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>Japan's banks can benefit from continued strong loan demand, with signals from the Tankan Survey and from the loan officer survey</li>
<li>The story for Japan's banks is not only about unwinding cross shareholdings and rising interest rates, but it's also about core lending</li>
<li>With bettering loan volume, with more demand and inclination to lend, banks can see benign credit metrics, further supporting profit delta</li>
</ul>


Japan's banks can benefit from continued strong loan demand, with signals from the Tankan Survey and from the loan officer survey
The story for Japan's banks is not only about unwinding cross shareholdings and rising interest rates, but it's also about core lending
With bettering loan volume, with more demand and inclination to lend, banks can see benign credit metrics, further supporting profit delta


Japan's Banks - Lending Is Strong, Loan Officer Survey Suggests More, Credit Costs Can Be Low

Focus on Smaller Cap Value Names, Altay Capital

Altay Capital

Focus on Smaller Cap Value Names

Long time value investor. Long/Short portfolio that’s always net long (between 30-80%). I have extensive experience in the video game industry as I founded a leading media company in the space, which I have since exited after an acquisition. Gaming companies only make up ~15% of my portfolio, but its a sector where I believe I have an edge. A newsletter about value investing! Mostly focus on smaller cap value names that aren't widely covered.

<ul><li>Beji Sasaki is an unusual investor. He made a name for himself during the bubble economy of the 80s/90s as the ‘takeover man’ and despite not getting too much attention lately, he’s still active in the markets.</li><li>He takes stakes in public companies and aims to improve profitability and wrest control.</li><li>He’s an aggressive corporate raider looking to take control of public companies and maximize profits, a concept that’s anathema in Japan.</li></ul>

Beji Sasaki is an unusual investor. He made a name for himself during the bubble economy of the 80s/90s as the ‘takeover man’ and despite not getting too much attention lately, he’s still active in the markets.He takes stakes in public companies and aims to improve profitability and wrest control.He’s an aggressive corporate raider looking to take control of public companies and maximize profits, a concept that’s anathema in Japan.

Investing Alongside Beji Sasaki: Japan's Unconventional Corporate Raider and Value Investor

Senior Bank Analyst - Japanese Banks, Windamee Research

J. Brian Waterhouse

Senior Bank Analyst - Japanese Banks

Windamee Research

Japanese Banks

Equity Bottom-Up

Financial entrepreneur Yoshitaka Kitao and his flagship company <a href="https://www.smartkarma.com/entities/sbi-holdings-inc" target="_blank" data-smartkarma-citation="entities:10928:1" rel="noopener">Sbi Holdings (8473 JP)</a> have just netted their sixth and seventh regional banks, namely secondary regional banks Kirayaka Bank and Sendai Bank from the Tohoku Region of northern Japan.On Friday 20 November 2020, the holding company for these two banks, tiny <a href="https://www.smartkarma.com/entities/jimoto-holdings-inc" target="_blank" data-smartkarma-citation="entities:5763:1" rel="noopener">Jimoto Holdings (7161 JP)</a>, finally announced its interim results for FY3/2021.  Interim net profits collapsed 91% YoY to just ¥64 million (US$615,000), and the group’s revised full-year guidance now warns of a full-year consolidated net loss of around ¥3 billion: largely the result of accumulated valuation losses in the securities portfolio of principal subsidiary Kirayaka Bank.  To rub salt into investors’ wounds, Jimoto Holdings simultaneously announced that it was issuing 3.65 million new shares to a subsidiary of <a href="https://www.smartkarma.com/entities/sbi-holdings-inc" target="_blank" data-smartkarma-citation="entities:10928:1" rel="noopener">Sbi Holdings (8473 JP)</a>  for a consideration of around ¥3.4 billion (US$33.6 million).  The SBI Group will control just over 18% of Jimoto Holdings’ outstanding shares when the transactions are completed.Jimoto Holdings is the latest investment by financial entrepreneur Yoshitaka Kitao in Japan’s struggling regional banking sector, and another ‘stepping-stone’ for the SBI Group’s president towards his goal of creating a “fourth megabank”.Foreign investors would be well advised to steer clear.  The future for Jimoto Holdings is far from certain, despite the capital injection.  Caveat Emptor! (May the Buyer Beware!) remains our advice to foreign investors considering investing in the Japanese banking sector in CY2020.

Financial entrepreneur Yoshitaka Kitao and his flagship company Sbi Holdings (8473 JP) have just netted their sixth and seventh regional banks, namely secondary regional banks Kirayaka Bank and Sendai Bank from the Tohoku Region of northern Japan.On Friday 20 November 2020, the holding company for these two banks, tiny Jimoto Holdings (7161 JP), finally announced its interim results for FY3/2021.  Interim net profits collapsed 91% YoY to just ¥64 million (US$615,000), and the group’s revised full-year guidance now warns of a full-year consolidated net loss of around ¥3 billion: largely the result of accumulated valuation losses in the securities portfolio of principal subsidiary Kirayaka Bank.  To rub salt into investors’ wounds, Jimoto Holdings simultaneously announced that it was issuing 3.65 million new shares to a subsidiary of Sbi Holdings (8473 JP)  for a consideration of around ¥3.4 billion (US$33.6 million).  The SBI Group will control just over 18% of Jimoto Holdings’ outstanding shares when the transactions are completed.Jimoto Holdings is the latest investment by financial entrepreneur Yoshitaka Kitao in Japan’s struggling regional banking sector, and another ‘stepping-stone’ for the SBI Group’s president towards his goal of creating a “fourth megabank”.Foreign investors would be well advised to steer clear.  The future for Jimoto Holdings is far from certain, despite the capital injection.  Caveat Emptor! (May the Buyer Beware!) remains our advice to foreign investors considering investing in the Japanese banking sector in CY2020.

Jimoto Holdings (7161 JP):  Kirayaka Cracks

The stock price of the tiny, embattled <a href="https://www.smartkarma.com/entities/towa-bank-ltd" target="_blank" data-smartkarma-citation="entities:18283:1" rel="noopener">Towa Bank (8558 JP)</a>, a small Japanese secondary regional bank from Gunma Prefecture just north of Tokyo, at one point jumped 13.5% on Friday on 17x normal trading volume after the bank confirmed it was in “co-operative discussions” with online financial specialist <a href="https://www.smartkarma.com/entities/sbi-holdings-inc" target="_blank" data-smartkarma-citation="entities:10928:1" rel="noopener">Sbi Holdings (8473 JP)</a>.Financial media have suggested the bank is considering a tie-up with SBI through a small mutual shareholding (1% of Towa Bank stock  -  worth roughly ¥275 million  -  for up to ¥200 million in SBI shares) and the establishment of  a jointly-managed fund to support local businesses.  Towa Bank has stated that nothing has been decided as yet.  If media reports are correct, this would be the fifth such investment by financial entrepreneur Yoshitaka Kitao in Japan’s struggling regional banking sector.  However, there are some important differences with this tie-up.Towa Bank has a long and unenviable history of poor credit decisions and consequent hefty losses, prompting a taxpayer-funded bail-out in FY3/2010.  The current president has been working hard to turn the bank’s fortunes around, managing to repay ¥20.0 billion in public funds in FY3/2019.  Even so, Towa Bank still has ¥15.0 billion (US$143 million) in public funds to repay, and profits have been shrinking rapidly.While this may be seen as another ‘stepping-stone’ for SBI Group’s president and financial entrepreneur Yoshitaka Kitao in his bid to create a “fourth megabank”, investors should bear in mind that the net risk investment amount is little more than chump change for an enterprise like SBI.  Moreover, the apparent emphasis on support for local industry, rather than support for Towa Bank itself, suggests that this tie-up is not a ‘rescue’ of Towa Bank by a ‘white knight’, but an opportunity for a financial entrepreneur to gain valuable access to Towa Bank’s retail client base for a very modest cash outlay.  As such, foreign investors would be well advised to steer clear of Towa Bank stock, as valuations are already demanding.  Caveat Emptor! (May the Buyer Beware!) remains our advice to foreign investors considering investing in the Japanese banking sector in CY2020.

The stock price of the tiny, embattled Towa Bank (8558 JP), a small Japanese secondary regional bank from Gunma Prefecture just north of Tokyo, at one point jumped 13.5% on Friday on 17x normal trading volume after the bank confirmed it was in “co-operative discussions” with online financial specialist Sbi Holdings (8473 JP).Financial media have suggested the bank is considering a tie-up with SBI through a small mutual shareholding (1% of Towa Bank stock  -  worth roughly ¥275 million  -  for up to ¥200 million in SBI shares) and the establishment of  a jointly-managed fund to support local businesses.  Towa Bank has stated that nothing has been decided as yet.  If media reports are correct, this would be the fifth such investment by financial entrepreneur Yoshitaka Kitao in Japan’s struggling regional banking sector.  However, there are some important differences with this tie-up.Towa Bank has a long and unenviable history of poor credit decisions and consequent hefty losses, prompting a taxpayer-funded bail-out in FY3/2010.  The current president has been working hard to turn the bank’s fortunes around, managing to repay ¥20.0 billion in public funds in FY3/2019.  Even so, Towa Bank still has ¥15.0 billion (US$143 million) in public funds to repay, and profits have been shrinking rapidly.While this may be seen as another ‘stepping-stone’ for SBI Group’s president and financial entrepreneur Yoshitaka Kitao in his bid to create a “fourth megabank”, investors should bear in mind that the net risk investment amount is little more than chump change for an enterprise like SBI.  Moreover, the apparent emphasis on support for local industry, rather than support for Towa Bank itself, suggests that this tie-up is not a ‘rescue’ of Towa Bank by a ‘white knight’, but an opportunity for a financial entrepreneur to gain valuable access to Towa Bank’s retail client base for a very modest cash outlay.  As such, foreign investors would be well advised to steer clear of Towa Bank stock, as valuations are already demanding.  Caveat Emptor! (May the Buyer Beware!) remains our advice to foreign investors considering investing in the Japanese banking sector in CY2020.

Towa Bank (8558 JP):  Another Notch in the Bedpost

<a href="https://www.smartkarma.com/entities/bank-of-toyama-ltd" target="_blank" data-smartkarma-citation="entities:3496:1" rel="noopener">Bank Of Toyama /Ltd (8365 JP)</a>’s share price has risen over 36% in the last 30 days on 4x normal daily trading volume and has shot up an astonishing +135% in the last six months.  What is going on, and why do foreign investors still own under 1% of outstanding shares if this bank is such an outstanding performer?
Although the stock prices of major Japanese banks have barely moved over the last month, some regional bank stocks have seen a surge in trading volume and double-digit improvements in their share prices.  This surge is attributable to comments made in early September by newly-elected Japanese prime minister Yoshihide Suga that there were “too many regional banks”, prompting speculation that mergers of regional and secondary regional banks might be actively encouraged under the incoming Suga Government.
However, we think the sudden rise in Bank of Toyama’s stock price has less to do with PM Suga’s comments on overbanking in Japan and more to do with stock ‘cornering’ by a group or groups of domestic speculators.  This has all the signs of a classic domestic ‘ramp’, designed to quickly push up the share price of a target stock and then offload the accumulated shares for a quick profit close to the top of the price range onto unsuspecting punters drawn by the action.  The bank’s fundamentals simply do not support current valuations.  Foreign investors should steer well clear.   Caveat emptor!  (May the buyer beware!)

Bank Of Toyama /Ltd (8365 JP)’s share price has risen over 36% in the last 30 days on 4x normal daily trading volume and has shot up an astonishing +135% in the last six months.  What is going on, and why do foreign investors still own under 1% of outstanding shares if this bank is such an outstanding performer?
Although the stock prices of major Japanese banks have barely moved over the last month, some regional bank stocks have seen a surge in trading volume and double-digit improvements in their share prices.  This surge is attributable to comments made in early September by newly-elected Japanese prime minister Yoshihide Suga that there were “too many regional banks”, prompting speculation that mergers of regional and secondary regional banks might be actively encouraged under the incoming Suga Government.
However, we think the sudden rise in Bank of Toyama’s stock price has less to do with PM Suga’s comments on overbanking in Japan and more to do with stock ‘cornering’ by a group or groups of domestic speculators.  This has all the signs of a classic domestic ‘ramp’, designed to quickly push up the share price of a target stock and then offload the accumulated shares for a quick profit close to the top of the price range onto unsuspecting punters drawn by the action.  The bank’s fundamentals simply do not support current valuations.  Foreign investors should steer well clear.   Caveat emptor!  (May the buyer beware!)

Bank of Toyama (8365 JP):  Irrational Exuberance

Japan

THE FUKUSHIMA BANK, LTD. is a regional bank based in Fukushima.  The Bank provides commercial banking services including deposits, savings, loans to local individuals and industries, and foreign exchange transactions.  The Fukushima Bank also provides financial services such as leasing, credit card, credit guarantee, and insurance services, and also develops software.

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Fukushima Bank (8562 JP)

Japan's Banks - Lending Is Strong, Loan Officer Survey Suggests More, Credit Costs Can Be Low

Japan's banks are seeing good loan volume and diffusion index on Tankan Survey and loan officer survey suggests there is more to come. Selling...

Daniel Tabbush

Investing Alongside Beji Sasaki: Japan's Unconventional Corporate Raider and Value Investor

He’s an aggressive corporate raider looking to take control of public companies and maximize profits, a concept that’s anathema in Japan.

Altay Capital

Jimoto Holdings (7161 JP): Kirayaka Cracks

Financial entrepreneur Yoshitaka Kitao and his flagship company SBI Holdings (8473 JP) have just netted their sixth and seventh regional banks,...

J. Brian Waterhouse

Towa Bank (8558 JP): Another Notch in the Bedpost

The evidence suggests that this is not a 'white knight' riding to the rescue, but another opportunity for Yoshitaka Kitao to gain access to a...

J. Brian Waterhouse

Bank of Toyama (8365 JP): Irrational Exuberance

Bank Of Toyama /Ltd (8365 JP)’s share price has risen over 36% in the last 30 days on 4x normal daily trading volume and has shot up an astonishing...

J. Brian Waterhouse

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