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

SBI Sumishin Net Bank  / Equity Bottom-Up

<ul>
<li>This is not a typo: SBI Sumishin Net Bank saw loans up 21% YoY in 1Q24, operating in Japan</li>
<li>The bank has achieved cost scale, with acquisition cost per account a fraction of 2 yrs ago</li>
<li>Credit quality remains exceptional, amongst best in Japan, with 0.06% NPL ratio in 1Q24</li>
</ul>


This is not a typo: SBI Sumishin Net Bank saw loans up 21% YoY in 1Q24, operating in Japan
The bank has achieved cost scale, with acquisition cost per account a fraction of 2 yrs ago
Credit quality remains exceptional, amongst best in Japan, with 0.06% NPL ratio in 1Q24


SBI Sumishin Net Bank - Dramatic ROA Expansion, Steady & Strong, Profit & Loan Growth, ROE at 19%

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>Murakami's entity, City Index Eleventh, <a href="https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100SXVR.pdf?sv=2020-08-04&amp;st=2024-02-28T11%3A55%3A56Z&amp;se=2029-02-28T15%3A00%3A00Z&amp;sr=b&amp;sp=rl&amp;sig=KsmAvBaNzu2rEiYRuXlPOtKaHqN1iiDtl2acvAB9gH8%3D" target="_blank" rel="noopener">reported</a> a 5.42% shareholding in <a href="https://www.smartkarma.com/entities/aozora-bank-ltd" target="_blank" data-smartkarma-citation="entities:6483:1" rel="noopener">Aozora Bank Ltd (8304 JP)</a>. Murakami started buying a day after the disastrous 3QFY23 results.</li>
<li>Murakami's average buy-in price is JPY2,137.88 per share, a 34% discount to the pre-3QFY23 results share price. </li>
<li>Murakami's disclosure suggests two possibilities: the start of an activist campaign or a short-term trading play replicating the <a href="https://www.smartkarma.com/entities/pacific-metals-co-ltd" target="_blank" data-smartkarma-citation="entities:3439:1" rel="noopener">Pacific Metals (5541 JP)</a> playbook.</li>
</ul>


Murakami's entity, City Index Eleventh, reported a 5.42% shareholding in Aozora Bank Ltd (8304 JP). Murakami started buying a day after the disastrous 3QFY23 results.
Murakami's average buy-in price is JPY2,137.88 per share, a 34% discount to the pre-3QFY23 results share price. 
Murakami's disclosure suggests two possibilities: the start of an activist campaign or a short-term trading play replicating the Pacific Metals (5541 JP) playbook.


Aozora Bank (8304 JP): Murakami Becomes a Substantial Shareholder

<ul>
<li>ROE is now 24.4% in 1H24 compared with 18.0% last year. ROE consistently rising well, from 15.9% in FY21. </li>
<li>Quarterly net profit up 47% YoY in 2Q24. On an annualized basis, net profit in FY24 can show considerable delta from FY23, a year when returns and profit were good.</li>
<li>Costs are well-contained. SG&amp;A to assets was 23.7% at its recent peak and now it's 20.8%. SG&amp;A to revenue is now 55.5% compared with 65.3% at its recent peak.</li>
</ul>


ROE is now 24.4% in 1H24 compared with 18.0% last year. ROE consistently rising well, from 15.9% in FY21. 
Quarterly net profit up 47% YoY in 2Q24. On an annualized basis, net profit in FY24 can show considerable delta from FY23, a year when returns and profit were good.
Costs are well-contained. SG&amp;A to assets was 23.7% at its recent peak and now it's 20.8%. SG&amp;A to revenue is now 55.5% compared with 65.3% at its recent peak.


SPARX - Sharply Expanding ROE, 1H24 Profit Annualized Surges YoY, FUM Strongly Up, Costs Contained

Mizuho Financial Group / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mizuho-financial-group-inc" target="_blank" data-smartkarma-citation="entities:219:1" rel="noopener">Mizuho Financial Group (8411 JP)</a> can see higher profit guidance change than many in Japan, the region, given its first quarter was 40% of full-year guidance</li>
<li>Riding JGB yields will support this, with less loans to total financial assets, and the bank has even seen its unrealized losses on JGBs decline. Good ALM.</li>
<li>Credit metrics are better. Its credit costs are in reversal. This can continue or at least remain low. This is supported by granular, macro data. </li>
</ul>



Mizuho Financial Group (8411 JP) can see higher profit guidance change than many in Japan, the region, given its first quarter was 40% of full-year guidance
Riding JGB yields will support this, with less loans to total financial assets, and the bank has even seen its unrealized losses on JGBs decline. Good ALM.
Credit metrics are better. Its credit costs are in reversal. This can continue or at least remain low. This is supported by granular, macro data. 


Mizuho - Expect Profit Guidance Surge | JGBs Up, JGBs Unrealized Losses Down | Credit Metrics Better

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>40% of Banks outside the Top 7 (none of which offered H1 guidance) in the TOPIX Banks Index have now changed H1 guidance or reported H1. 2 reported both up.</li>
<li>92% of the others have revised up H1 net income guidance a weighted average of 47%. Net Interest Income, Corporate fees/comms are up, expenses and credit costs are down.</li>
<li>Big tables with data, reasons for guidance changes, and buyback history of each presented below.</li>
</ul>


40% of Banks outside the Top 7 (none of which offered H1 guidance) in the TOPIX Banks Index have now changed H1 guidance or reported H1. 2 reported both up.
92% of the others have revised up H1 net income guidance a weighted average of 47%. Net Interest Income, Corporate fees/comms are up, expenses and credit costs are down.
Big tables with data, reasons for guidance changes, and buyback history of each presented below.


Japan H1 Bank Earnings: Interest/Fees Up, Expenses/Credit Costs Down - Opportunity Abounds, Still

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)

SBI Sumishin Net Bank - Dramatic ROA Expansion, Steady & Strong, Profit & Loan Growth, ROE at 19%

With Brian Freitas research on new TOPIX changes, SBI Sumishin Net Bank is one of the greatest beneficiaries, a bank in Japan which stands out well...

Daniel Tabbush

Aozora Bank (8304 JP): Murakami Becomes a Substantial Shareholder

Murakami's disclosure suggests two possibilities: the start of an activist campaign or a short-term trading play replicating the Pacific Metals...

Arun George

SPARX - Sharply Expanding ROE, 1H24 Profit Annualized Surges YoY, FUM Strongly Up, Costs Contained

Continuously expanding ROE now to 24%, profit growth at 47% YoY in the quarter, can mean an exceptionally strong full year. Costs are well...

Daniel Tabbush

Mizuho - Expect Profit Guidance Surge | JGBs Up, JGBs Unrealized Losses Down | Credit Metrics Better

Mizuho can see major rise in its profit guidance, since it has met 40% of target in first quarter, also due to rising JGB yields, better loan...

Daniel Tabbush

Japan H1 Bank Earnings: Interest/Fees Up, Expenses/Credit Costs Down - Opportunity Abounds, Still

The macro backdrop for Japanese banks is pretty good. Business restructuring efforts are bearing fruit. Global macro is adding fees. Stocks are up,...

Travis Lundy

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