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>There is a long period of flat lining loans for large US banks indicative of weak demand that is persistent and risk-aversion by banks. </li>
<li>Large time deposits have swelled and this should continue to 'roll through' banks' income statement with high funding cost growth.</li>
<li>We show about 30 of the largest banks in the US, their profile of high funding costs growth and weak interest income growth; flat loans will not help.</li>
</ul>


There is a long period of flat lining loans for large US banks indicative of weak demand that is persistent and risk-aversion by banks. 
Large time deposits have swelled and this should continue to 'roll through' banks' income statement with high funding cost growth.
We show about 30 of the largest banks in the US, their profile of high funding costs growth and weak interest income growth; flat loans will not help.


US Banks - Flat Loans ~USD6.7 Trillion for Almost Every Week for Nearly 2 Years

Equity Research Analyst - Long-Short

Raj S, CA, CFA

Artoval Advisors

Art’o’val stands for Art of Valuation. Artoval Advisors LLP is a professionally run advisory firm catering to various financial advisory services including Valuation, Investment Research, Training, Accounting, CFO Services and other ancillary services.

We are passionate about what we do and strongly believe in working with our clients as their extended teams. With Artoval Advisors as their trusted partner, our clients find it easy to achieve efficiency in service delivery without compromising on quality.

True Art of Valuation

<ul>
<li>
Large regional banks in the US have been troubled in 2023 by the proposed “Basel III Endgame” regulations, asset quality issues and earning pressure in terms of the high COF</li>
<li>
We believe these factors have made the sector more cyclical and vulnerable to even a mild recession scenario in 2024-25</li>
<li>
We are particularly weary of names at regulatory risk (like USB), and those with higher exposures to CRE</li>
</ul>



Large regional banks in the US have been troubled in 2023 by the proposed “Basel III Endgame” regulations, asset quality issues and earning pressure in terms of the high COF

We believe these factors have made the sector more cyclical and vulnerable to even a mild recession scenario in 2024-25

We are particularly weary of names at regulatory risk (like USB), and those with higher exposures to CRE


Equity Strategy: US Regional Banks: Not Out of the Woods Yet

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Market dynamics remain largely healthy, and new developments continue to point to improving risk appetites. Still, Energy (XOP, RYE) is the only cyclical value Sector that has been able to decisively break to new price highs, while others remain in congestion. Therefore, our outlook remains neutral yet constructive overall, and we see pullbacks as buying opportunities.Charts highlighted: XLF, Copper, IWM, MCHI, KRE, XLB, S&amp;P 500, CNQ, SU, IMO, CVE, OVV, COP, EOG, PXD, OXY, HES, DVN, CLR, CFR, PB, BOKF, IBTX, TBK, BSVN, BAC, WFC, USB, PNC, TFC, FITB, KEY, RF, and CMA

Market dynamics remain largely healthy, and new developments continue to point to improving risk appetites. Still, Energy (XOP, RYE) is the only cyclical value Sector that has been able to decisively break to new price highs, while others remain in congestion. Therefore, our outlook remains neutral yet constructive overall, and we see pullbacks as buying opportunities.Charts highlighted: XLF, Copper, IWM, MCHI, KRE, XLB, S&amp;P 500, CNQ, SU, IMO, CVE, OVV, COP, EOG, PXD, OXY, HES, DVN, CLR, CFR, PB, BOKF, IBTX, TBK, BSVN, BAC, WFC, USB, PNC, TFC, FITB, KEY, RF, and CMA

U.S. Equity Strategy: Risk Appetites Improving; Watching Financials, Copper, US Dollar

Last week's FOMC announcement was more hawkish than expected, and the market took the news in stride. Market dynamics have improved significantly since the announcement, which has us inching toward an outright bullish outlook; we are just waiting for price breakouts from cyclical areas including small-caps (IWM), Financials (XLF), and Energy (XOP).Charts highlighted: COP, EOG, DVN, CLR, FANG, MRO, XEC, COG, AR, MUR, USB, PNC, FITB, KEY, RF, CMA, SIVB, WAL, EWBC, ZION, PACW, UMPQ, FHB, and CATY.

Last week's FOMC announcement was more hawkish than expected, and the market took the news in stride. Market dynamics have improved significantly since the announcement, which has us inching toward an outright bullish outlook; we are just waiting for price breakouts from cyclical areas including small-caps (IWM), Financials (XLF), and Energy (XOP).Charts highlighted: COP, EOG, DVN, CLR, FANG, MRO, XEC, COG, AR, MUR, USB, PNC, FITB, KEY, RF, CMA, SIVB, WAL, EWBC, ZION, PACW, UMPQ, FHB, and CATY.

10-Yr Treasury Yield Breaking Out; Downgrading U.S. Consumer Staples and Utilities To Underweight

The main lever for US banks and others is credit costs. This is clear in data during the three quarters thus far this year. After the closing of economies credit costs soared and with the re-opening they have collapsed. But operationally US banks can also benefit from the steepening yield curve. The spread of 10-year US Treasuries over 1-year paper continues to expand. With vaccines, the Biden win and a better understanding of the cost-benefit on how governments reacted early this year, there is likely more risk of the yield curve remaining steep.

The main lever for US banks and others is credit costs. This is clear in data during the three quarters thus far this year. After the closing of economies credit costs soared and with the re-opening they have collapsed. But operationally US banks can also benefit from the steepening yield curve. The spread of 10-year US Treasuries over 1-year paper continues to expand. With vaccines, the Biden win and a better understanding of the cost-benefit on how governments reacted early this year, there is likely more risk of the yield curve remaining steep.

United States

Regions Financial Corporation is a regional multi-bank holding company.  The Company provides mortgage banking, credit life insurance, leasing, commercial accounts receivable factoring, specialty mortgage financing, and securities brokerage services.  Regions provides banking services throughout the South, Midwest, and Eastern United States.

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Regions Financial (RF US)

US Banks - Flat Loans ~USD6.7 Trillion for Almost Every Week for Nearly 2 Years

US loans are flat for most all weeks for nearly two years, and funding costs have surged, putting net interest income under pressure, and this...

Daniel Tabbush

Equity Strategy: US Regional Banks: Not Out of the Woods Yet

US Regional Banks have been in turmoil for the last several quarters with valuations down by 40% or more on average. We think this is may not yet...

Raj S, CA, CFA

U.S. Equity Strategy: Risk Appetites Improving; Watching Financials, Copper, US Dollar

Financials (XLF) are on the cusp of a breakout above $39, while copper is on the cusp of a breakout above $4.38; breakouts above resistance would...

Vermilion Research

10-Yr Treasury Yield Breaking Out; Downgrading U.S. Consumer Staples and Utilities To Underweight

The 10-year Treasury yield broke above the key 1.38% resistance level last week, a bullish signal for the broad equity market and also a bullish...

Vermilion Research

US Banks – Borrow Short, Lend Long

While credit costs will remain a key focus for US banks over the coming quarters, we must not lose sight of the steepening yield curve and what it...

Daniel Tabbush

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