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

<ul>
<li>Short term borrowing rose 2.3x in the past four quarters, alongside rising interest rates</li>
<li>During this time, long term borrowings were actually down, so no locking in of low rates</li>
<li>As such, Chiba is not fully, or hardly benefiting from BOJ policy changes, with NIM down</li>
</ul>


Short term borrowing rose 2.3x in the past four quarters, alongside rising interest rates
During this time, long term borrowings were actually down, so no locking in of low rates
As such, Chiba is not fully, or hardly benefiting from BOJ policy changes, with NIM down


Chiba Bank - Short Term Borrowing Surges, Just at the Wrong Time

Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Kawasaki Heavy Industries / Equity Bottom-Up

<ul>
<li>Expect continued buying in defense related, as well as banks and life insurance, renewable energy, rails, and medical IT plays with Shigeru Ishiba at the helm. </li>
<li>The Market will be quick to rotate out of names which spiked into Friday's close on expectation for a Sanae Takaichi win in the LDP election.  </li>
<li>Ishiba has been a vocal critic of Abenomics, and his potential policies aimed at higher taxes for investment incomes and capital gains are set to weigh on the Japanese market. </li>
</ul>


Expect continued buying in defense related, as well as banks and life insurance, renewable energy, rails, and medical IT plays with Shigeru Ishiba at the helm. 
The Market will be quick to rotate out of names which spiked into Friday's close on expectation for a Sanae Takaichi win in the LDP election.  
Ishiba has been a vocal critic of Abenomics, and his potential policies aimed at higher taxes for investment incomes and capital gains are set to weigh on the Japanese market. 


Best Outright and Pair Trades for an Ishiba-Led LDP

<ul>
<li>If there is no relief on yield curve control (YCC) anytime soon, seek banks with low JGBs</li>
<li>Chiba Bank is one of few banks in Japan where JGBs are nearly a rounding error vs assets</li>
<li>A pure play on an improving Japan, focused next door to Tokyo, with falling NPLs</li>
</ul>


If there is no relief on yield curve control (YCC) anytime soon, seek banks with low JGBs
Chiba Bank is one of few banks in Japan where JGBs are nearly a rounding error vs assets
A pure play on an improving Japan, focused next door to Tokyo, with falling NPLs


Chiba Bank - Less Yield Curve Control Issue With Near Zero JGBs

<ul>
<li>
<a href="https://www.smartkarma.com/entities/japan-post-bank-co-ltd" target="_blank" data-smartkarma-citation="entities:838:1" rel="noopener">Japan Post Bank (7182 JP)</a> saw its net profit surge from non-recurring gains, which was from the sale of stocks.  </li>
<li>The company's cost of funds worsened more than the improvement in its yields, and we believe this remains an issue related to hedging costs. </li>
<li>Unrealized gains on foreign bonds remains significantly higher now than a year ago and this may again be the driver for earnings, but still with very low ROA. </li>
</ul>



Japan Post Bank (7182 JP) saw its net profit surge from non-recurring gains, which was from the sale of stocks.  
The company's cost of funds worsened more than the improvement in its yields, and we believe this remains an issue related to hedging costs. 
Unrealized gains on foreign bonds remains significantly higher now than a year ago and this may again be the driver for earnings, but still with very low ROA. 


Japan Post Bank - It's like a Closed End Mutual Fund More Than Ever

<ul>
<li>There are few, if any banks, in Japan that compare with Rakuten's 65% loan growth</li>
<li>The newly listed interbank stands out with exceptional ROE, not from leverage</li>
<li>Credit metrics remain strong, with NPL cover especially high vs peers</li>
</ul>


There are few, if any banks, in Japan that compare with Rakuten's 65% loan growth
The newly listed interbank stands out with exceptional ROE, not from leverage
Credit metrics remain strong, with NPL cover especially high vs peers


Rakuten Bank - In Japan With 65% Loan Growth

Japan

The Chiba Bank, Ltd. is a regional bank based in Chiba Prefecture. The Bank offers general banking services including deposits, loans, and foreign exchange transactions. The Chiba Bank also develops software and provides financial services such as leasing, securities brokerage, letter of credit, and credit cards.

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Chiba Bank (8331 JP)

Chiba Bank - Short Term Borrowing Surges, Just at the Wrong Time

Chiba Bank has opted to grossly raise its short term borrowings as JPY rates start to rise while not locking in long term borrowings.

Daniel Tabbush

Best Outright and Pair Trades for an Ishiba-Led LDP

How to position in Japanese equities after the surprise win by Shigeru Ishiba over Sanae Takaichi in Friday's LDP election.

Andrew Jackson

Chiba Bank - Less Yield Curve Control Issue With Near Zero JGBs

With BOJ move for some nimble YCCC relief it becomes important to differentiate between Japan's banks with duration and bonds.

Daniel Tabbush

Japan Post Bank - It's like a Closed End Mutual Fund More Than Ever

Japan Post Bank is more than ever like a closed-end mutual fund, which is hardly seeing any line items drive profit upward other than stock sales,...

Daniel Tabbush

Rakuten Bank - In Japan With 65% Loan Growth

With corporate news of bank integration, see comments from Travis Lundy, it is worthwhile to understand Rakuten Bank's unique position, character,...

Daniel Tabbush

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