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

For all the hype, <a href="https://www.smartkarma.com/entities/21976" target="_blank" data-smartkarma-citation="entities:21976:1">HSBC Holdings PLC (HSBA LN)</a> can hardly eek out a profit in the latest quarter. The hope that rising interest rates would be a boon for HSBC especially has to fade, where growth is meager.  The ‘connectivity’ of HSBC is simply not visible in net fee income, with figures in decline. For all the promises and bravado on cost containment, the bank booked US$9.9 billion in operating costs in 4Q17 - partly due to the UK bank levy - but where the UK is core to HSBC’s business. Finally…

For all the hype, HSBC Holdings PLC (HSBA LN) can hardly eek out a profit in the latest quarter. The hope that rising interest rates would be a boon for HSBC especially has to fade, where growth is meager.  The ‘connectivity’ of HSBC is simply not visible in net fee income, with figures in decline. For all the promises and bravado on cost containment, the bank booked US$9.9 billion in operating costs in 4Q17 - partly due to the UK bank levy - but where the UK is core to HSBC’s business. Finally…

Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

* Weak 4Q17 Results Guidance: 4Q17 pre-tax results missed Street forecasts by 8%. Revenues were 1% light of consensus while costs were 3% higher. Moving capital targets, weaker UK credit, a poorly structured US business,  and higher operational costs from Brexit give us cause for pause as well.* Is a US Deal Imminent Now?: HSBC’s US business operating profit metrics may actually be the absolute worst of any American bank. If nothing is materially done with the US operation in the immediate term…

* Weak 4Q17 Results Guidance: 4Q17 pre-tax results missed Street forecasts by 8%. Revenues were 1% light of consensus while costs were 3% higher. Moving capital targets, weaker UK credit, a poorly structured US business,  and higher operational costs from Brexit give us cause for pause as well.* Is a US Deal Imminent Now?: HSBC’s US business operating profit metrics may actually be the absolute worst of any American bank. If nothing is materially done with the US operation in the immediate term…

Thematic (Sector/Industry)

* Regulator spread letter and LDR changes could prompt aggressive NIM/spread compression at the Bangladeshi banks.  * Higher capital requirements and USD 7.7 bn of NPLs could prompt further EPS reductions and capital raises. <h2>Summary </h2>Bangladesh Bank (the central bank) chronically tries to encourage its commercial banks to narrow their net lending spreads below 5.0%. 2018 is no different. Bangladesh Bank has instructed eight private banks to reduce their interest rate spread to less than 5.0%…

* Regulator spread letter and LDR changes could prompt aggressive NIM/spread compression at the Bangladeshi banks.  * Higher capital requirements and USD 7.7 bn of NPLs could prompt further EPS reductions and capital raises. Summary Bangladesh Bank (the central bank) chronically tries to encourage its commercial banks to narrow their net lending spreads below 5.0%. 2018 is no different. Bangladesh Bank has instructed eight private banks to reduce their interest rate spread to less than 5.0%…

Bangladesh Banks – Harder Line Being Taken

The key for US banks in upcoming results will be the effect of lower corporate taxes on the carrying value of deferred tax assets (DTA). While not a major issue for most banks and especially money center banks, impairments will be meaningful for some. HSBC Finance also stands out here – although technically not a bank - where its DTA are exceptionally high compared with its stated net worth and more so than most all banks in the US.Operationally, what most will be looking for are improvements in…

The key for US banks in upcoming results will be the effect of lower corporate taxes on the carrying value of deferred tax assets (DTA). While not a major issue for most banks and especially money center banks, impairments will be meaningful for some. HSBC Finance also stands out here – although technically not a bank - where its DTA are exceptionally high compared with its stated net worth and more so than most all banks in the US.Operationally, what most will be looking for are improvements in…

US Banks – What to Look for in 4Q17 Results

* Despite bottom-line improvement on a go-forward basis, deferred tax asset (DTA) write-downs are likely at major global financial companies  - beckoning for major 2018 EPS revisions.* Domestic institutions such as, Bank of America (BAC.US), Goldman Sachs (GS.US), and Morgan Stanley (MS.US) stand out with large DTAs in the US.  * Of the international companies with US subsidiaries, the Swiss financials would post shocking results, while HSBC Holdings could have a 25% EPS adjustment, by our…

* Despite bottom-line improvement on a go-forward basis, deferred tax asset (DTA) write-downs are likely at major global financial companies  - beckoning for major 2018 EPS revisions.* Domestic institutions such as, Bank of America (BAC.US), Goldman Sachs (GS.US), and Morgan Stanley (MS.US) stand out with large DTAs in the US.  * Of the international companies with US subsidiaries, the Swiss financials would post shocking results, while HSBC Holdings could have a 25% EPS adjustment, by our…

HSBC Holdings Plc – Likely Getting a Big Hickey From President Trump

United Kingdom

HSBC Holdings plc is the holding company for the HSBC Group. The Company provides a variety of international banking and financial services, including retail and corporate banking, trade, trusteeship, securities, custody, capital markets, treasury, private and investment banking, and insurance.  The Group operates worldwide.

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HSBC Holdings (5 HK)

HSBC – True Color

For all the hype, HSBC Holdings PLC (HSBA LN) can hardly eek out a profit in the latest quarter. The hope that rising interest rates would be a...

Daniel Tabbush

HSBC Holdings Plc – Swing & A Miss

* Weak 4Q17 Results Guidance: 4Q17 pre-tax results missed Street forecasts by 8%. Revenues were 1% light of consensus while costs were 3% higher....

Thomas J. Monaco

Bangladesh Banks – Harder Line Being Taken

* Regulator spread letter and LDR changes could prompt aggressive NIM/spread compression at the Bangladeshi banks. * Higher capital requirements...

Thomas J. Monaco

US Banks – What to Look for in 4Q17 Results

The key for US banks in upcoming results will be the effect of lower corporate taxes on the carrying value of deferred tax assets (DTA). While not...

Daniel Tabbush

HSBC Holdings Plc – Likely Getting a Big Hickey From President Trump

* Despite bottom-line improvement on a go-forward basis, deferred tax asset (DTA) write-downs are likely at major global financial companies -...

Thomas J. Monaco

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