& Consultancy Services
Exclusive Research By
BANK RESEARCH, WITHOUT THE NOISE.
We provide research and consultancy on banks. Our focus is on what we call “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, finance companies, which can provide insight to more mainstream banks, economies. At the same time, we often look to corporate data, financial metrics, to better gauge bank credit risk. We use what we believe to be the most comprehensive, reliable financials & corporate database, S&P Capital IQ as well as CEIC, for comprehensive economics data.
Compounding Curiosity - Podcast
Asian bank analysis, experiences
2 September, 2021
Recent Bloomberg TV interview
Singapore Money FM Interview
Daniel Tabbush has ~30 years experience analyzing Asia-Pacific banks, including HSBC, Standard Chartered, in addition to thematic work on US banks. He was the Head of Asian Bank research at the number one Asian brokerage CLSA for most of his career, overseeing coverage of 80 banks and 10 analysts in Asia-Pacific.
He has been highly ranked by Asiamoney, The Asset and Bloomberg, as well as by institutional investors focused on Asia. He continues to appear in press interviews with Bloomberg TV, Money FM Singapore, TVB in Hong Kong, and has appeared on CNBC in the past. He maintains a research sharing agreement with GMT Research and has contributed to Asianomics, headed by Dr Jim Walker. Tabbush was an invited speaker on Asian banks at the Independent Research Summit in Hong Kong, during years 2013 and 2014.
Daniel started his own independent bank research and consultancy in 2012, under the banner name Tabbush Report. Since 2014, he has been a member of University of California San Diego Economics Leadership Council (ELC), supporting Economic students at the University through this alumni association, and providing guidance on Economics program develoment. Daniel grew up in Los Angeles, graduated from UCSD in Economics, cum laude and with Phi Beta Kappa honors. He lives with his family in Bangkok, enjoys cooking, running and analyzing banks.
Single page, short concise note on a bank, a country or regional analysis.
Longer note, approximately six to twelve pages, including more detail, charts, tables, focusing on a single bank, a thematic idea, a country or regional analysis.
An agreed upon research report, suggested by client, which can include detailed bank report, country analysis or regional comparative, analysis.
Pre-arranged conference call to discuss specific banks, countries, themes..
A typical annual package will include at least 10-15 Espresso notes, 3-6 Tabbush Reports, several hours of conference calls. Bespoke Research can be worked into package.
Member of Independent Research Forum (IRF)
ASIAN BANK RESEARCH, WITHOUT THE NOISE.
Benign bad loan trends belie surging impairment costs
Many banks in Asia are seeing surging credit costs and despite more meagre growth in bad loans. This is also occurring with banks that have seen little in the way of new lending, including Japan. It is no longer enough to focus on bad loan formation when forecasting, understanding provision expenses.
Some may argue that this is due to new accounting regulation IFRS 9, which requires banks to take total expected credit losses (ECL) over the life of a bad loan.
With another USD1tr package in the US the risk remains that economic malaise will not be as dire as initially expected by the Fed or others. During 2Q20 many US banks – as well as banks globally – have seen substantially lower credit costs compared with 1Q20. What matters more is the trajectory during coming quarters and especially as recovery, re-opening takes holds for most all countries.
The tapestry of China bank malaise typically threads its way through corporate indebtedness, weak financial metrics and slowing economic growth.
We doubt there are many non-believers regarding risks facing corporate China and China’s banks. What may be less clear is how growth in city commercial bank NPLs is soaring, compared with more mainstream commercial banks, or that the distribution of NPLs is worsening toward more loss and doubtful loans.
The leverage that banks have to re-opening, recovery of economies is exaggerated. This is especially when interest rates are low. In a period where margins may be 3%, credit costs of 75bps are not unwieldly. In a period where margins are closer to 2%, the same credit costs are profit-destructive. Then there are credit costs directly.
There have been many false dawns in India during the current economic malaise. The most obvious was when the government announced a recapitalization of banks. Others include election promises or revamping of debt resolution procedures.
But it should be clearer now that without a fundamental reduction in debt, or a change in loan underwriting standards or a meaningful, sustainable resumption of top line growth, bank credit metrics are only likely to weaken.
Singapore banks have revealed a sharp decline in their pass loans over the past two months. It is not something that most normally look at, but it is telling. The pace of decline is sharp and nearly on par with bank experience during late 2015. In 3Q19 the total level of pass loans compared with total loans is lower than most quarters since 1Q09.