External reports (aggregated public sources), Value Investors Club

Value Investors Club

External reports (aggregated public sources)

Equity Bottom-Up

Discover Financial Services / Equity Bottom-Up

<ul><li>Discover Financial Services is a successful business with strong financial performance and ownership of the Discover Network and Pulse debit card scheme in the US</li><li>DFS focuses on prime customers and has a high-quality deposit base, remaining profitable during challenging economic times</li><li>A merger announcement with Capital One Financial Corp. could reshape the financial services industry, with DFS set to be acquired at a significant premium to its undisturbed price</li></ul>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Discover Financial Services is a successful business with strong financial performance and ownership of the Discover Network and Pulse debit card scheme in the USDFS focuses on prime customers and has a high-quality deposit base, remaining profitable during challenging economic timesA merger announcement with Capital One Financial Corp. could reshape the financial services industry, with DFS set to be acquired at a significant premium to its undisturbed priceThis content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Discover Financial Services (DFS) - Monday, Apr 29, 2024

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>
<a href="https://www.smartkarma.com/entities/ally-financial-inc" target="_blank" data-smartkarma-citation="entities:9683:1" rel="noopener">Ally Financial (ALLY US)</a> gave a poor view of now and the immediate future for credit costs within its primary loan book, used cars for subprime borrowers</li>
<li>There is often good read-through for mainstream banks and overall credit metrics, we saw this in Thailand before 1997 and in the US with Indymac, Countrywide, Household</li>
<li>If the Fed has a better view on granular data than one single finance company, we believe they will use this data when considering rate cut magnitude, next week
</li>
</ul>



Ally Financial (ALLY US) gave a poor view of now and the immediate future for credit costs within its primary loan book, used cars for subprime borrowers
There is often good read-through for mainstream banks and overall credit metrics, we saw this in Thailand before 1997 and in the US with Indymac, Countrywide, Household
If the Fed has a better view on granular data than one single finance company, we believe they will use this data when considering rate cut magnitude, next week



Ally Financial - Suggests Large Fed Cut, Credit Cost Guidance Worsening, Fringe Finco View Can Lead

<ul>
<li>Weekly balance sheets give a view of underlying credit conditions in the US and they are not positive. Lending growth continues to decelerate and could reach negative growth soon. </li>
<li>Cash balances are rising and this suggests that US large banks are not comfortable with risk and also seeing less opportunities. Cash/loans ratio rising fastest in most recent week. </li>
<li>Large time deposits cost the most, and their growth rate is now 109% YoY in the most recent week, rising more than loans in each of the past 3 weeks.</li>
</ul>


Weekly balance sheets give a view of underlying credit conditions in the US and they are not positive. Lending growth continues to decelerate and could reach negative growth soon. 
Cash balances are rising and this suggests that US large banks are not comfortable with risk and also seeing less opportunities. Cash/loans ratio rising fastest in most recent week. 
Large time deposits cost the most, and their growth rate is now 109% YoY in the most recent week, rising more than loans in each of the past 3 weeks.


US Large Banks - Weekly Balance Sheets: Decelerating Loans, Rising Cash, Big Time Deposits +109% YoY

<ul>
<li>US large banks are showing sharply expanding loans in recent weeks, in granular HFD</li>
<li>This comes as their higher cost Jumbo Time Deposits are now showing negative growth</li>
<li>There are positive implications for net interest income, NIM and net profit delta of large US banks</li>
</ul>


US large banks are showing sharply expanding loans in recent weeks, in granular HFD
This comes as their higher cost Jumbo Time Deposits are now showing negative growth
There are positive implications for net interest income, NIM and net profit delta of large US banks


US Banks - HFD Shows Sharply Expanding Loans, with Newly Negative Growth in Jumbo Time Deposits

<ul><li>SYF, DFS, and ALLY are spinoffs from larger companies in consumer finance and create shareholder value through focused strategies and good management culture.</li><li>ALLY is particularly interesting due to rate-cycle dynamics and a shift from investing in competitive strength to harvesting from past investments.</li><li>The onboarding of a new CEO at ALLY suggests potential developments in the company's strategy, with a focus on management culture, competitive strength investment, and the impact of the current rate cycle on earnings power.</li></ul>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

SYF, DFS, and ALLY are spinoffs from larger companies in consumer finance and create shareholder value through focused strategies and good management culture.ALLY is particularly interesting due to rate-cycle dynamics and a shift from investing in competitive strength to harvesting from past investments.The onboarding of a new CEO at ALLY suggests potential developments in the company's strategy, with a focus on management culture, competitive strength investment, and the impact of the current rate cycle on earnings power.This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Ally Financial Inc (ALLY) - Wednesday, Aug 28, 2024

United States

Discover Financial Services is a credit card issuer and electronic payment services company.  The Company issues credit cards and offers student and personal loans, as well as savings products such as certificates of deposit and money market accounts  and operates an automated teller machine(ATM)/debit network, which includes ATMs, as well as POS terminals nationwide.

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Discover Financial Services (DFS US)

Discover Financial Services (DFS) - Monday, Apr 29, 2024

Discover Financial Services is a successful business with strong financial performance and ownership of the Discover Network and Pulse debit card...

Value Investors Club

Ally Financial - Suggests Large Fed Cut, Credit Cost Guidance Worsening, Fringe Finco View Can Lead

New disclosure, comments, guidance from Ally Financial show a major deterioration in credit metrics now, in coming months, which can mean a larger...

Daniel Tabbush

US Large Banks - Weekly Balance Sheets: Decelerating Loans, Rising Cash, Big Time Deposits +109% YoY

US large banks are seeing loan growth decelerating, cash rising, large time deposits up 109% YoY in most recent week. Weekly B/S data suggests net...

Daniel Tabbush

US Banks - HFD Shows Sharply Expanding Loans, with Newly Negative Growth in Jumbo Time Deposits

US large banks show loans accelerating (but not riskier CRE loans) and with higher cost Jumbo time deposit growth now turning negative in new...

Daniel Tabbush

Ally Financial Inc (ALLY) - Wednesday, Aug 28, 2024

SYF, DFS, and ALLY are spinoffs from larger companies in consumer finance and create shareholder value through focused strategies and good...

Value Investors Club

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