Winners' circle: 2015 Country Awards

BANGLADESH

BEST BANK

City Bank

*This article has been corrected to note that Moody's said that ongoing political unrest was credit negative for the country, and that the ratings agency kept its rating stable in April.

CHINA

BEST BANK/BEST FX BANK

Industrial and Commercial Bank of China [ICBC]

ICBC recently completed the acquisition of a majority stake in Turkey's Tekstil Bankasi and snapped up the UK subsidiary of South Africa's Standard Bank Group earlier this year. Its acquisition of a stake in Taiwan's Bank Sinopac is pending. The bank opened a branch in Kuwait in September and in November won approval for a banking license in Mexico. As a result, ICBC now has a presence in 42 countries — the widest coverage of any Chinese bank.

The largest bank in the world in terms of total assets and market capitalisation, ICBC posted a net profit of Rmb276 billion ($45 billion) in 2014, up 5.1% on the previous year.

In the first quarter ICBC's non-performing loans edged up to 1.29% from 1.13% at the end of 2014 and 0.94% at the end of 2013, according to data provider SNL. But despite declines in revenue and net profit, the bank still beat performance forecasts, recording an 8.3% annual increase in net commission income and an 18.4% year-on-year increase in its corporate wealth management business.

ICBC is a huge institution still capable of the small and meaningful gesture, evident in the handholding of high net-worth clients as they seek opportunities offshore. Its private banking arm regularly arranges overseas investment inspection trips for its mainland Chinese clients. It counsels such clients on the tax implications of foreign investment and often promotes investment in its own overseas projects, adding a layer of assurance. It is the first bank in China to establish renminbi-clearing operations in several overseas markets, including Luxembourg, Singapore, Canada, Qatar, and Thailand.

ICBC has said it will focus on loan provisions to small- and medium-sized enterprises, in line with central government policy to support innovation and entrepreneurialism. Outstanding individual loans in the period under review amounted to Rmb2.7 trillion, while outstanding SME loans reached Rmb1.7 trillion. The bank is focused on maintaining healthy loans, but acknowledged facing a challenging period ahead with respect to NPLs as the rate of national economic growth slows and exposure to potential defaults increases.

The bank has 465 million retail customers and has become a credit card powerhouse, issuing more than 100 million credit cards — the third-largest credit card issuer in the world.

In foreign exchange ICBC topped the domestic composite and spot composite rankings for all of last year and in the first quarter of 2015, according to the China Foreign Exchange Trade System's Interbank FX Market LP monthly report. In 2014 alone ICBC accounted for 11.64% of the spot and 8.56% of the forward/swaps market.

It is an industry leader in both the domestic interbank market and the retail renminbi/foreign exchange business, capable of continuous trading operations between Beijing, New York, and London. In addition, the bank now provides a range of forward and swap trades to corporate clients on its e-banking platform. Since June of last year the bank's corporate clients are able to sell forex/renminbi options to the bank, a product offering considered somewhat innovative in the China market.

BEST DCM

China Construction Bank

CCB takes home the Best DCM house prize on the strength of both the volume and diversity of its fixed income practice.

In the period under review the state-owned bank was No. 1 in terms of commercial paper issuance, ranking second for domestic corporate bond offerings and second overall in the China-specific bond market category.

From June 1 2014 to May 31 2015, the bank underwrote 138 corporate bonds worth Rmb85 billion ($13.8 billion) and eight financial bonds valued at RMB19.7 billion ($3.17 billion), according to Bloomberg data.

What sets the bank apart has been its efforts to lift the compliance level of its tenors and the ability to attract multiple lines of quality buyers to its debt offerings, despite rising concerns about the credit default risks in China. Thanks to its large scale and strong capital position, CCB avoided many of the difficulties smaller players encountered amid the economic slowdown.

The default of state-owned power transformer manufacturer Tianwei in April was a key test of CCB's capabilities. As lead underwriter of the company's high yield notes, it was left to the bank to consider measures to protect investors' interests. Toward the end of April state media reported that CCB agreed to provide a loan to the company to avert what would have been a precedent-setting default.

China's second-largest bank after ICBC, CCB said it would sell roughly Rmb60 billion of onshore and offshore tier-2 securities in 2015. Already it has made a splash by selling Asia’s largest Formosa bond, as renminbi-denominated bonds issued in Taiwan are known. In May, the bank also issued the year's first Basel III-compliant tier-2 capital bonds, valued at $2 billion with 10-year maturity — the largest Reg S-only tier-2 offering by a Chinese bank.

In November 2014 CCB's Hong Kong unit, CCB Asia, raised Rmb3.3 billion ($539 million) via a Formosa bond. It was the first four-tranche renminbi bond in Taiwan and the first from a Chinese bank with a 10-year tenor. The rarity of the tier-3-compliant note attracted Rmb13.7 billion in orders from 142 lines, allowing the bank to snip the yield to 4.95%.

CCB's involvement in the dim sum bond market also helps to differentiate the lender. Early this year, the bank was joint book-runner alongside ICBC and Standard Chartered as ANZ became the first foreign bank to issue Basel lll-compliant offshore renminbi  bonds.

Goldman Sachs said China's bond market, including public and private debt, is now the third largest in the world on Rmb36 trillion ($4 trilion). According to Bloomberg data, CCB's has a 7.4% domestic share.

BEST INVESTMENT BANK, BEST ECM HOUSE, BEST BROKER

CITIC Securities

Emboldened by its own massive financial restructuring in August and invigorated by the launch of the Shanghai-Hong Kong Stock Connect programme in November, Citic saw its brokerage, asset management and underwriting business post significant gains in the period under review.

Citic’s mainland brokerage arm, Shenzhen-based Citic Securities, topped the domestic equity-linked league tables, excluding self-led deals, capturing 11.2% of the market on 39 deals worth Rmb59 billion ($9.5 billion). The broker reported a net profit of Rmb11.3 billion for 2014 — a 109% increase over 2013.

According to the company’s own data, in 2014 it completed 40 A-share lead underwriting projects, representing a year-on-year increase of 150%, with an aggregate lead underwriting amount of Rmb96 billion.

In terms of performance, it is often difficult to distinguish between Citic Group, the state-owned mainland Chinese conglomerate, and Citic Ltd, its Hong Kong-listed subsidiary. Standard & Poor’s crediting ratings agency treats Citic Ltd as indistinguishable from Citic Group, citing considerable overlap of liabilities, assets and management.

Following its financial restructuring last year, which saw Citic Ltd acquire 100% of the total listed shares of Citic Corp from Citic Group in a transaction worth a total HK$287 billion, Citic's key role as a facilitator of Chinese financial reforms has become ever more pronounced, making its selection as the recipient of FinanceAsia's 2015 awards for best China ECM house, investment bank, and brokerage a no-brainer. 

It retained its title as China’s top-ranked securities company in 2014 on total revenue of RMB39.5 billion, a 95% increase on 2013.

Citic Securities, China's largest broker by market value, has dominated mainland capital markets since a moratorium on initial public offerings was lifted in late 2013. At the end of last year, the market capitalization of its listed clients accounted for more than 80% of the A-share market.

Citic was lead underwriter on five IPOs in the period under review, raising an aggregate $2.61 billion, according to data the bank provided to FinanceAsia and confirmed by independent sources. The bank also underwrote 17 private share transactions worth a total $33.8 billion.

Having executed on it own complex financial restructuring, the bank now has more of the experience needed to help SOEs stand up to the rigours of external scrutiny and to become more market-oriented. Citic’s restructuring, widely viewed as a model for SOE reform, was executed in five months, including shareholder and regulatory approvals.

Citic’s investment banking and M&A advisory business, perhaps its strongest arm given the bank's expansive and diverse business network in China, played a key advisory role in China Minmetals's acquisition of the Las Bambas copper mine and Shougang Group's IPO. It was also advisor on Sinopec Sales Co's minority stake sale under a mixed ownership scheme.

HONG KONG

BEST BANK, BEST INVESTMENT BANK, BEST FX BANK, BEST ECM HOUSE, BEST DCM HOUSE, BEST BROKER

HSBC

BEST CHINESE BANK IN HONG KONG

BEST CHINESE FX BANK IN HONG KONG 

Bank of China (Hong Kong)

BEST CHINESE BROKER IN HONG KONG 

BEST CHINESE ECM HOUSE IN HONG KONG 

CITIC CLSA

Bank of China International 

 

BOCI used its fully-fledged DCM platform to execute deals for a diverse range of issuers during the review period. Its untrammelled access to Chinese investors often helped ensure the success of several deals despite choppy markets.

Deal credentials include acting as joint global coordinator and bookrunner on China National Offshore Oil Corporation’s $3.8 billion triple-tranche debt offering and China Cinda’s $3 billion dual-tranche offering.

In terms of developing the markets, BOCI was also sole global coordinator of Bank of China’s $6.5bn 6.75% additional tier-1 perpetual preferred shares. This issue notched up several firsts including the global debt market’s biggest-ever single tranche dollar bank capital sale.

Another first was China Orient Asset Management’s $1 billion 3.75% five-year and 5.00% 10-year senior bond offering, drawing down from the first medium-term note programme established by asset management in China.  BOCI was sole global coordinator, joint lead manager and bookrunner on the deal.

In the dim sum bond market, BOCI advised China Minmetals’s Rmb2 billion 4.25% 3-year senior bond offering was one of the few Chinese issuers which tapped the international market directly using NDRC approval and NDRC approval and benefits from the direct onshore entity issuance structure. It was the first comeback of the issuer with senior notes to the CNH bond market since March 2013 achieving 2.75x oversubscription. BOCI was joint global coordinator, joint lead manager and bookrunner on the deal.

BOCI also helped issuers time volatile markets. In the case of China Huarong Asset Management’s $3.2 billion triple-tranche bond in January it priced each tranche tighter than initial price guidance, even as the broader Chinese market was rocked by unprecedented default concerns.

BOCI was also mandated joint bookrunner for Chinese developer Times Property’s $280 million five-year bond in March, neatly capturing the improvement in investor sentiment towards the Chinese housing sector after a succession of Chinese policy rate cuts.

KOREA

BEST BANK

Shinhan Financial

Shinhan demonstrated superior performance across a range of indicators, including its financials, growth in fee income, and its support for Korean companies abroad.

Shareholders seemingly agreed: the firm’s market capitalisation grew to be the biggest in Korea’s financial sector, overtaking rivals Hana Bank and KB.

Shinhan Bank has the lowest NPL ratio of the big banks, at 1.03%, and the highest capital adequacy ratio, at 13.35% for tier-1 capital.

The bank is also pursuing a strategy of socially responsible growth; it remains to be seen how much of this is marketing and how much of it is real, but so far sustainable lending hasn’t hurt the bottom line: profits before tax grew last year by 6.24% to W1.8 trillion, and return on equity expanded year-on-year by over 3% to 7.5%.

For both social and commercial reasons, the bank has extended its business to family-run businesses and small enterprises, which now account for 70% of its loan book. But the biggest source of new profits is from foreign exchange.

This reflects Shinhan’s move to help Korean companies succeed in overseas market. Its so-called incubation centre in Vietnam helps Korean companies operating there with everything from office space to tax advice to local market research and Shinhan plans to roll this service out to other markets in Southeast Asia. It is targeting entrepreneurs and small companies, many of which are suppliers to the country’s big industrial conglomerates, or chaebol, but which also need to offshore production or find new markets.

BEST INVESTMENT BANK

KDB Daewoo Securities

This past year has seen KDB Daewoo Securities achieve breakthroughs in ECM, M&A and debt.

In the equity space, KDB Daewoo served as lead manager on Cheil Industries’s $1.4 billion IPO. Cheil Industries is in practice (if not in name) the holding company for Samsung Group. It is the vehicle through which the Lee family, via heir Lee Jaeyong, is expected to retain control over the corporate empire.

This was the biggest Korea IPO in four years, the second largest in Korean history, and attracted huge interest from global investors. Although demand was strong, the investment bank also had to ensure the restructuring of Samsung Group and its main shareholders would be sound.

In M&A, KDB Daewoo continued to extend its business to more cross-border deals. Among these was the completion in September of Hansol Paper’s acquisition of Dutch firm Telrol for €38 million. KDB Daewoo not only advised the buyer but also provided financing and post-merger support. This is the first Korean outbound deal solely advised by a Korean investment bank.

Finally, while KDB Daewoo isn’t the biggest underwriter in the local bond market, it notched another milestone with a small but innovative deal for ICBC Asia, a Hong Kong-based affiliate of China’s ICBC. This private placement saw Korean institutional investors snap up ICBC debt for its higher yields, with the help of KDB Daewoo, which swapped the issue into dollars from renminbi. ICBC Asia was able to place Rmb180 million worth of yuan-denominated bonds into the Korean market — a first.

MALAYSIA

BEST BANK

Public Bank

Being a conservative bank is not a sin and in fact, it is one of the main reasons why Public Bank has once again managed to cement its position as FinanceAsia’s best bank for Malaysia for the 17^th consecutive year.

Public Bank, Malaysia’s third largest bank by assets, continues to achieve the best in net return-on-equity (19.9% for 2014) while maintaining the lowest gross impaired loan ratio of 0.6% and cost-to-income ratio of 30% in the industry last year. All these factors have enabled the group to rank highly amongst its banking peers.

In 2014, Public Bank registered another set of commendable results with a record net profit attributable to shareholders of M$4.52 billion ($1.26 billion), representing 11.2% growth from 2013. For the first quarter of 2015, the bank’s net profit grew by a commendable 15.2% year-on-year to M$1.17 billion. Unit trust business, bancassurance, banking services and investment income have contributed to its income growth.

Apart from that, Public Bank continued to register growth in its loan book and deposit taking activities. The group’s domestic loans grew by 10.5% to M$228.34 billion end-2014 which was higher than the industry’s growth rate of 8.7%. As a result, domestic loans market share improved to 17.2% from 16.9% a year ago. Moreover, the bank’s total customer deposits grew by 10.2% in 2014 to M$276.54 billion end-2014, outpacing the domestic banking industry’s growth rate of 7.6%.

For funding purposes, Public Bank will continue to launch attractive campaigns to reward and attract both new and existing retail customers to place more funds with the group.

Public Bank and its financial arm, Public Islamic Bank launched a joint campaign ‘PB FD Xtra’ for six months from September 1. Customers who participated in the campaign earned promotional interest for the first six months and subsequently, higher interest if they rollover their placements for another six months. The campaign, which has been extended to June 30 this year due to overwhelming response, has successfully brought in M$14.9 billion in deposits as at the end-March.

BEST INVESTMENT BANK, BEST ECM HOUSE, BEST DCM HOUSE, BEST FOREIGN EXCHANGE BANK, BEST BROKER
 

CIMB

CIMB, the nation’s second-largest lender by assets, seals its position as FinanceAsia’s top Malaysian investment bank, with sizable presence in both in ECM and DCM, as well as securing a new Best Broker title, defying ongoing domestic market challenges.

The macroeconomic factors that once fuelled Malaysia and its economy — strong ringgit and a sustained oil price — have reversed and are now weighing heavily on the nation and its capital market activity. By mid-March, for example, the ringgit has slid to a low of M$3.73 per dollar and crude oil price went to a low of $45.19 per barrel.

Despite the challenges, CIMB successfully led and marketed ECM deals, raising a total of M$18.7 billion during the period under review, higher than the M$13 billion raised in the last corresponding period, according to Dealogic data. Also, the bank was involved in seven out of the 10 largest Malaysian ECM deals. The landmark deals include Public Bank’s M$4.8 billion rights issue, which was the largest rights issue in Malaysia since 2002; Bumi Armada’s (rights issue and block trade combined) M$2.6 billion secondary offerings, the largest oil and gas fundraising in Southeast Asia in 2014; and Malakoff’s M$3.2 billion IPO, the largest domestic IPO year-to-date.

As for DCM, CIMB remains unrivaled for the last decade, cementing its top position in league tables and accounting for 24% of market share with $4.2 billion worth of bond issuance during the award period, based on Dealogic data. Besides the staggering number of issuances, the bank also brings innovative and landmark transactions to the market, notably in the Islamic finance space.

CIMB strongly promotes the growth of the Islamic capital market in Malaysia, attracting interest from foreign clients such as International Finance Corporation, World Bank, UMW Toyota and Tesco, as well as providing advisory services to various regional governments with ambitions of developing their sukuk markets. Because of this, the bank — which has a dedicated Islamic structuring team and shariah committee — is the only Asean financial institution awarded with prestigious and inaugural mandates from Indonesia, Hong Kong, Turkey and the UK.

Some of the more landmark DCM deals during the awards period include the Government of Malaysia’s $1.5 billion dual-tranche deal in April, the country’s first after a four-year hiatus; Petronas’s $5 billion multi-tranche offering that consists of both conventional and sukuk tranches and the Government of Hong Kong’s inaugural $1 billion and the UK’s maiden £200 million Islamic notes.

In addition to investment banking, CIMB is a strong leader in the interbank foreign exchange markets in Malaysia. According to Bank Negara Malaysia, the bank’s FX trading flow chalked approximately M$1 trillion in 2014, an 8% increase year-on-year. This translates into a market share of 20.56%, up from 12% in 2013.

Via its wide range of FX product offerings and experienced corporate and institutional sales teams, CIMB also observed a 33% year-on-year growth in FX swap trading volume to M$991.63 billion in 2014, according to BNM numbers. The bank’s FX option desk, meanwhile, had a trading volume of M$17.58 billion last year, a whopping 40% increase from the year before.

CIMB’s success as an investment bank is due to its cross-asset reach across markets. The bank has not only deployed its expertise in Malaysia, it is well equipped to transact and market deals in the Asia-Pacific with presence in nine countries. Also, based on its large size institutional and retail equities business, the research team to-date covers 77% of Bursa’s market capitalisation.

This is why CIMB deserves, for the first time, the Best Broker award. So far for 2015, the bank maintained its presence as the top brokerage house in Malaysia, with a market share of 11.77%, up from 2014’s 10.98%, according to Bursa Malaysia data.

PAKISTAN

BEST BANK

MCB

MCB Bank and Habib Bank were both strong contenders for the award.

In the end, MCB Bank, the smaller of the two, won out.

Partially state-owned Habib Bank is bigger in terms of assets, profitability, and branch network, but MCB has far better efficiency ratios, prompting investors to reward the bank with a consistently higher stock market valuation.

At the beginning of June, shares in MCB were trading at 11 times earnings on a trailing 12 months basis and at 2.11 times price-to-book.  Habib Bank, by contrast, was valued at 8.79 times earnings and 1.71 times price to book.

MCB scores well on all the main metrics used to value banks.

Its 2014 return on equity came in at 23.83% compared with Habib Bank’s 22.6%, while its return on assets stood at 2.78% compared with Habib Bank’s 1.9%.

Likewise, it reported an impairment ratio of 6.8% compared with Habib Bank’s 13.3%, while its overall capital adequacy ratio was also very strong at 20.41%.

That means that at 5.4%, MCB’s net interest margin is far higher than Habib Bank’s at 4%.

One of the reasons why MCB does so well is that it deploys staff very efficiently. It employs 8.7 per branch compared with the domestic industry average of 10.2. 

This has resulted in an industry leading cost-to-income ratio of 37.91% in 2014, which was also a reduction on 2013’s 40.05%.

MCB has a relatively clean loan book after aggressive provisioning in recent years and also benefits from its investment by Malaysia’s Maybank, which owns a 20% stake.  

The bank is majority-owned by the country’s biggest conglomerate, the Nishat Group, which in turn is owned by one of its richest businessmen, Mian Mohammad Mansha.

TAIWAN

BEST BANK/BEST FX HOUSE

CTBC Bank

CTBC Bank had a barnstorming year thanks to its bargain basement purchase of Japan’s Tokyo Star Bank in June 2014, the first takeover of a Japanese bank by a foreign lender.

The $519 million deal had a big impact on the bank’s earnings and asset base. Net income in the 2014 financial year rose 82.39% to NT$34.26 billion ($1.1 billion), making CTBC Bank Taiwan’s most profitable domestic bank. Assets also rose 50.1% to NT$3.24 trillion.

The acquisition puts CTBC Bank in a strong position to export its wealth management expertise to Japan and create an even more profitable franchise. Indeed, it is the strength of the bank’s wealth management platform and retail banking business, which has led to its almost continuous track record in winning FinanceAsia’s Best Bank award for the past 15 years.

In 2014, CTBC’s fee income was more than double that of its two nearest rivals, Cathay United and Taipei Fubon Bank. That was largely the result of investors’ continued search for yield, which boosted the earnings of CTBC’s wealth management division and helped underpin profitability in an overbanked and therefore highly competitive Taiwanese operating environment.

Total fee income amounted to NT$27.48 billion, a 12.3% increase over 2013. Wealth management contributed NT$11.76 billion of the total backed by the bank’s 12% market share, making it the country’s largest player.

Its credit card division also did well contributing NT$4.58 billion in fee income thanks to CTBC’s market-leading 15.45% share of credit cards in circulation. One of the bank’s key strategies is to defend this market share and in 2014 it was even able to increase it slightly from 15.4% in 2013.

CTBC Bank also scored well in terms of financial strength with its ROE rising 52.64% to 19.95% and its capital adequacy ratio rising 13.8% to 13.46%.

Like all the Taiwanese banks, CTBC also continues to grow its foreign currency loan book and by the end of 2014, it had the second-largest loan book behind Mega Financial. Foreign currency loans grew 24.5% over the course of the year to account for 32% of the total, or 48% if Tokyo Star Bank is included.

Both Mega and CTBC will benefit should US interest rates start to rise. Analysts believe CTBC’s leading wealth management division will also continue to power ahead thanks to the country’s high savings rate and more subdued domestic loan growth.

The FX House award is always a close call between Taipei Fubon Bank and CTBC Bank, but this year it goes to CTBC Bank, the country’s biggest foreign exchange derivatives player.

In 2014 the bank grew its domestic foreign exchange derivatives transaction volume by 22%, according to central bank statistics. That was quite an achievement in comparison to the industry’s average 14% rise and given that it already held the number one spot.

In September, the bank became the first to gain domestic approval to provide NT$ non-deliverable forward products through its overseas branches, which should help its clients to reduce their hedging costs.

CTBC Bank also says it is the only Taiwanese bank, which is able to provide interest rate risk warehousing, something that has previously been the preserve of foreign banks. In the second half of 2014, it underlined that capability by self-managing the risk of $1.29 billion of callable bonds issued by the bank.

For all Taiwanese banks, it is becoming increasingly important to play a leading role in the offshore renminbi market. CTBC Bank estimates that it accounts for almost half of the dollar/offshore renminbi options market. 

BEST INVESTMENT BANK/BEST BROKER

Yuanta Securities

Yuanta did not win our individual categories for Best ECM House and Best DCM House but it came a close second in both. That strong showing, combined with its leading M&A franchise and multi-year dominance as Taiwan’s biggest brokerage by market share, makes it the clear winner as the Best Investment Bank and Best Broker.

For 15 years running, Yuanta Securities has been Taiwan’s biggest broker and in 2014 had a 13% market share. It has no intention of losing its mantle any time soon and has spent much of the last year trying to capitalise on its domestic position to create a regional franchise.

Having purchased Korea’s Tongyang Securities in 2013, it re-named it Yuanta Securities in the middle of 2014 and went on to buy Indonesia’s PT Amcapital early in the autumn.

This April Yuanta’s share price also spiked 14% in the space of five trading days after rumours of a Stock Connect Scheme between Taiwan and China gained traction. Its bankers believe there is a strong possibility that the scheme will happen, although the country’s presidential elections next January may present a temporary barrier to further progress.

One of Yuanta’s biggest calling cards has always been its M&A business, where it has a reputation for focusing on quality rather than quantity. Its standout deal in 2014 was the stake sale and subsequent merger between Asia Pacific Telecom and Ambit Microsystems, a subsidiary of Hon Hai Precision.

Asia Pacific Telecom’s board approved the merger in June 2014 in an overall deal worth $2.374 billion.  Yuanta Securities successfully added value by creating a competitive bidding process for Asia Pacific Telecom. This helped to raise the final purchase price and to elbow rival suitor Ting Hsin out of the picture.

The deal will help Ambit, which was awarded a 4G license, to roll out a network using Asia Pacific Telecom’s 2.1 million subscribers.

In the ECM and DCM space, notable achievements include lead managing a large NT$21.87 billion follow-on share offering for Taiwan Cooperative Financial Holding Company and a raft of corporate bonds for the Formosa Group, Taiwan’s biggest corporate bond issuer of 2014 by volume.

In June 2014, for example, Yuanta led an NT$6.6 billion issue for Formosa Chemical & Fibre, followed by an NT$6 billion issue for Formosa Petrochemical in August. Other notable bond deals include CPC Corp’s NT$15.4 billion issue last June.

Yuanta has also driven forward plans to use its newly established Offshore Securities Unit to broaden its revenue base across Asia. That includes launching its first dim sum bond for Woori Bank in March.

BEST ECM HOUSE

Fubon Securities

This is always a very competitive award and the current year has been no exception with three houses standing out — KGI Securities, Yuanta Securities, and Fubon Securities.

Yuanta completed the largest follow-on offering during the time period in question, raising NT$21.87 billion for Taiwan Cooperative Financial Holding Company in January. The deal fits a key ECM trend in Taiwan where many of the financial holding companies have been raising equity to bolster their capital adequacy ratios and boost their war chests as they seek to expand overseas.

KGI Securities also had a busy year. Standout deals include two NT$10 billion-plus issues for TFT-LCD manufacturer Innolux and Eva Airways.

But 2014 was truly Fubon’s year to claim the crown because of its standout performance with IPOs.

As a relatively mature market, Taiwan does not see many jumbo IPOs but, in August, Fubon brought to market the country’s largest deal in eight years and its largest privatisation in a decade. The bank was sole lead manager on the NT$6.68 billion flotation of Aerospace Industrial Development Corp, which sits under the Ministry of Economic Affairs.

That deal was not only large by domestic standards but also came from an unusual sector in a country better known for its technology and finance-related offerings. Furthermore, the transaction was allocated using a seldom seen US-style auction and public lottery that resulted in a 70%-30% split between institutional and retail investors.

Fubon bankers say their biggest difficulty was managing the auction due to the government’s speedy six-month timetable from mandate to listing. Yet investors who purchased AIDC’s IPO are likely to have been extremely happy with the outcome since its share price more than doubled from NT$16.84 within the first week of listing.

As of early June 2015, it was still performing well trading around the NT$41 level.

Shortly before AIDC, Fubon also completed an IPO for Tehmag Foods raising NT$520.3 million. While this transaction was much smaller, it was also from another relatively unusual sector — bakery goods.

In the highly competitive follow-on sector, Fubon has also been at the forefront of issues for financial holding companies seeking to raise new capital. In September it was lead manager for an NT$6.6 billion issue for Sinopac Financial Holdings Company.

Looking to the future, Fubon is likely to be a key beneficiary of deeper trading links between China and Taiwan. Its ownership of First Sino (re-named Fubon China in April 2014) puts it ahead of the competition by giving it a more entrenched presence on the mainland. That has already generated a first IPO mandate, which the group hopes to bring to market later this year.

BEST DCM HOUSE

KGI Securities

This article has been corrected to clarify Fubon's role on an ECM deal 

SINGAPORE

BEST BANK/BEST INVESTMENT BANK/BEST ECM HOUSE/BEST DCM HOUSE/BEST FX BANK  

DBS

DBS Bank wins the best bank award thanks to its strong retail presence and the breadth of its franchise, serving the largest companies to migrant workers remitting money back home. It is the largest consumer bank in Singapore, serving more than 4.6 million customers.

According to SNL Financial data, DBS has the largest retail presence in Singapore with 88 branches compared with United Overseas Bank and Oversea-Chinese Banking Corporation, which have 54 and 45, respectively. It also has the largest depositor base among its peers — testament to its strong domestic brand and the depositor base it inherited from POSB Bank.

The bank is equally aggressive on the digital front. While the bank’s expansion plans into Indonesia were previously thwarted, it has looked towards digital banking to grow and has a large internet and mobile customer base in Singapore, with about 2.1 million online and 900,000 mobile users.

Despite some headwinds, the bank’s net profit rose to a record S$1.3 billion ($963 million) in the first quarter, adding to the S$4.05 billion it earned in all of 2014.

While DBS has been on the acquisition trail, it hasn’t overpaid in recent deals. During the period under review, DBS acquired Societe Generale’s Asian private banking arm for $220 million, further expanding its private wealth footprint. The bank has integrated the acquisition with relatively few assets under management dropping away.

The bank also remains Singapore’s most active domestic lender. Aside from having a 24% share of the Singapore mortgage market, DBS is the second-largest syndicated loan provider in Singapore with a 14.8% market share, just behind Standard Chartered but well ahead of OCBC and UOB, according to data provider Dealogic. And yet DBS’s NPL ratio stood at 0.87% for the first quarter of 2015 compared with UOB’s 1.18% and OCBC’s 0.61%, SNL Financial data shows.

On the investment banking side, DBS also outshines its domestic peers. The bank has been at the forefront of Temasek-related deals and has played a key role as the state-linked fund looks to reshuffle and merge portfolio companies.

One example is Keppel Corp’s $7.1 billion offer for Keppel Land. DBS advised Keppel Corp on strategies to de-list, successfully executed a two-tier offer price transaction, and provided bridge finance.

Another example is its role as sole adviser to CitySpring Infrastructure Trust in its merger with Keppel Infrastructure Trust. Following the acquisition, the trust will become the second-largest business trust in Singapore.

In addition, DBS was sole adviser to industrial property landlord JTC Corp in the merger of its subsidiaries Ascendas and Jurong International Holdings with Temasek’s Surbana and Singbridge in a deal valued at about S$5.1 billion.

With intra-Asia mergers and acquisitions picking up, DBS also advised SingPost, when Alibaba took a stake, as well as Hankore Environment Tech in its merger with China Everbright.

In terms of debt capital markets, DBS topped the country’s league table with a 22.2% market share for the period under review, nearly double its closest rivals HBSC and OCBC, according to data provider Dealogic.

The bank has also helped to further develop Singapore’s domestic bond market. Among the notable deals were Protelindo Finance’s debut Singapore dollar bond, which was backed by a guarantee from The Credit Guarantee and Investment Facility, a trust fund of the Asian Development Bank. The S$180 million deal was the first public CGIF-guaranteed bond in the Singapore bond market.

In addition, DBS has brought to market debut borrowers such as Halcyon Agri, Midas Holdings, and Pacific International Lines, helping to raise the profiles of small-to-medium enterprises.

It was also an arranger for ANZ’s inaugural bank capital issue in the Singapore dollar bond market.

DBS’s main ECM rivals are really the foreign banks as neither OCBC nor UOB have made significant inroads. According to data provider Dealogic, DBS was fourth in the ECM league tables, behind HSBC, JP Morgan and Bank of America Merrill Lynch.

Although the Singapore market was relatively quiet during the period under review, DBS still brought to market a number of noteworthy ECM deals including Keppel DC REIT, the first data centre real estate investment trust to be listed in Singapore. It was also sole global coordinator for Frasers Hospitality Trust, a hotel and serviced-residence stapled group with properties across Singapore, Malaysia, Japan, Australia, and the UK. Here, DBS worked out different structures to accommodate each jurisdiction.

The bank also led IREIT Global’s S$369 million listing, which was the first European Reit to be listed in Asia.

Finally, as the foreign exchange market has increasingly moved online, so DBS’s focus on building out its own electronic platform has paid off. Foreign exchange spreads have tightened but the bank has still seen greater trade volumes.

DBS commands a majority share of the US dollar/Singapore dollar interbank and customer trade flows. It is also a leading market maker for Singapore dollar cross currency swaps, with a 50% market share, according to DBS’s own estimates.

BEST BROKER

DBS Vickers          

DBS Vickers wins the best broker award in Singapore thanks to its strong research capabilities and its ability to leverage off DBS Bank’s strong investment banking franchise, offering its clients unrivalled access to IPOs and ECM deal flows.

Given the limited growth within the Singapore stock market, having an Asian research platform has become more important as Singapore investors look to invest regionally. To that end, DBS Vickers has built up an Asian presence with 76 analysts covering 654 stocks. In Singapore DBS Vickers has 14 analysts covering 114 stocks.

As investor interest in China’s stock markets has surged, so DBS’s expansion of its China research team has borne fruit. It now has 20 analysts in Hong Kong and Shanghai, allowing it to offer clients additional insights on that market.

The firm has a track record of identifying small- and mid-cap growth stocks and also focuses on asset-heavy sectors such as Reits and business trusts.

Also worth noting is that DBS Vickers’s brokerage business is less focused on proprietary trading than its peers. As a result, there is arguably less of a conflict of interest.  It also has a balanced brokerage business with about 60% of its trading volume from retail investors and the remaining 40% from institutional investors.

THAILAND

BEST BANK/BEST DCM HOUSE

Kasikornbank

Kasikornbank and Siam Commercial Bank both competed neck to neck for the best bank award but during the period under review the former has stood out for several reasons. Despite the challenging market conditions in Thailand, with growth slowing after a military coup in May last year, Kasikornbank has maintained strong financial metrics and remains a solid performer. 

In the first quarter of 2015, Kasikornbank posted a return on average equity of 18.84 compared with Siam Commercial Bank’s 18.04 — an indication that the bank is generating higher returns for its shareholders. It has also kept its net interest margins up despite keen competition in a heavily banked market. For the full year 2014, its net interest margin stood at 3.85 compared with Siam Commercial Bank’s 3.26, according to SNL Financial. And in the first quarter, it stood at 3.67, above Siam Commercial Bank’s 3.19.

Kasikornbank’s consolidated net profit grew nearly 4% to Bt13.5 billion ($400 million) during the first quarter, when it maintained an NPL ratio of 2.44%, respectable in light of Thailand’s rising household debt and difficult economic conditions.

Kasikornbank also posted relatively strong loan growth of 6.6% year-on-year during the first two months of 2015, the highest in a sector that saw flat growth according to a JP Morgan report in March. In addition, it has maintained capital buffers, with a healthy capital adequacy ratio of about 17.01%.

Kasikornbank is also deserving of the best bond house award, having been an active arranger of domestic bonds and played a role on important deals. According to data provider Dealogic, it is ranked third in Thai DCM league tables, with a market share of 10.2%, after HSBC and Krung Thai Bank, which had shares of 14.6% and 12% respectively.  

However, Kasikornbank played a key part on landmark deals. Notably, it was an arranger for the Thai Ministry of Finance’s first-ever bond switch and helped it to accomplish its first successful liability management exercise. While other countries in the region, such as the Philippines, have embarked on similar liability management exercises, Thailand had not done one before, so it was groundbreaking for the country and enabled the MOF to extend its maturity profile and reduce refinancing risks, while taking out illiquid bonds.

Investors switched out Bt76 billion worth of bonds for a new issue with four tenors — three-, five-, seven- and 23-years. Given that it was the first bond switch, the arrangers and investors had to work through accounting issues.

Kasikornbank also helped to bring other debt issuers to markets. It has not been the best of times for Asian aviation but Kasikornbank was the sole underwriter for Thai Airways Bt4 billion bond issue, helping the carrier raise funds amid adverse conditions.

BEST INVESTMENT BANK/BEST FX BANK

Siam Commercial Bank

Siam Commercial Bank stands out as the best investment bank in Thailand thanks to its M&A advisory and ECM capabilities. M&A activity in Thailand has stayed muted but Siam Commercial Bank has played a role on some of the largest domestic deals including advising WHA Corp on the acquisition of Hemaraj Land and Development for Bt52 billion ($1.3 billion).

The deal was the largest domestic M&A transaction in Thailand for 2014 and the first example of consolidation of the industrial estate industry in Thailand. Siam Commercial Bank was also sole arranger for the acquisition finance, in an example of how the bank effectively provided a whole package of solutions to a client. It also played both advisory and financing roles on smaller deals such as Pace’s acquisition of grocery stores Dean & Deluca for $143 million. 

Like global banks with strong commercial banking platforms, Siam Commercial Bank has pushed for greater collaboration between its investment bank and its lending arm and continues to reap the returns from that strategy.

On the ECM front, Siam Commercial Bank helped to bring a number of mid-sized issuers to market including Eastern Polymer group’s Bt4 billion IPO, for which it was a sole adviser and bookrunner. Siam Commercial Bank assisted the company in its corporate restructuring process prior to the listing, helping it to successfully tap the IPO market. Its stock has since performed strongly.

It was also the sole underwriter for LH Shopping Centers Leasehold REIT, the first Reit to invest in properties on Bangkok’s shopping strip, and also arranged the $70 million IPO of Pinthong Industrial Park Property Fund.

On the foreign exchange side Siam Commercial Bank continues to have a strong relationship with leading top tier Thai companies, helping to meet their foreign exchange requirements. Its top clients include many that are spreading their wings across the region and might have natural foreign exchange hedging and swaps needs.

The bank is also a dominant player in the US dollar/baht market.

BEST ECM HOUSE

Bualuang Securities

In ECM Bualuang Securities stood out during the period of review for arranging a couple of key deals.

According to Dealogic, Bualuang topped the Thai ECM league table with a market share of 23.8%, nearly twice its closest rival Maybank.

That was largely thanks to its bookrunner role in Jasmine Broadband Internet Infrastructure Fund’s $1.1 billion IPO alongside Morgan Stanley.  Although parent Bangkok Bank and Bualuang Securities both took shares in the Jasmine trust offering and rival bankers said the domestic portion was undersold, in a market where there were few jumbo deals, Bualuang stood out for having arranged such a major transaction.

Bualuang also handled Bangkok Airways Bt14.5 billion IPO, which was the largest IPO excluding trust listings for several years. The deal was also in a sector that has faced challenging growth prospects, particularly after a difficult year for tourism in Thailand due to the military coup in May. Despite the challenges, Bualuang helped the Thai carrier raise funds.

Away from jumbo deals, Bualuang also helped to shepherd small companies such as Thai Solar Energy on to Thailand’s Market for Alternative Investment and was involved in secondary deals such as Thai Union Frozen’s Bt3.1 billion overnight placement.

BEST BROKER

Maybank Kim Eng

Maybank Kim Eng is the standout broker candidate in Thailand due to its strong retail presence, with an average market share of about 11% for the period June 2014 to March 2015, according to the firm’s own estimates.

The strength of the firm’s broking franchise lies in its retail business, which constitutes about 90% of its business. In contrast, key rival Phatra’s strength lies primarily in institutional broking.

With domestic retail investors driving Thailand’s stock market that has put Maybank Kim Eng in the box seat.

Maybank Kim Eng has played a role in educating investors, organizing a series of corporate roadshows in Thailand offering its domestic clients access to companies.

The brokerage has invested in its research and offers its clients insight into other Asean markets with 85 analysts, sector specialists, and economists covering more than 550 companies regionally.

Worth noting also is that Maybank has been rising up the Thai ECM league table, with a market share of 13.2% for the period under review, compared to fourth place with a market share of 6.4% from June 1 2013 to May 31, 2014, according to Dealogic. That means it is now the second most active player after Bualuang Securities. This puts it in a stronger position to offer its clients access to ECM deals going forward. 

VIETNAM

BEST BANK

Vietcombank

Vietcombank has not been the most outstanding bank for shareholders in the period under review. Other banks did better when it came to profits, both before and after tax, and return on equity.

For example, Vietcombank (also known as VCB) last year reported a return on equity of 10.76%, below other large banks such as BIDV (a state development bank), Sacombank or VPBank, but higher than Vietinbank or Techcombank. Its NPL ratio of 2.31% is also middling.

But Vietcombank boasts strong growth in assets, loans and deposits — the highest such growth among comparably big banks.

Vietnam’s housing market is recovering and consumers are tentatively becoming more active. Economic growth is robust, inflation is under control, interest rates are low, and foreign direct investment remains at healthy levels. This is the time for the country’s banks to accelerate.

Among large banks, Vietcombank – the fourth largest lender in total loan volumes, as well as in deposits and asset size ­– has the most to show for this, with the best mix of growing business that should not jeopardise future balance sheets. Compared with other major state-owned banks, it has done the most to diversify from a wholly corporate clientele to supporting small businesses and retail customers.

Total assets are up 23% year on year at Vnd577 trillion ($26.5 billion) year on year, while loans to customers last year grew by nearly 18%. The bank also mobilised Vnd424 trillion of funds from depositors, up 27% year on year.

Vietcombank continues to extend its major role in cross-border business, with increased volumes for international settlements, incoming remittances and foreign exchange trading.

BEST ECM HOUSE, BEST BROKER

Saigon Securities (SSI)

This was a controversial call because competitors dominated the high-profile privatisations, such as the long-awaited IPO of Vietnam Airlines in November. In a year when privatisations would rule the league tables, why go with a mid-sized player?

The reason is that foreign investors don’t like a lot of the IPO deals. While it is a testament to other houses’ capabilities that secured those mandates, we thought it timely to remember the true drivers of growth and employment: small companies and the private sector.

SSI had a strong year bringing small but attractive companies to market.

A few of these were big enough to matter to investors, such as the Vnd460 billion IPO of Seaprodex (aka Vietnam National Seaproducts), or the Vnd100 billion convertible bond raised for Transimex, a logistics company.

As a broker, SSI scored a tri-cast, becoming the first broker to enjoy market-leading position on both the Hanoi and Ho Chi Minh City stock exchanges, as well as on the pre-IPO index.

Although all brokers have blue-chip research, SSI drove volumes mainly through mid-sized stocks. Liquidity problems and regulatory limits make it hard to sell a lot of these to foreigners, meaning SSI has to outwit rivals to provide both institutional and retail investors with access to equities.

Retail was the main driver of volumes last year; at one point SSI was generating $150 million in daily average turnover, a huge amount for Vietnam. That has abated somewhat as foreign investors begin to reassert market leadership, but given their constraints the domestic market will likely continue to underpin stable brokerage activity.

That said, SSI has helped foreign clients gain exposure to sectors as diverse as consumer discretionary and heavy equipment. And it works to ensure clients are satisfied through regular overseas roadshows, investing in state-of-the-art electronic trading platforms and making available a deep bench of research analysts. Several client testimonials suggest the strategy is working.

BEST DCM HOUSE

BIDV Securities (BSC)

BSC has developed into a powerhouse across Vietnamese capital markets, with strong capabilities in equities and M&A. But this year it stood out in DCM against considerable competition: falling interest rates have sparked bond issuance, while equity markets haven’t kept up.

BSC executives consider DCM their strongest capability at the moment, partly because selling bonds is so much more difficult; investors understand stocks and have been reluctant to dabble in fixed income, which lacks the collateral of a bilateral bank loan.

To overcome this BSC has broadened the investor base beyond other banks, to include insurance companies and fund management companies — while most competitors lack such diverse distribution. Achieving this requires not just plenty of investor education but also internal coordination. That is why BSC remains the finance ministry’s primary dealer and leading underwriter.

Among its deals this year, it underwrote a Vnd3 trillion bond for Vinacomin, the country’s biggest mineral mining company, in 2014. The bank convinced investors to accept immediate coupons of 9.8% for the first two payments but a low 2.75% margin rate thereafter, ultimately netting the company a lower margin rate than the average 3.3% for corporate bonds. Moreover, nine different institutions bought the securities, making this the first deal in the corporate bond market that didn’t rely on the underwriter’s parent bank to scoop up most of the deal.

Another difficult deal was the restructuring of state-owned construction company Song Da Corporation’s outstanding debt from a 2010 issuance that it nearly missed. BSC restructured these securities into a Vnd1.25 trillion corporate bond that it placed with a trio of financial institutions.

BEST INVESTMENT BANK

Viet Capital Securities

To win this award requires all-round capabilities and successes in M&A, equities and debt, as well as a trading operation that can place securities. The privately owned Viet Capital Securities enjoyed a solid year, thanks to professional teams as well as the backing of its founder, the influential Phuong Thanh Nguyen.

In M&A, the firm concentrates on representing local sellers, mid-sized and large companies involved in many sectors, from consumer goods and services and retail to finance.

Often these are companies selling stakes or subsidiaries to foreign buyers. Deal specifics were off the record but included trading company Nguyen Kim bringing in a Thai strategic investor to help improve its domestic competitiveness.

Viet Capital is also starting to see deals advising buyers, thanks to its extensive network. It represented a Philippine infrastructure company, Metro Pacific Tollways, when it took a stake in CII Bridges and Roads Investment in March, 2015.

On top of this the firm has been active in equities and debt — perhaps not as much as some of its competitors but by engaging in select, high-quality transactions, it has rounded out its investment banking credentials. These include mid-sized but tricky equity private placements for developer Khang Dien House, enabling it to become the second-largest real-estate company listed in Saigon, as well as helping the chairman of Phat Dat (another developer) to sell some of his stake to institutional investors.

In each of these cases Viet Capital was early to identify the real-estate turnaround and help developers secure the funding needed to complete projects or restructure.

Viet Capital also helped investors to identify and assess risk in the still-nascent corporate bond market. It raised capital for four companies, in banking, real estate and consumer finance. Together these transactions raised $224 million in debt financing, a large amount for Vietnam’s small corporate bond market. The standout was a Vnd3.7 trillion ($172 million) transaction for Sam Kim, a poultry producer, enabling it to expand its operations.

INDIA

BEST BANK
HDFC

Headquartered in Mumbai, Housing Development Finance Corporation (HDFC) is one of India’s largest financial institutions, with $85.6 billion in assets including $53 billion in loans for the fiscal year that ended in March. It has a reputation for stringent lending standards, and net nonperforming loans were only 0.27% of assets for fiscal 2014.

With this, HDFC bags the best bank award in India as it boasts an impressive multiyear history of steady earnings gains, thanks in part to low-cost deposits. Return on assets are 2%, as high as they have been over the past decade and a half, and the bank has been delivering a steady net profit growth of at least 20% in the past eight quarters even when economic growth was sluggish thanks to a pick-up in retail credit growth.

And HDFC Bank’s small-town expansion plans should yield more high-quality auto and small-business loans. The bank has invested in infrastructure over the past three years, doubling the number of ATMs it operates, and boosting branch locations. This year, the bank — via organic expansion — has opened 611 branches, with 55% of its branches in semi-urban and rural areas.

Digital Banking has been a key focus area for the HDFC of late. With its digital banking platform, the bank is able to address not only customers who have access to the internet or access to smart phones, but the entire spectrum of clients. In 2014, 55% of its retail customers across the country use Internet and mobile banking to complete their banking transactions, cutting errors and costs. This is significantly higher than the corresponding figure of just 3% in 2001.

HDFC Bank’s record has also made it one of the world’s most expensive banking stocks over recent years. It now trades at nearly six times price-to-book.

BEST INVESTMENT BANK, BEST ECM HOUSE, BEST DCM HOUSE
AXIS CAPITAL / AXIS BANK

There has been some tight competition for the Best Investment Bank award and the top contenders are Kotak Investment Banking and Axis Capital/Axis Bank. But this year, the latter takes precedence due to its outstanding performance in the M&A, ECM and DCM space.

Axis Capital, a wholly-owned subsidiary of Axis Bank and formed through the integration of Enam Securities with its parent, provides the entire gamut of investment banking services. Although a relatively new entrant, it is already a powerhouse, combining Axis Bank’s commercial banking and DCM franchise with Enam’s investment banking and equities franchise.

As a result, Axis Capital is top on India-involved M&A deals, accounting for $6 billion worth of deals or 14.4% of the pie, according to Dealogic. Although the bank comes third for local institutions in the ECM after Kotak Mahindra and State Bank of India with $702 billion in volume, it tops the list in terms of deals executed (16 transactions) as well as ECM revenue generated.

Some of the marquee transactions for the period include Indian stock wind energy company Inox Wind’s Rs10.2 billion ($163 million) IPO, which priced at the top of its indicative range in March, and PE firm Warburg Pincus’ $200 million investment in jewellery manufacturer Kalyan Jewelers — a sector that historically has seen very little PE interest — in October. The latter transaction was the third biggest PE investment in India for financial year 2015 ending March and is the largest investment by Warburg Pincus in the South Asian nation so far.

As for DCM, it’s really a no brainer. Axis Bank continues to dominate the DCM space, where it captures a large portion of the market share. The Indian rupee bonds business tends to be balance sheet heavy and here, the bank used its ability to underwrite bond deals to its advantage. Additionally, it has strong ambitions to develop the local currency corporate bond market, be it primary or secondary market.

According to Dealogic data, Axis Bank is top local financial institution in the league tables for both the number of deals executed and revenue generated. It has raised $6.1 billion or 143 deals during the awards period, translating into a market share of 12.2%. Also, the bank generated a net revenue of $13 billion.

Axis Bank’s success boils down to the fact that it is active in all segments of corporate bonds across the rating spectrum. The is especially true for low-rated issuers, where Axis Bank plays a large role in executing deals that are state-guaranteed whilst at the same time doing active market making. The bank is also active in the financial institution space. Axis helped Bank of India raise the country’s first Basel III-compliant additional tier-1 perpetual offering of Rp25 billion ($392 million).

BEST BROKER
 

Kotak Securities

Thanks to Kotak Securities’ strong international distribution across various major financial markets such as the US, UK, Singapore and even the Middle East in Dubai, the firm has the scale and depth to reach 1,058,357 retail and non-institutional investors for IPOs and secondary offerings.

Moreover, the bank has a comprehensive research platform, given that it possesses 26 highly-ranked analysts that cover 166 stocks in 16 sectors. The department is able to provide in-depth daily alerts, wide-ranging sector-related and company research, economic reports as well as customised research reports.

Kotak Securities has one of the most extensive retail distribution networks in India with 1,128 offices across 352 cities and towns. A Securities and Exchange Board of India (Sebi) registered portfolio manager, the firm has over 2.87 billion of equity funds under discretionary management as of March 31, 2015.

BEST FOREIGN EXCHANGE BANK

ICICI Bank

Indian’s foreign exchange market has gone through a process of gradual liberalisation. As a result, the rupee is more exposed to episodes of heightened volatility with the latest being post May 22, 2013 on fears of tapering of quantitative easing by the US Fed. But since then the rupee has recovered and financial institutions are now more prepared to combat excessive exchange rates volatility.

ICICI Bank, India's largest private sector bank and the second largest bank in the country with consolidated total assets of $132.17 billion at March 31, 2015, is especially the case and bags this year’s Best Foreign Exchange Bank award.

Investment into technology, notably FX platforms to mitigate market risk, is the way to go. The bank’s suite of digital platforms ranges from iTreasury, FX Markets, iDealz to FX Online. These platforms not only meet the knowledge and pricing requirements of its treasury clients but also enable efficiency in the clients’ treasury operations. They are now being enhanced to meet the challenges of evolving regulatory guidelines, client convenience and operational efficiency.

Given that the bank has ICICI presence across 17 countries, including India, its cross-border FX reach is deep. Not only does the bank provide a wide array of FX services and products, it also provides 24-hour global coverage with a detailed knowledge of local markets plus extensive experience in global markets.

Anecdotal evidence suggests ICICI adequately nabs a large share of average turnover of the local Indian FX market, although the figures are not readily available. The Indian FX market has grown significantly over the last decade, with average daily turnover recording a quantum jump from $6 billion a year in 2000 to 60 billion in recent times, according to Bank for International Settlements.

THE PHILIPPINES

BEST BANK, BEST FOREIGN EXCHANGE BANK 

BDO

Controlling 21% of the loan market, BDO Unibank continues to be the doyen of Philippines banking, an increasingly competitive sector currently flush with excess liquidity. BDO has followed a sensible expansion path, choosing market segments with solid fundamentals and allocating capital judiciously. This prudent approach led to lower year-on-year growth in assets, loans and deposits in 2014/15 compared with its rivals Metrobank and BPI but capital ratios at the bank remain enviably strong. Non-performing loans are down to 1.3% compare to 7% in 2007 and its capital adequacy ratio at 14.6% is well above the central bank’s minimum of 10%. BDO expanded its corporate loan book by 16% in 2014 with a particular focus on originating and structuring large project finance deals. Organic growth was complemented by acquisitions. In December BDO announced the acquisition of One Network Bank, one of the country’s largest rural banks with 105 branches mainly in the southern Philippines. It also extended its presence overseas, opening a representative office in Seoul to focus on the foreign-worker market and to service cross-border transactions between Korean and Philippine companies. The bank posted a record net income of P22.8 billion ($511 million) in 2014, helped by its strong foreign exchange offering.

BDO continues to hold the top spot for USD/PHP spot and forward trading. In 2014 it executed volumes of $30 billion in USD/PHP spot trades, which is equal to a 20% market share. Its share of the swap market is higher, with volumes of $77 billion in 2014.

BEST INVESTMENT BANK, BEST ECM HOUSE
 

BPI Capital

BPI Capital wrestled the award for Best Investment Bank in the Philippines from long-standing incumbent BDO Capital for demonstrating innovation and leadership in all areas of capital markets. Backed by its influential parent – the Bank of the Philippine Islands – the firm has made significant strides in recent years thanks to a team of seasoned dealmakers hired from the ranks of foreign banks and to a willingness to take calculated risks. BPI Capital has been able to harness the placement power of its institutional, corporate, retail, and high-net-worth customers to distribute its deals far and wide. The firm’s equity capital markets division was particularly busy during the review period, acting as issue manager and underwriter on a number of key deals and raising over $1.7 billion for issuers. This included a P6.8 billion stock rights offering for Del Monte Pacific, the first ever for a company listed on both the Philippine and Singapore exchanges. BPI Capital was also instrumental in introducing new names to investors through the P3.5 billion listing of restaurant owner Max Group and the P7.5 billion initial public offering of retailer SSI Group. Both of these deals included some innovative structuring in the form of cornerstone tranches and leveraged buyout repayments. On the debt side of the business, BPI Capital maintained a 15.5% market share for the year and helped to raise over P22 billion in bonds for borrowers. Most notably, the bank was sole issue manager on a P10 billion bond for market darling Aboitiz Power. It also helped private equity funds Navegar and Baring Private Equity to purchase Philippine assets by arranging the necessary finance.  SB Capital deserves a special mention in this category.

BEST DCM HOUSE
 

BDO Capital

BDO Capital was billed on 10 out of 11 public bond offerings during the review period, cementing its position as the best arranger of corporate bonds in the Philippines. What is more, it made commendable headway in bringing non-listed issuers and smaller issuers to market. Our judges were particularly impressed with a P2.7 billion debut transaction for mid-market player Century Properties in September, which followed on from a P7 billion deal earlier in 2014 for privately held Manila North Tollways Corporation, the toll road company of Metro Pacific. BDO Capital also kept pace with its competitors on big deals, acting as joint issue manager on a P20 billion bond for SM Prime and as joint lead underwriter on a P12 billion transaction for GT Capital. In a shrewd move, BDO Capital saw an opening when the Philippine central bank began tightening lending rules around the real estate sector and helped several property companies tap capital markets, including Filinvest, Robinsons Land, and Ayala Land. It also moved into territory normally occupied by foreign debt houses by arranging a neat Ps7.2 billion Tier 2 note issue for Union Bank. On the structured product front, the bank lead-managed and arranged two significant public-private partnership financings during the review period: an P11.3 billion bridge loan facility and subsequent term loan for GMR Megawide Cebu Airport Corporation and a P31 billion term loan facility for Citra Central Expressway, which is constructing stage three of the Metro Manila Skyway toll road. For showing such innovation and expanding the scope of debt capital markets in the Philippines, BDO Capital wins our Best DCM House award for 2015.

BEST BROKER

Maybank ATR-KIM ENG

Four years after the successful merger of the three Southeast Asian securities firms still baked into its name, Maybank ATR-Kim Eng stands out for its quality service and remains the most active local broker in the Philippines. The firm has capitalised on a strong rally in Philippine shares by bringing its comprehensive platform of brokerage, research, and distribution capabilities to bear. It holds a 6% market share with a 90/10 split between institutional and retail business. In April 2014 the firm launched an online trading engine in conjunction with the Philippine Stock Exchange and has since experienced a strong take-up. On the research side, the firm provides one of the largest coverage of companies, producing reports on as many as 60 stocks, and delivers timely updates to clients. Fund managers are particularly avid followers of the firm’s consumer, power, and mining analysts and will soon benefit from increased coverage of small- to mid-cap stocks. As its share of the corporate finance market continues to slip, Maybank ATR-Kim Eng is relying on its independence and on the strength of its sales/trading team to maintain its top ranking. A plan to conduct more non-deal roadshows for listed companies and develop new equities products will hold it in good stead, as will its focus on increasing its penetration of the mass retail market.

SRI LANKA

BEST BANK

Commercial Bank

Sri Lanka is one of the easiest awards to judge since each passing year sees Commercial Bank create more clear water between itself and the rest of the domestic banking sector.

That success has been reflected in Commercial Bank’s share price, which has risen by 34% in the last 12 months, outperforming the overall market and cementing its status as the sector’s largest bank by market capitalisation and the country’s third-largest listed company overall.

The bank is twice as large as its nearest private sector competitor in terms of asset size and profitability. In 2014, assets grew 32% to Rs795 billion ($5.94 billion), while net profits were up 7.03% at Rs11 billion.

Sri Lanka’s two leading state-owned banks, Bank of Ceylon and People’s Bank, are both larger than Commercial Bank when it comes to assets, but they continue to lose market share to Commercial Bank and are far less efficient.

For example, Commercial Bank’s cost-to-efficiency ratio stood at 40.25% at the end of 2014 compared with a 60.58% ratio for People’s Bank.

One of the reasons for Commercial Bank’s success has been its growing use of technology to make its operations more efficient.  As a result, profits per employee rose 7.8% in 2014.

Commercial Bank is the only Sri Lankan bank to deploy digital cheque imaging. In September it also re-launched its online corporate banking service, leading to a 50% increase in users through to May 2015.

Other recent initiatives during 2014 include extending centralised account opening and credit approvals to all of its branches and adding 21 more ATM machines across the country.

Sri Lanka’s whole banking sector has benefited from the country’s strong economic growth since the end of the civil war in 2009. Commercial Bank officials also believe that foreign investors now have more confidence in the nation’s commitment to good corporate governance and the rule of law, which should benefit foreign direct investment.

The better operating environment is helping the bank to move up the value chain as growing affluence leads more clients to seek credit cards, mortgages and personal loans. All registered double-digit percentage growth in 2014.

It is also prompting a shift towards investment banking and hopefully higher fee income. In 2014, the bank’s corporate finance unit was re-launched as Commercial Bank Investment Banking.

Commercial Bank also has a strong tilt towards the small and medium sized enterprise sector. In 2014, it deployed funds from the International Finance Corporation to develop more services including leadership and entrepreneur training. This year also saw the launch of an Agri Business loans scheme.

Further down the scale, a Divisaru account was launched — the first micro credit scheme of its kind in Sri Lanka.

MONGOLIA

BEST BANK

TDB

Mongolia’s oldest bank underwent a facelift in 2014, with six branches and the headquarters building all given a new colour scheme and a lot more automation.

This revamp is helping to underpin TDB’s extremely strong cost-to-income ratio, which makes it Mongolia’s most efficient domestic bank.  For the past three to four years, the ratio has hovered around the 30% level, dropping to a low of 21.15% in 2013. The bank targets a ceiling of no more than 40%.

TDB’s closest rival, Khan Bank, has more branches and more than three times as many staff, reflecting its greater focus on retail banking. TDB is Mongolia’s pre-eminent corporate bank and in many ways the international face of the country’s domestic banking sector.

That was typified by TDB’s most recent $500 million international bond issue in May, the bank’s fifth. A 144a tranche enabled the bank to access US investors for the first time and proceeds were immediately swapped into Mongolian tughrik via an arrangement with the central bank, which was looking to increase its foreign exchange reserves.

As a result, TDB achieved a much lower cost of funding — 9.375% for a five-year tenor compared with the 15% interest rate being paid out on one-year domestic time deposits.

TDB is also considering raising funds in the Samurai market, having opened an office in Japan in July 2014 after the signing of an economic partnership agreement between the two countries.

One of TDB’s greatest strengths lies in its trade finance operations. Despite a drop in the country’s trade imports in 2014, the bank says it was able to increase its trade finance volumes by 50% thanks to extensive marketing and by offering services to a broader range of clients.

It now handles half of the country’s letter of credit financing and international payments.

TDB’s investment in new technology means it has 200,000 online banking clients in a country with a population of only 2.8 million. It has also been able to capture many of the country’s wealthiest corporate and retail banking clients. At the end of 2014, it had a 20% share of the mortgage market compared with 12% of total borrowers.

Focusing on high net worth clients has paid off, with net profits rising 11.5% during 2014 to MNT 93.9 billion ($49 million).

In a regional context, the bank also scores very highly where margins are concerned. Its net interest margin stood at 3.9% at the end of 2014.

Assets also grew 5.6% in 2014 to MNT5.4 trillion, the highest level in the Mongolian banking sector.

INDONESIA

BEST BANK, BEST FX BANK
Bank Mandiri

After winning FinanceAsia’s Best Bank in Asia in September, Indonesia’s Bank Mandiri has secured top spot in its home country for continuing to provide a wide breadth of services.

Bank Central Asia was a close contender after keeping its NPLs down while improving profits. But in a year that was very challenging for Indonesia, both in politics and in capital markets, Bank Mandiri’s size and growth made it stand out.

Mandiri already has enormous scale in Indonesia, essential for a country comprised of 17,000 islands. Yet it continues to grow. The bank increased the number of branches from 2,087 in June 1, 2014 to 2,317 branches as of March 2015. It also has an extensive number of automated teller machines, the third largest in the country.

Mandiri’s net interest margin was 5.0% in the first quarter and 5.91% in the final quarter of 2014, according to data from SNL Financial.

That was higher than some of its domestic peers. Impressively, it also ranked higher than some global banks, including Bank CIMB Niaga and Bank DBS Indonesia, which had first-quarter net interest margins of 4.86% and 3.11%, respectively, SNL Financial data shows.

Mandiri also continued to report strong returns — a 3.39% return-on-assets and a 20.95% return-on-equity in 2014.

Net profits, meanwhile, rose 9.3% year-on-year, totalling Rp19.9 trillion ($1.51 billion) in 2014, compared with Rp18.2 trillion in 2013. In the first quarter, the bank has reported net profits of Rp5.14 trillion, which is 4.3% higher than the Rp4.93 trillion reported in the same prior year quarter.

It also continued to support small- and medium-sized businesses during the period, offering loans totalling Rp55.3 trillion up to the end of the first quarter. Total deposits, meanwhile, hit Rp626.7 trillion as of May 30, 2015.

And while double-digit loan growth over the past few years has put pressure on asset quality across the Indonesian banking system, Mandiri maintains a strong capital base. Its tier-1 capital ratio stood at 14.9% as of the first quarter, according to SNL Financial. And its NPL ratio has remained low. It stood at 0.89% at the end of the first quarter.

The bank also continued to expand its foreign exchange capabilities.

Last year it added six dealing rooms, bringing the total number to 17, and has 29 sub-regional treasury marketing offices in 21 cities. It now also has its e-fx web-based application service up and running in 200 branches, allowing more customers to perform foreign exchange transactions in real time.

Mandiri offers a wide range of foreign exchange services, including cash transactions, hedging products, and investment products. As a result it has a 30.4% share of Indonesia’s overall foreign exchange market.

It also introduced a buyback programme, which guarantees the bank will buy back bonds at a set price, a way to encourage customers to sell their government bonds at a better price and make a profit.

BEST INVESTMENT BANK, BEST DCM HOUSE, BEST BROKER

Mandiri Sekuritas

Mandiri Sekuritas maintained its dominance in investment banking last year, showing strength across all segments and continuing to excel in debt markets.

Danareksa Sekuritas put up a good case this year, particularly in its ECM business, managing to work on the country’s largest IPO last year. But the range of services Mandiri Sekuritas offers its clients, as well as its consistency at the top of DCM league rankings, make it a deserving winner of this year’s award.

Mandiri Sekuritas is the largest capitalised bank in Indonesia. Despite slower markets due to the country’s presidential election and subsequent cabinet selection, it still completed a significant number of financial mandates, from securities underwriting to financial advisory, as well providing secondary market trading.

It completed 45 equity and bonds deals in 2014, compared with 36 in 2013.

Mandiri Sekuritas came in first in Bloomberg’s league tables for debt from June 2014 to May 2015, with a 15.3% market share, or Rp7.89 trillion worth of bond issuance. It completed 23 bond deals in 2014, up from 21 in the prior year.

Notable among them is PT Jasa Marga Persero’s Rp1 trillion bond with a 9.86% coupon in September. Mandiri Sekuritas was sole underwriter on the five-year note issued by the toll road developer and operator. The deal, which underscored the government’s commitment to improving nationwide connectivity via toll roads across provinces, was oversubscribed by a factor of three, and was trading above par at 101.8.

Other deals during the review period include a Rp3 trillion bond for PT Federal International Finance in April, a Rp3 trillion note in OCBC NISP in January, and a Rp750 billion bond in PT Agung Podomoro Land in December.

Mandiri Sekuritas was also involved in a number of IPOs, including PT Wika Beton’s Rp1.2 trillion flotation, which was 17.6 times oversubscribed.

In addition, it took on 39 advisory projects last year, compared with 28 in 2013. Here, Mandiri Sekuritas worked with clients seeking to issue bonds, equities, equity-linked products, or pursuing mergers and acquisitions.

It also ranked highly in terms of its brokerage activity, recording a total transaction volume of Rp129 trillion in 2014, a 12% increase on the year before, while gaining a 4.4% market share, according to the company. The sharp boost in transaction volume was the direct result of an increase in its customer base to 38,380 accounts at the end of 2014 from 21,993 a year earlier.

BEST ECM HOUSE
Danareksa Sekuritas

For the time period under consideration, Danareksa Sekuritas topped both Bloomberg’s and Dealogic’s league tables in terms of equity and equity-linked issuance, surpassing global powerhouses such as UBS, Credit Suisse, and JP Morgan, to take a 19% share of the Indonesian market.

The bank secured a top spot in the ECM rankings by ensuring it was on a number of successful deals across a wide range of industries. From June 1, 2014 to April 22, 2015, Danareksa helped companies raise an estimated Rp2.87 trillion ($217.1 million) by listing on the local stock exchange. 

Danareksa was the only local bank to win the mandate of BlueBird, the third-generation family-run cab company that raised $200 million via an IPO in October. Although the deal was downsized from $300 million, it was the largest IPO in Indonesia in 2014 and widely seen as a success story.

Shares in BlueBird rose 14.6% on their debut and finished the year up 45%, impressive considering the volatility experienced in local markets amid the presidential elections.

Danareksa was also a placement agent and joint bookrunner on PT Telekomunikasi Indonesia’s Rp2.59 trillion placement in June 2014. Shares in the tower operator ended 2014 11.3% higher and were still up 13% by June 1.

A strong year in its ECM business helped boost Danareksa’s net income to Rp63.6 billion in 2014, a 2% increase over the prior year.

It also boasts an extensive distribution network, which includes one head office in Jakarta, one branch in Surabaya, and 42 distribution points in 18 cities across the country. In addition, it has an online trading system that services over 35,000 retail clients.