VXF</li>
<li>Downgrading Staples (XLP) to underweight after brief stint at market weight. Highlighting several buys within Financials: Property &amp; Casualty Insurance BRK.B, PGR, CB, TRV, ALL, CINF, ERIE, and more</li>
</ul>


Since early November 2023 we have laid out our bullish expectations for a year-end rally that we anticipated would continue into the early part of 2024. 
Here we are in the early part of 2024, and we see every reason to continue riding this bull market higher. We see small- and mid-caps resuming uptrends $IWM $VXF
Downgrading Staples (XLP) to underweight after brief stint at market weight. Highlighting several buys within Financials: Property &amp; Casualty Insurance BRK.B, PGR, CB, TRV, ALL, CINF, ERIE, and more


Continue Riding This Bull Market Higher; Small- And Mid-Caps Resuming Uptrends; Downgrading Staples

<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

United States

Capital One Financial Corporation is a diversified bank. The Bank, through its subsidiaries, offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients both domestically and internationally.  Capital One has bank locations in Connecticut, Louisiana, New Jersey, New York, and Texas.

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Capital One Financial (COF 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

Continue Riding This Bull Market Higher; Small- And Mid-Caps Resuming Uptrends; Downgrading Staples

Continue Riding This Bull Market Higher; Small- and Mid-Caps Resuming Uptrends $IWM $RTY $VXF; Downgrading Consumer Staples $XLP to Underweight...

Vermilion Research

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

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