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

<ul>
<li>The new excitement of the MS&amp;AD story is the company's commitment to sell down all of its cross-shareholdings and to use proceeds to fund growth and dividends. </li>
<li>ROE is already far higher now than in recent years, and this can continue with rising dividends. </li>
<li>Monthly insurance sales figures give a good window on the core business, with growth rates in May YoY and YTD accelerating.</li>
</ul>


The new excitement of the MS&amp;AD story is the company's commitment to sell down all of its cross-shareholdings and to use proceeds to fund growth and dividends. 
ROE is already far higher now than in recent years, and this can continue with rising dividends. 
Monthly insurance sales figures give a good window on the core business, with growth rates in May YoY and YTD accelerating.


MS&AD Insurance - Sell Stocks to Zero; Drive Growth, Dividends. HFD on Policy Sales, Accelerating

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Mitsubishi UFJ Financial (MUFG) / Event-Driven

<ul>
<li>Today, <a href="https://www.smartkarma.com/entities/sumitomo-mitsui-financial-group-inc" target="_blank" data-smartkarma-citation="entities:217:1" rel="noopener">Sumitomo Mitsui Financial Group (8316 JP)</a> and <a href="https://www.smartkarma.com/entities/mitsubishi-ufj-financial-group" target="_blank" data-smartkarma-citation="entities:218:1" rel="noopener">Mitsubishi UFJ Financial (MUFG) (8306 JP)</a> reported H1 earnings. <a href="https://www.smartkarma.com/entities/mizuho-financial-group-inc" target="_blank" data-smartkarma-citation="entities:219:1" rel="noopener">Mizuho Financial Group (8411 JP)</a> reported yesterday.</li>
<li>Mizuho raised full-year NP guidance by ~5%, passing the Street. SMFG raised its FY NP guidance 12.2%, also beating the Street. MUFG didn't raise guidance but H1 saw 71% progress.</li>
<li>Today, SMFG raised its div, and both SMFG (¥150bn) and MUFG (¥400bn) announced buybacks. Cross-holding unwind progress is waaay lower than we'd like, but capital stronger as a result.</li>
</ul>


Today, Sumitomo Mitsui Financial Group (8316 JP) and Mitsubishi UFJ Financial (MUFG) (8306 JP) reported H1 earnings. Mizuho Financial Group (8411 JP) reported yesterday.
Mizuho raised full-year NP guidance by ~5%, passing the Street. SMFG raised its FY NP guidance 12.2%, also beating the Street. MUFG didn't raise guidance but H1 saw 71% progress.
Today, SMFG raised its div, and both SMFG (¥150bn) and MUFG (¥400bn) announced buybacks. Cross-holding unwind progress is waaay lower than we'd like, but capital stronger as a result.


I Like Big Bank Buybacks And I Cannot Lie

Mitsubishi UFJ Financial (MUFG) / Equity Bottom-Up

<ul>
<li>There may be no imminent yield curve control relief in Japan</li>
<li>MUFG market capitalization is up 2-3x and at a near decade peak level</li>
<li>Without YCC relief maybe the bank's 60% rise in NPLs in the past 4 years is better noticed</li>
</ul>


There may be no imminent yield curve control relief in Japan
MUFG market capitalization is up 2-3x and at a near decade peak level
Without YCC relief maybe the bank's 60% rise in NPLs in the past 4 years is better noticed


MUFG - What if No Yield Curve Control Relief?

<ul>
<li>About 10 days ago I put out a piece saying H1 guidance trends were such that a lot more banks would upgrade guidance before results. </li>
<li>More than two dozen did and the average guidance uplift is VERY high at +59%. The median uplift vs guidance for 35 banks guiding/reporting is +39% for H1. </li>
<li>The big wave of bank earnings is today through late next week. Megas at the end. Stay long banks. Megas. Cheap regionals. </li>
</ul>


About 10 days ago I put out a piece saying H1 guidance trends were such that a lot more banks would upgrade guidance before results. 
More than two dozen did and the average guidance uplift is VERY high at +59%. The median uplift vs guidance for 35 banks guiding/reporting is +39% for H1. 
The big wave of bank earnings is today through late next week. Megas at the end. Stay long banks. Megas. Cheap regionals. 


Japan 2024 H1 Bank Guidance/Results - Better and Better

Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

Thematic (Sector/Industry)

<ul>
<li>New LDP leader and Japanese PM favours interest rate normalisation</li>
<li>This supports our outlook for a strengthening JPY against the USD</li>
<li>The Japanese central bank may now face pressure to raise rates</li>
</ul>


New LDP leader and Japanese PM favours interest rate normalisation
This supports our outlook for a strengthening JPY against the USD
The Japanese central bank may now face pressure to raise rates


Japan

Mitsubishi UFJ Financial Group, Inc. (MUFG) is a holding company established through the merger of Mitsubishi Tokyo Financial Group and UFJ Holdings. As a financial group, the Company provides a variety of financial and investment services including commercial banking, trust banking, international finance, and assets management services.

Mitsubishi UFJ Financial (MUFG) (8306 JP)

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Mitsubishi UFJ Financial (MUFG) (8306 JP)

MS&AD Insurance - Sell Stocks to Zero; Drive Growth, Dividends. HFD on Policy Sales, Accelerating

MS&AD commits to sell down its cross-shareholding to zero, proceeds to fund growth, dividends. Core insurance sales improving, with April and May...

Daniel Tabbush

I Like Big Bank Buybacks And I Cannot Lie

Japan's Three Megabanks reported earnings on 13-14 November. Two raised FY guidance above the street. MUFG did not raise guidance but H1 saw 71%...

Travis Lundy

MUFG - What if No Yield Curve Control Relief?

Maybe there is no imminent yield curve control relief in Japan, making the market cap gains at MUFG questionable, especially against 60% higher bad...

Daniel Tabbush

Japan 2024 H1 Bank Guidance/Results - Better and Better

This AM has a Nikkei headline saying Japan's 3 megabanks will report ¥2.0trln in Net Profit in H1. That compares to ¥894bn last year, and ¥3.3trln...

Travis Lundy

Banking on the BoJ

New Japanese PM's interest rate stance could lead to a stronger JPY against USD. Higher rates will help certain sectors in the market

Rikki Malik

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

MS&AD Insurance - Sell Stocks to Zero; Drive Growth, Dividends. HFD on Policy Sales, Accelerating

MS&AD commits to sell down its cross-shareholding to zero, proceeds to fund growth, dividends. Core insurance sales improving, with April and May...

Daniel Tabbush

I Like Big Bank Buybacks And I Cannot Lie

Japan's Three Megabanks reported earnings on 13-14 November. Two raised FY guidance above the street. MUFG did not raise guidance but H1 saw 71%...

Travis Lundy

MUFG - What if No Yield Curve Control Relief?

Maybe there is no imminent yield curve control relief in Japan, making the market cap gains at MUFG questionable, especially against 60% higher bad...

Daniel Tabbush

Japan 2024 H1 Bank Guidance/Results - Better and Better

This AM has a Nikkei headline saying Japan's 3 megabanks will report ¥2.0trln in Net Profit in H1. That compares to ¥894bn last year, and ¥3.3trln...

Travis Lundy

Banking on the BoJ

​New Japanese PM's interest rate stance could lead to a stronger JPY against USD. Higher rates will help certain sectors in the market

Rikki Malik

New Japanese PM's interest rate stance could lead to a stronger JPY against USD. Higher rates will help certain sectors in the market