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>
<a href="https://www.smartkarma.com/entities/hdfc-bank-ltd-4b6b7a92-9087-468d-9dbe-ab169e77f014" target="_blank" data-smartkarma-citation="entities:558:1" rel="noopener">HDFC Bank (HDFCB IN)</a> released its first results since its amalgamation. This can make comparatives difficult where historicals are not adjusted, except for some QoQ items. </li>
<li>We use Dupont Analysis to better understand how the newly amalgamated bank looks now compared with the past, which generally shows a more profitable bank at the core.  </li>
<li>Credit costs, tax expenses are also positives, with the former improving 27bps YoY and the latter improving 23bps YoY. Investment income is a major positive driver in Sep 23 quarter.</li>
</ul>



HDFC Bank (HDFCB IN) released its first results since its amalgamation. This can make comparatives difficult where historicals are not adjusted, except for some QoQ items. 
We use Dupont Analysis to better understand how the newly amalgamated bank looks now compared with the past, which generally shows a more profitable bank at the core.  
Credit costs, tax expenses are also positives, with the former improving 27bps YoY and the latter improving 23bps YoY. Investment income is a major positive driver in Sep 23 quarter.


HDFC Bank - 1st Results After Amalgamation | Dupont Analysis For Comparatives | Credit Cost Decline

Life Insurance  of India / Equity Bottom-Up

<ul>
<li>LICI has significant 62% market share of new business premiums with 92% coverage of all districts in the country, compared with 72% for all of the private sector combined. </li>
<li>Long track record of operations since 1956 and strong growth, with recent years seeing exceptional strength in net profit, and with ROE reaching 148%. </li>
<li>Well maintained SG&amp;A costs with revenue growth exceeding policy benefits growth, with strong investment returns, especially in FY23. 1Q24 also shows continued operational strength, in a hugely under-penetrated market. </li>
</ul>


LICI has significant 62% market share of new business premiums with 92% coverage of all districts in the country, compared with 72% for all of the private sector combined. 
Long track record of operations since 1956 and strong growth, with recent years seeing exceptional strength in net profit, and with ROE reaching 148%. 
Well maintained SG&amp;A costs with revenue growth exceeding policy benefits growth, with strong investment returns, especially in FY23. 1Q24 also shows continued operational strength, in a hugely under-penetrated market. 


LICI - 62% Mkt Share, Covers 92% of India, 148% ROE, Under-Penetrated, Many Operational Strengths

<ul>
<li>Cost at PNB are high and rising, a major drag on its ROA and RORWA, which largely offsets better credit metrics. </li>
<li>There are many market positives in India banks, but relative to all large peers, <a href="https://www.smartkarma.com/entities/punjab-national-bank" target="_blank" data-smartkarma-citation="entities:542:1" rel="noopener">Punjab National Bank (PNB IN)</a><span>has the lowest</span> RORWA </li>
<li>There is no LDR expansion at PNB. NIM is languishing. Its high 20% govt loans/total loans is high, with 2 peers' even higher, but better returns. </li>
</ul>


Cost at PNB are high and rising, a major drag on its ROA and RORWA, which largely offsets better credit metrics. 
There are many market positives in India banks, but relative to all large peers, Punjab National Bank (PNB IN)has the lowest RORWA 
There is no LDR expansion at PNB. NIM is languishing. Its high 20% govt loans/total loans is high, with 2 peers' even higher, but better returns. 


Punjab National Bank - Weak Returns, High Costs, High Govt Loans, No LDR Expansion, NIM Down QoQ

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

Power Grid Corporation Of India / Event-Driven

<ul>
<li>The rebalance of the <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY</a>, <a href="https://www.smartkarma.com/entities/nse-nifty-next-50-index" target="_blank" data-smartkarma-citation="entities:36053:1" rel="noopener">Nifty Next 50</a>, <a href="https://www.smartkarma.com/entities/nse-nifty-bank-index" target="_blank" data-smartkarma-citation="entities:26811:1" rel="noopener">NSE Nifty Bank</a>, <a href="https://www.smartkarma.com/entities/cpse-etf" target="_blank" data-smartkarma-citation="entities:28191:1" rel="noopener">CPSE ETF (CPSEBE IN)</a> and a bunch of other indices will be implemented at the close of trading today.</li>
<li>Depending on the index, there are constituent changes, changes to the number of shares and free float, plus capping changes. Put together, there is a lot of flow and impact.</li>
<li>The round-trip trade will be in excess of US$1bn. Add in the futures &amp; options expiry and volumes will be extremely high in the last 30 minutes of trading.</li>
</ul>


The rebalance of the NIFTY, Nifty Next 50, NSE Nifty Bank, CPSE ETF (CPSEBE IN) and a bunch of other indices will be implemented at the close of trading today.
Depending on the index, there are constituent changes, changes to the number of shares and free float, plus capping changes. Put together, there is a lot of flow and impact.
The round-trip trade will be in excess of US$1bn. Add in the futures &amp; options expiry and volumes will be extremely high in the last 30 minutes of trading.


NIFTY Family Index Rebalance: Flows at the Close Today + F&O Expiry

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Union Bank Of India / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/union-bank-of-india" target="_blank" data-smartkarma-citation="entities:546:1" rel="noopener">Union Bank Of India (UNBK IN)</a> is looking to raise US$301m from its qualified institutional placement (QIP). Included in the deal is an option to effectively double its base deal. </li>
<li>The deal is a relatively large one to digest with the base deal alone representing 21.1 days of three months ADV. </li>
<li>That being said, the deal here is a very well flagged one with the firm having earlier reported to look to do so to boost its free float.</li>
</ul>



Union Bank Of India (UNBK IN) is looking to raise US$301m from its qualified institutional placement (QIP). Included in the deal is an option to effectively double its base deal. 
The deal is a relatively large one to digest with the base deal alone representing 21.1 days of three months ADV. 
That being said, the deal here is a very well flagged one with the firm having earlier reported to look to do so to boost its free float.


Union Bank of India QIP - Well-Flagged Deal, Recent Momentum Has Been Strong

India

Punjab National Bank provides financial services such as corporate and personal banking, industrial finance, agricultural finance, financing of trade and international banking. The Company provides services to domestic conglomerates, medium and small industrial units, exporters, non-resident Indians and multinational companies.

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Punjab National Bank (PNB IN)

HDFC Bank - 1st Results After Amalgamation | Dupont Analysis For Comparatives | Credit Cost Decline

Fist earnings results since amalgamation and they are strong. Dupont Analysis may be best way to view how bank is changing, where historicals are...

Daniel Tabbush

Punjab National Bank - Weak Returns, High Costs, High Govt Loans, No LDR Expansion, NIM Down QoQ

PNB is seeing rising operating costs, languishing NIM, stagnant LDR. Its high government loans may be a key burden on returns. Credit cost decline...

Daniel Tabbush

NIFTY Family Index Rebalance: Flows at the Close Today + F&O Expiry

The rebalance of the NIFTY family of indices will be implemented at the close today. The round-trip trade is around US$1bn and volumes at the close...

Brian Freitas

Union Bank of India QIP - Well-Flagged Deal, Recent Momentum Has Been Strong

Union Bank Of India (UNBK IN) is looking to raise US$301m from its qualified institutional placement (QIP). Included in the deal is an option to...

Clarence Chu

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

HDFC Bank - 1st Results After Amalgamation | Dupont Analysis For Comparatives | Credit Cost Decline

Fist earnings results since amalgamation and they are strong. Dupont Analysis may be best way to view how bank is changing, where historicals are...

Daniel Tabbush

LICI - 62% Mkt Share, Covers 92% of India, 148% ROE, Under-Penetrated, Many Operational Strengths

LICI has seen strong growth in profit, with costs well contained, and policy revenue and investment income well exceeding policy benefits. High mkt...

Daniel Tabbush

Punjab National Bank - Weak Returns, High Costs, High Govt Loans, No LDR Expansion, NIM Down QoQ

PNB is seeing rising operating costs, languishing NIM, stagnant LDR. Its high government loans may be a key burden on returns. Credit cost decline...

Daniel Tabbush

NIFTY Family Index Rebalance: Flows at the Close Today + F&O Expiry

The rebalance of the NIFTY family of indices will be implemented at the close today. The round-trip trade is around US$1bn and volumes at the close...

Brian Freitas

Union Bank of India QIP - Well-Flagged Deal, Recent Momentum Has Been Strong

Union Bank Of India (UNBK IN) is looking to raise US$301m from its qualified institutional placement (QIP). Included in the deal is an option to...

Clarence Chu