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

It is difficult to be anything but concerned with <a href="https://www.smartkarma.com/entities/516" target="_blank" data-smartkarma-citation="entities:516:1">HSBC Holdings Plc (5 HK)</a> [<a href="https://www.smartkarma.com/entities/21976" target="_blank" data-smartkarma-citation="entities:21976:1">HSBC Holdings Plc (HSBA LN)</a>].  Four fines or settlements come to mind over the past several weeks. One is for HK$400 million for the Hong Kong branch of its Swiss private-banking subsidiary, over the sale of Lehman-linked products. Together with this fine, HSBC Private Bank (Suisse) will have its license to give advice on securities suspended and its license partially suspended to deal in securities. Another fine is for…

It is difficult to be anything but concerned with HSBC Holdings Plc (5 HK) [HSBC Holdings Plc (HSBA LN)].  Four fines or settlements come to mind over the past several weeks. One is for HK$400 million for the Hong Kong branch of its Swiss private-banking subsidiary, over the sale of Lehman-linked products. Together with this fine, HSBC Private Bank (Suisse) will have its license to give advice on securities suspended and its license partially suspended to deal in securities. Another fine is for…

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

* Fundamentals at Standard Chartered Bank (Hong Kong) [SCBHK] have improved over the past several years. However, SCBHK has aggressively pulled on various non-core, low quality sources of revenue in order to buoy Standard Chartered’s (2888.HK/STAN.LN) profits  - making them look better than they otherwise would have.* There is some strain on SCBHK’s capital position. Our burn-down analysis suggests that SCBHK is already close to the 2019 Basel III floor level for Common Equity Tier 1 (CET1) capital. As such, on top of concerns over IFRS 9, Basel III/IV, and regulatory penalties - Standard Chartered may need to worry about capital at risk in its Hong Kong franchise prior to re-instituting a dividend.

* Fundamentals at Standard Chartered Bank (Hong Kong) [SCBHK] have improved over the past several years. However, SCBHK has aggressively pulled on various non-core, low quality sources of revenue in order to buoy Standard Chartered’s (2888.HK/STAN.LN) profits  - making them look better than they otherwise would have.* There is some strain on SCBHK’s capital position. Our burn-down analysis suggests that SCBHK is already close to the 2019 Basel III floor level for Common Equity Tier 1 (CET1) capital. As such, on top of concerns over IFRS 9, Basel III/IV, and regulatory penalties - Standard Chartered may need to worry about capital at risk in its Hong Kong franchise prior to re-instituting a dividend.  

Standard Chartered (Hong Kong) – A Messy Flagship

Thematic (Sector/Industry)

* Margin finance not only remains a concern for the US share market, but the US housing market as well. * Charles Schwab is the latest example of pushing the envelope too far with their clients.As a follow-on to our note "Shanghai-ed by Western Brokers" dated September 2, 2017 where we called out US brokers/investment banks for aggressively lending on margin to high net worth (HNW)/retail investors, we decided to do a little mystery shopping of our own. This afternoon we visited a retail outlet…

* Margin finance not only remains a concern for the US share market, but the US housing market as well. * Charles Schwab is the latest example of pushing the envelope too far with their clients.As a follow-on to our note "Shanghai-ed by Western Brokers" dated September 2, 2017 where we called out US brokers/investment banks for aggressively lending on margin to high net worth (HNW)/retail investors, we decided to do a little mystery shopping of our own. This afternoon we visited a retail outlet…

* Economic Impact: Catalonia has amongst the largest public debts of Spain's regions, and could witness a 25%-30% economic contraction and its unemployment double on secession. Spain accounts for nearly one-third of Catalonia’s exports and could face a trade boycott along with increased tariffs. Already, the Spanish government has begun tightening some economic screws by withholding some funding and making it easier for businesses to relocate in an emergency.* Political Risk of Secession: The…

* Economic Impact: Catalonia has amongst the largest public debts of Spain's regions, and could witness a 25%-30% economic contraction and its unemployment double on secession. Spain accounts for nearly one-third of Catalonia’s exports and could face a trade boycott along with increased tariffs. Already, the Spanish government has begun tightening some economic screws by withholding some funding and making it easier for businesses to relocate in an emergency.* Political Risk of Secession: The…

Chief Economist, Heteronomics

Phil Rush

Chief Economist

Heteronomics

Heteronomics represents a different kind of economics. We believe analysis should delve into the details of what is really going on, rather than using overly simplistic assumptions to quick-sell stories. Independence from myopic institutional pressures allows us to focus on the realities underlying your asset allocation decisions, without the conflicts of the old market structures. Heteronomics targets the themes driving UK asset prices, offering the benefits of depth, independence and ultimately price.

UK-centric macro research

Macroeconomics

<ul><li>The BoE has delivered its first rate hike in a decade. Future moves will respond to its trade-off, with slack and inflation determining timing. I expect May-18 next.</li><li>Rate changes may be absorbed in spreads, which would pressure the MPC to hike faster and further than my already hawkish forecast (every six months back to 2%).</li><li>With a positive output gap potentially building, rates need to return to neutral, but markets place excessive focus on growth over gaps and do not price this.</li></ul>

The BoE has delivered its first rate hike in a decade. Future moves will respond to its trade-off, with slack and inflation determining timing. I expect May-18 next.Rate changes may be absorbed in spreads, which would pressure the MPC to hike faster and further than my already hawkish forecast (every six months back to 2%).With a positive output gap potentially building, rates need to return to neutral, but markets place excessive focus on growth over gaps and do not price this.

BoE: Transmitting Periodic Hawkish Surprises

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 Does Not Impress

It is difficult to be anything but concerned with HSBC Holdings Plc (5 HK) [HSBC Holdings Plc (HSBA LN)]. Four fines or settlements come to mind...

Daniel Tabbush

Standard Chartered (Hong Kong) – A Messy Flagship

* Fundamentals at Standard Chartered Bank (Hong Kong) [SCBHK] have improved over the past several years. However, SCBHK has aggressively pulled on...

Thomas J. Monaco

US Brokers - Chuck Bucks Fueling Housing

* Margin finance not only remains a concern for the US share market, but the US housing market as well. * Charles Schwab is the latest example of...

Thomas J. Monaco

Catalonia Crisis – Break Away Republic

* Economic Impact: Catalonia has amongst the largest public debts of Spain's regions, and could witness a 25%-30% economic contraction and its...

Thomas J. Monaco

BoE: Transmitting Periodic Hawkish Surprises

The BoE has delivered its first rate hike in a decade. Future moves will respond to its trade-off, with slack and inflation determining timing. I...

Phil Rush

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