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

DBS revealed continued strong NPL formation in Singapore. We are doubtful that this suddenly reverses or stops. The bank’s NPL cover ratio continued to decline in the quarter, as its provision costs have not kept pace.  Without shame, DBS opted to take zero new general provision expenses in the quarter, despite the environment. Clearly thinking about the cosmetics of the numbers, it indicated in its presentation, that it though has increased these charges after the fourth quarter…by a whopping…

DBS revealed continued strong NPL formation in Singapore. We are doubtful that this suddenly reverses or stops. The bank’s NPL cover ratio continued to decline in the quarter, as its provision costs have not kept pace.  Without shame, DBS opted to take zero new general provision expenses in the quarter, despite the environment. Clearly thinking about the cosmetics of the numbers, it indicated in its presentation, that it though has increased these charges after the fourth quarter…by a whopping…

Does Anybody Believe DBS' NPL Surge Will Suddenly Stop?

Independent Insight Provider

Stewart Paterson

Taurus Advisors LLP

Macroeconomics

US Consumer Price Inflation released today surprised to the upside. Core CPI at 2.3% is comfortably above the Fed's inflation target of 2%. As importantly, perhaps, the 12 month moving average for the core inflation - at 2.2% - is at its highest level since the GFC. The last time the twelve month average core CPI was this high AND trending up (as opposed to being in the process of collapsing) was in mid 2006 when the upper bound of the fed fund rate was 5.25%. While the world has change since…

US Consumer Price Inflation released today surprised to the upside. Core CPI at 2.3% is comfortably above the Fed's inflation target of 2%. As importantly, perhaps, the 12 month moving average for the core inflation - at 2.2% - is at its highest level since the GFC. The last time the twelve month average core CPI was this high AND trending up (as opposed to being in the process of collapsing) was in mid 2006 when the upper bound of the fed fund rate was 5.25%. While the world has change since…

<a href="https://www.smartkarma.com/entities/516" target="_blank" data-smartkarma-citation="entities:516:1">HSBC Holdings Plc (5 HK)</a> will see its share of worsening exposures in oil &amp; gas, commodities, energy and shipping. With de-risking all the rage, we would also expect less strong trading income, which historically had been a reasonable revenue driver. HSBC’s profit declined sharply in the past three quarters, to a slight loss in 3Q16. Where its credit costs remained low in that period, we would not be surprised to see a rebound here; maybe not on par with <a href="https://www.smartkarma.com/entities/114" target="_blank" data-smartkarma-citation="entities:114:1">Oversea Chinese Banking Corp. Limited</a>…

HSBC Holdings Plc (5 HK) will see its share of worsening exposures in oil &amp; gas, commodities, energy and shipping. With de-risking all the rage, we would also expect less strong trading income, which historically had been a reasonable revenue driver. HSBC’s profit declined sharply in the past three quarters, to a slight loss in 3Q16. Where its credit costs remained low in that period, we would not be surprised to see a rebound here; maybe not on par with Oversea Chinese Banking Corp. Limited…

Thematic (Sector/Industry)

We doubt there are many people who believe that China’s banks have especially safe corporate exposure. Few believe the low 1.8% NPL ratio that China’s banks report. So when NPLs and credit costs ratchet higher, it will hurt, but will not be totally unexpected. Singapore is the opposite extreme, and this is what is of real interest: where there is a giant gap between perception and reality. We turn to Google as a proxy on what the world believes.We note the number of results for the search “China…

We doubt there are many people who believe that China’s banks have especially safe corporate exposure. Few believe the low 1.8% NPL ratio that China’s banks report. So when NPLs and credit costs ratchet higher, it will hurt, but will not be totally unexpected. Singapore is the opposite extreme, and this is what is of real interest: where there is a giant gap between perception and reality. We turn to Google as a proxy on what the world believes.We note the number of results for the search “China…

Singapore Banks: A Far Greater Perception-Reality Gap Compared with China Banks

On my Latin key board "I Mera Tis Marmotas" is the closest I can get to the Greek for groundhog day. Traditionally celebrated at the start of February, groundhog day is suppose to portend the arrival of spring but since the 1993 film of the same name has come to mean that feeling of being caught in a repeating time-loop. And so we find that in February 2017, the German Finance Minister, the Greek Prime Minister, the board of the IMF and Greece's Eurozone partners are arguing about the…

On my Latin key board "I Mera Tis Marmotas" is the closest I can get to the Greek for groundhog day. Traditionally celebrated at the start of February, groundhog day is suppose to portend the arrival of spring but since the 1993 film of the same name has come to mean that feeling of being caught in a repeating time-loop. And so we find that in February 2017, the German Finance Minister, the Greek Prime Minister, the board of the IMF and Greece's Eurozone partners are arguing about the…

Singapore

DBS Group Holdings Limited and its subsidiaries provide a variety of financial services.  The Company offers services including mortgage financing, lease and hire purchase financing, nominee and trustee, funds management, corporate advisory and brokerage .  DBS Group also acts as the primary dealer in Singapore government securities.

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DBS (DBS SP)

Does Anybody Believe DBS' NPL Surge Will Suddenly Stop?

DBS revealed continued strong NPL formation in Singapore. We are doubtful that this suddenly reverses or stops. The bank’s NPL cover ratio...

Daniel Tabbush

Money Matters: US Inflation & The Fed

US Consumer Price Inflation released today surprised to the upside. Core CPI at 2.3% is comfortably above the Fed's inflation target of 2%. As...

Stewart Paterson

HSBC Results May Be Gruesome

HSBC Holdings Plc (5 HK) will see its share of worsening exposures in oil & gas, commodities, energy and shipping. With de-risking all the...

Daniel Tabbush

Singapore Banks: A Far Greater Perception-Reality Gap Compared with China Banks

We doubt there are many people who believe that China’s banks have especially safe corporate exposure. Few believe the low 1.8% NPL ratio that...

Daniel Tabbush

Money Matters: I Mera Tis Marmotas

On my Latin key board "I Mera Tis Marmotas" is the closest I can get to the Greek for groundhog day. Traditionally celebrated at the start of...

Stewart Paterson

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