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>Weekly data to 23 July in the US shows 30 year fixed mortgage rates hitting new highs at 7.23%</li>
<li>The past two weeks show mortgage rate increases accelerating, and up 45bps from 20 July data</li>
<li>Mortgage loan volume index is approaching 1990, weekly purchases index continues downward</li>
</ul>


Weekly data to 23 July in the US shows 30 year fixed mortgage rates hitting new highs at 7.23%
The past two weeks show mortgage rate increases accelerating, and up 45bps from 20 July data
Mortgage loan volume index is approaching 1990, weekly purchases index continues downward


US Banks - Weekly Data: Mortgage Loan Rates A New High, Loan Volume Index Approaches 1990 Further

<ul>
<li>HFD for US small banks shows USD2.6bn new CRE loans in week vs USD3.4bn new total loans</li>
<li>US small banks have CRE loans at 2.9x capital vs 2.5x in recent periods and less provisions</li>
<li>Large term deposits are up from 8.5% to 14.2% of loans from trough to most recent week </li>
</ul>


HFD for US small banks shows USD2.6bn new CRE loans in week vs USD3.4bn new total loans
US small banks have CRE loans at 2.9x capital vs 2.5x in recent periods and less provisions
Large term deposits are up from 8.5% to 14.2% of loans from trough to most recent week 


US Small Banks - New HFD Shows 76% of New Loans Are CRE in Recent Week | CRE Loans at 2.9x Capital

<ul>
<li>1Q23 earnings were 130% of consensus annualized, 2Q23 is 104% consensus annualized</li>
<li>USB saw its quarterly income/FY23 consensus move from 27% to 21% from 1Q23 to 2Q23</li>
<li>COLB, WAL are at lowest FY23 consensus achievement rates: 21% and 41% during 1H23</li>
</ul>


1Q23 earnings were 130% of consensus annualized, 2Q23 is 104% consensus annualized
USB saw its quarterly income/FY23 consensus move from 27% to 21% from 1Q23 to 2Q23
COLB, WAL are at lowest FY23 consensus achievement rates: 21% and 41% during 1H23


US Banks - Qtly Profit Falls As % Of FY23 Consensus, Some More Than Others: USB, PB, COL, WAL, AEX

<ul>
<li>High-Frequency data for US mortgage loan applications, lending and LLR are a red flag</li>
<li>US large banks' loan growth is decelerating sharply, and LLR rising fast for many weeks</li>
<li>Banks face low or negative net interest income growth, as credit costs rise substantially</li>
</ul>


High-Frequency data for US mortgage loan applications, lending and LLR are a red flag
US large banks' loan growth is decelerating sharply, and LLR rising fast for many weeks
Banks face low or negative net interest income growth, as credit costs rise substantially


US Banks - HFD Mtg Vol Near 1990 Level, Net Int Inc Delta Can Be Negative & With Surging Provisions

Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

<ul>
<li>Interest rate risk in the system increased with the Fed’s steep interest rate hikes and due to the opt-out for many US banks on the AFS securities market-to-market capital hit</li>
<li>Uninsured and concentrated deposits, at the first hint of bank trouble, can take flight very quickly especially in the case of concentrated, key elements of the Silicon Vally Bank collapse</li>
<li>We believe that it is premature to look for buy opportunities in US banks, although we believe that the largest US banks are sound in terms of their balance sheets</li>
</ul>


Interest rate risk in the system increased with the Fed’s steep interest rate hikes and due to the opt-out for many US banks on the AFS securities market-to-market capital hit
Uninsured and concentrated deposits, at the first hint of bank trouble, can take flight very quickly especially in the case of concentrated, key elements of the Silicon Vally Bank collapse
We believe that it is premature to look for buy opportunities in US banks, although we believe that the largest US banks are sound in terms of their balance sheets


US Bank Sector Stress – Old Fashioned Risks and a Regulatory Loophole Meet the Digital Age

United States

KeyCorp is a financial services holding company.  The Company provides a wide range of retail and commercial banking, commercial leasing, investment management, consumer finance and investment banking products and services to individual, corporate and institutional clients.

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Keycorp (KEY US)

US Banks - Weekly Data: Mortgage Loan Rates A New High, Loan Volume Index Approaches 1990 Further

New weekly data for US mortgage loan applications and mortgage loan rates, suggest major deterioration in home lending for US banks during 3Q23....

Daniel Tabbush

US Small Banks - New HFD Shows 76% of New Loans Are CRE in Recent Week | CRE Loans at 2.9x Capital

New HFD shows new CRE loans at 76% of total new loans, for small US banks. Their CRE loans/capital is rising and LLR/CRE loans is low, falling. Off...

Daniel Tabbush

US Banks - Qtly Profit Falls As % Of FY23 Consensus, Some More Than Others: USB, PB, COL, WAL, AEX

US bank profit downgrades can be big, looking at FY23 consensus earnings achievement rates in 1Q23, 2Q23. Many banks are at less than 50% of FY23...

Daniel Tabbush

US Banks - HFD Mtg Vol Near 1990 Level, Net Int Inc Delta Can Be Negative & With Surging Provisions

High frequency data in the US suggests bank earnings will be weak in coming quarters. Weekly mtg loan vol data nearing 1990 levels, weekly loan...

Daniel Tabbush

US Bank Sector Stress – Old Fashioned Risks and a Regulatory Loophole Meet the Digital Age

US bank system strains reflects heightened interest rate risk, exacerbated by uninsured and concentrated deposits at a time of sharply rising...

Victor Galliano

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