Our annual look at the best financial services firms in each country around the region has produced the following list of top domestic and foreign houses across Asia. The winners will be celebrated at an awards dinner at the Four Seasons in Macau on Friday, September 9.
CHINA
BEST BANK
China Construction Bank
CCB continued to build on its momentum from last year and wins this award for the second year running. Analysts from foreign firms say it has an impressive market share in mainland deposits, which grew by more than 13% to around Rmb9 trillion ($1.4 trillion) last year, and ranks highly in almost all product lines. The bank recorded similarly remarkable figures elsewhere. Highlights include more than 26% growth in profits before tax and a non-performing loan ratio of just over 1.1% from more than $875 billion in gross customer loans and advances.
Financials aside, CCB grew its branch and sub-branch network to 13,425, ATMs to 39,874 and self-service banks to 9,677. It also boasts a portfolio of more than 57 million personal online banking accounts and more than 8 million new mobile phone banking accounts.
The bank also expanded overseas during the period under review, setting up a new branch in Sydney and opening a representative office in Moscow, and has further plans to cross the Pacific to meet the demands of increasing numbers of its corporate clients expanding cross-border.
BEST INVESTMENT BANK, BEST BOND HOUSE
China International Capital Corporation
Another year and one more time CICC proves to be China’s best all-round investment bank, but only just. It recorded a strong performance across its core business lines but its home competitors are breathing down its neck. Its foreign peers were impressed with its expanding overseas presence and ability to provide sophisticated solutions across many business sectors.
CICC was particularly dominant in M&A, completing 35 transactions, commanding a leading market share of 7.8% in the review period, which was more than the total number of transactions its next three competitors were involved in combined. The firm is also staffed with both highly-experienced domestic and international talent.
CICC’s fixed income business was on impressive form. Reinforcing the firm’s tradition to execute big deals, it was involved in four of the top 10 fixed income deals in terms of transaction value. It really has established itself as one of the top bond underwriters in the country. Landmark deals include Central Huijin Investment’s $7.9 billion bond issue in which CICC was the joint lead underwriter. The transaction created a new innovative government-supported bond product in the interbank bond market and was the biggest non-government and non-policy financial bond issuance in China.
BEST EQUITY HOUSE, BEST BROKER
Citic Securities
Citic Securities had a strong year in its equities business, ahead of both the domestic and foreign competition, with its comprehensive equity financing services. The firm has well established connections with the investor community on the mainland and an increasingly solid client base. Citic Securities not only continued to enhance its ability to bring counterparties together to complete deals but also cemented itself as an innovator in the equity capital markets business. Significant deals of course include Agricultural Bank of China’s $22.1 billion IPO and Dalian Port’s $856 million Shanghai listing amid a weak market and worries about China’s monetary policy tightening.
With a strong investment banking business, the firm also comes out top among the vast number of brokerages in China. During the review period, Citic Securities had more than 7.3% market share, on average, in China’s stock trading volume. It also has a highly rated research team that has received praise from institutional investors for releasing a series of research notes, just two days after the Tohoku Pacific earthquake hit Japan in March this year, which offered analyses of short- and long-term effects on China’s economy, capital markets and industries.
BEST CASH MANAGEMENT BANK
Industrial and Commercial Bank of China
ICBC is still the bank to beat for cash management services in China. During the past 12 months, its already massive customer base now numbers more than 500,000 after growth rates of more than 50% during the past year, driving cash management profits up by more than 30%. Despite China’s rapidly improving rival cash management providers, ICBC’s nationwide branch network of more than 16,000 has helped preserve its lead. Its cash management clients include all Chinese non-banking firms in the Fortune 500, but the bank also boasts strong showings in the SME and middle-market sectors. Additionally, many multinational corporations have selected ICBC to handle their renminbi transactions. Of growing importance as its Chinese clients expand overseas is the bank’s growing offshore branch network, which encompasses more than 200 subsidiaries in 28 countries and with 1,500 correspondent banks worldwide, connecting domestic clients with their overseas markets.
Married with its domestic and international geographical footprint is ICBC’s commitment to product innovation, including domestic and foreign currency cash pooling, consolidated account reporting and global cash management capabilities. Leveraging off its domestic branch network, ICBC has also aggressively developed its links with rural financial institutions, providing corporate clients with a variety of cash management, payment and receivables services.
BEST TRADE FINANCE BANK
Bank of China
Another strong year for Bank of China, marked by a series of new products and strengthened market shares in a number of important segments. China’s leading trade finance bank maintained pole position in international trade settlement, recording volumes of almost $2 trillion, and its foreign currency trade finance operations accounted for the lion’s share of total financial institution trade flows. Meanwhile, its financing and non-financing letter-of-guarantee product portfolio is the most comprehensive of any domestic commercial bank, and accounted for more than 50% of Chinese banks’ market share.
BoC successfully launched a series of new trade finance products this year within its Huilida product series, including interest-rate swaps, cross-border renminbi settlement, as well as foreign exchange interest-rate swaps and import bill advance products. The bank also introduced overseas renminbi financing for both importers and exporters. In addition, BoC now offers factory and forfaiting services to its supply chain finance customers, and also introduced a broad range of renminbi products, including documentary letters of credit, documentary collection, remittances, pre-receipts and pre-payments.
BEST FOREIGN COMMERCIAL BANK
HSBC
With already the largest footprint of any foreign bank in China last year, HSBC increased its reach further to 28 cities and opened an additional seven outlets, including three cross-city sub branches. Particularly impressive is the bank’s offering of renminbi cross-border trade settlement services, which have the widest geographic reach among all foreign banks by serving 20 provinces and municipalities throughout the country. HSBC has unprecedented success in building out its retail business, namely the Premier franchise, which saw a record high customer base growth of nearly 60% in 2010. The Premier network reaches out to about 70% of the bank’s total network in China, serving the country’s rapidly growing affluent population.
While the bank offers services to small and medium-sized enterprises at all branches, it has also expanded support to its Chinese clients that have business overseas with dedicated China desks throughout Asia, Latin America, Europe and the Middle East. In addition, the bank relocates Chinese speaking staff with past experience at HSBC in China to serve its outbound China corporate client base in multiple markets globally. Although HSBC proved to be the strongest foreign commercial bank in China again this year, Citi and Standard Chartered are just round the corner.
BEST FOREIGN INVESTMENT BANK
Goldman Sachs
It was a tight race this year and Goldman Sachs just edged a chin out over the finishing line ahead of Morgan Stanley to take first place for the second year running. Although the latter led in equity transaction volume, it was really the pivotal role that Goldman Sachs played in the deals it was involved in that gave it the edge. Most notable of these was the Agricultural Bank of China IPO, with which Goldman Sachs not only played a lead role as joint global coordinator but was also responsible for bringing in cornerstone investors. Xueda Education Group’s $147 million IPO also showed that Goldman Sachs does not like to just participate in the largest deals. The firm was also ahead of foreign competition in M&A. Not all of its 15 completed deals were complicated, but it did command 6.8% of total market share. Goldman Sachs might not be sitting at the top in terms of transaction volumes, but this business is about value — and it has proven to its clients again that it is a highly trusted and long-term service provider.
HONG KONG
BEST BANK, BEST INVESTMENT BANK, BEST EQUITY HOUSE, BEST BOND HOUSE, BEST FX BANK, BEST CASH MANAGEMENT BANK, BEST TRADE FINANCE BANK
HSBC
The world’s local bank maintained its leadership in deposits, credit cards, life insurance and residential mortgages — the latter driven by the introduction of Hibor-linked mortgages — in 2010. In the past 12 months it has also become a key driver of the development of offshore renminbi-related wealth management products, cementing its dominance of the consumer banking space in Hong Kong. While it is difficult for HSBC to sign up many new retail customers, given that it already serves more than 4 million of the city’s 7.1 million people, it was able to attract 670,000 customers to its new mid-market Advance service, which was launched early last year, and also increased the number of premier customers by 31% to more than 500,000. This suggests that a large portion of its personal customers are making a conscious choice to stick with the bank, which is arguably the best endorsement it can get.
Meanwhile, it increased its lending to corporate clients by 25%, driven primarily by Hong Kong and China, and continued to dominate Hong Kong’s cash management and trade finance businesses. The bank registered a 19% year-on-year increase in cash management revenue in the 12 months prior to April and a 23% increase in cash management deals won. It is also a leading supplier of renminbi services, and launched renminbi autopay capability in Hong Kong, four months ahead of the rest of the market. The bank also remains the number one provider of Swiftnet solutions in Hong Kong with nine Swift consultants, and introduced a new buyer-approved invoice finance product to meet corporate needs for early payment post invoice acceptance.
Meanwhile, HSBC’s dominance in both foreign exchange and Hong Kong dollar bond issuance has been unchallenged for years. And now it also tops the league table for dim sum bonds, having led 27 of the 48 issues during the awards period, including a string of firsts that helped drive the development of this new market. In FX, it makes markets in 90 currency pairs and, according to a Greenwich survey, it has an overall market penetration of 84% in Hong Kong, which is almost twice the 43% penetration by its closest competitor. Its overall market share of FX trading volumes is 19.7% versus 10.7% for the number two bank.
HSBC has also continued to improve its ECM franchise, which made a real leap forward last year, and while it isn’t the most active bookrunner among the domestic banks and brokerages — BOCI is — it is getting commended on the international style and quality of its business. It has also begun to leverage its lending relationships to win equity business, making use of a key advantage that it has previously failed to exploit to its full potential, and it is using its private banking relationships as a powerful distribution channel alongside its institutional sales platform. During the awards period it helped raise about $8.8 billion of equity capital for clients, up from $2.6 billion the previous 12 months, and had a leading role on deals like Hong Kong’s first renminbi-denominated IPO for Hui Xian Reit and the recent $500 million CB for Shangri-la Asia.
Together with its dominance in DCM and an advisory business that focuses on providing innovative and tailor-made M&A solutions for its major clients, this means we think it should also keep the title as Best Investment Bank in Hong Kong for the second year running.
BEST BROKER
BOC International
As Chinese money is playing an increasing role in the Hong Kong stockmarket, it is no real surprise that brokerage firms with a link to China are also increasing their presence. The investment banking arm of Bank of China, which was incorporated in Hong Kong in 1998, now serves more than 400,000 retail, private and corporate customers with a total portfolio of more than $23 billion and with a ranking ranging from third to fifth among 476 broker participants on the local exchange in terms of market share in each of the four quarters to March this year. Its sales distribution platform is also one of the largest in Hong Kong with more than 300 sales people, while its research team covers more than 200 Hong Kong-listed companies. This helped the firm win underwriting roles, including bookrunner positions, on 33 Hong Kong IPOs, placements, rights issues and convertible bonds during the awards period, which is more than any other local brokerage. For now, we feel this justifies its recognition as the top broker in Hong Kong. However, BOCI is clearly also leveraging its China relationships to get on deals and most of its ECM clients are still based in China. If it can diversify beyond that, it will soon become a contender for Best Equity House as well.
BEST FOREIGN BANK
Citi
This really is Citi’s award to lose, given that its strongest competitors — HSBC and Standard Chartered — are both viewed as domestic banks, but each year the US bank shows it has no intention of doing so. It continues to come up with new customised solutions for its more than 4,000 active corporate clients, which has led to strong growth in its global transaction services business and supported an 11% increase in total assets in 2010. In the past 12 months it has been particularly focused on the need for liquidity and treasury management as well as other solutions arising from the internationalisation of the renminbi. It also offers round-the-clock execution of deliverable offshore RMB.
But Citi is putting equal focus on its retail customers and in the past six quarters has doubled the number of retail branches in Hong Kong to 49 from 25. It is also leading the push for longer opening hours, which cannot be overrated in a city where few people work nine to five. For those preferring to bank on the go, it has launched a web-based mobile banking application that runs across platforms, including Apple’s iOS, Android and Windows Mobile.
On the investment banking side, it has helped clients raise more than $31 billion during the awards period across equity and debt and it is playing a key role in helping foreign companies list in Hong Kong — a trend that is allowing it to leverage its corporate relationships across the world.
BEST FOREIGN INVESTMENT BANK
Goldman Sachs
Goldman’s long-standing relationship with Li Ka-shing typically means that whenever Hutchison is busy in the capital markets, Goldman has a good year. This clearly helped its position in the past 12 months too as it worked on the $5.5 billion IPO for Hutchison Port Holdings Trust and the $3 billion syndicated loan that was linked to it, as well as a $2 billion corporate hybrid bond that it led on a sole basis for Hutchison Whampoa. However, the bank is working hard to penetrate other major Hong Kong accounts, and that paid off in the past 12 months in the form of sizeable follow-on mandates for Hang Lung Properties and Sino Land and a CB for Wharf Holdings — all of them on a sole basis. This shows a lot of faith in Goldman’s execution capability by companies that are all heavily banked and contributed greatly to the fact that it executed 85% more ECM volume than its closest competitor. It is also a key reason why we think Goldman is the obvious choice for this award.
The bank’s ability to generate repeat business came through in DCM, where it helped China Resources Power issue no fewer than three international bonds, including a five-year offshore renminbi deal that pushed the envelope by having the longest maturity by a corporate issuer in the dim sum market so far.
The bank also had a leading role on AIA’s record-breaking listing in Hong Kong and on the M&A side it advised ICBC on the privatisation of its Hong Kong subsidiary, ICBC (Asia), and Lee & Man Paper on its sale of a strategic stake to Japan’s Nippon Paper.
INDIA
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BEST BANK, BEST CASH MANAGEMENT BANK, BEST TRADE FINANCE BANK
HDFC Bank
HDFC Bank continues to be the platinum standard among India’s new breed of private-sector banks. It has now won both the best bank and best cash management awards for the fourth year in a row and completed the hat-trick this year by adding the trade finance accolade. This is despite the fact that the competition have upped their game. Both ICICI Bank and Axis Bank made big strides during the period under review. However, specialists we spoke to were categorical that HDFC Bank continues to lead the way in profitable, judicious growth and sustainable income.
HDFC Bank grew its network to 1,986 branches and 5,471 ATMs at the end of the latest financial year on March 31, up from 1,725 branches and 4,232 ATMs the previous financial year. This still places it behind ICICI Bank, India’s biggest private-sector bank, which had 2,529 branches and 6,104 ATMs on March 31 this year. However, HDFC Bank has been cautious in opening new branches, ensuring that the return on capital employed from each branch it opens is high. It grew its asset base while managing to shrink its non-performing assets ratio to 1.1% of gross advances as compared to 1.4% at the end of the previous year, a laudable feat and one that few of its competitors managed.
It won 700 new cash management mandates in the period under review, helped by its improved straight-through-processing framework and by making available a suite of customised solutions to a larger number of clients. The bank also increased its revenues by 50% during the period, based in large part on growing fee income and commissions, business expansion and client acquisitions.
On the other side of transaction banking, HDFC Bank’s fast-growing trade finance business, with its heavy emphasis on small and medium-sized enterprises and retail customers, helped it win more than 300 new mandates during the past 12 months, and increased its revenues by 30% to 40% across its trade-related products. In addition to increasing its trade finance offices from 105 to 199 (including opening an office in Hong Kong), the bank also launched a series of new products, including forfaiting and export bill discounting services.
BEST INVESTMENT BANK, BEST EQUITY HOUSE
Kotak Investment Banking/Kotak Securities
Investment banking in India is becoming fiercely competitive and international banks are all upping their game, forcing domestic players to work harder to compete and stay relevant. However, Kotak has proven itself more than a match.
The firm was present on a number of the top equity issuances in the period under review, including the Rs152 billion ($3.4 billion) initial public offering by Coal India and the Rs40 billion qualified institutional placement (QIP) by Adani Enterprises, the largest QIP ever in the Indian market. It worked on equity deals across industry sectors spanning consumer products, real estate and finance, to name a few. Kotak also worked both with repeat issuers that are well known to investors, such as Tata Steel, as well as first-time issuers such as SKS Microfinance.
SKS was also the first ever IPO in India by a microfinance company and hence required investor education to ensure robust demand. Kotak effectively managed this process and brought in a number of institutional investors. Kotak’s procurement in the qualified institutional buyer category was highest among all the lead managers.
Many of the large mandates in the mergers and acquisitions advisory space during this period have been won by international banks leveraging their global franchise, but Kotak still managed to play a role on some interesting deals.
Its mandates in the rupee bond space include two public issues each for State Bank of India and Infrastructure Development Finance Company. It raised acquisition finance for its clients and was one of the players instrumental in the revival of the non-convertible debenture market in India.
Kotak has active coverage of 164 stocks by a team of 30 research analysts. Through the 1184 offices of Kotak Securities, it has distribution capabilities across 450 cities and towns.
Perhaps the best testament to Kotak’s investment banking franchise lies in the fact that its international competitors always name it as their most effective domestic competitor. However, the new-generation players such as Edelweiss put up a strong showing in the period under review. And everyone is waiting to see how the combine of Axis and Enam evolves in the investment banking arena. Next year could well be a different story.
BEST BROKER
India InfoLine
We selected India InfoLine for this award in 2008. That was just after the financial services group, which was set up by a team of professionals in 1999, hired a team from CLSA and catapulted itself into the big league. This year again India InfoLine aggressively invested in its business to enable it to steal a march over its competitors. It got in-principle approval for securities trading and clearing in Singapore, making it the first Indian broker member of the city’s stock exchange. It also became a member of the Colombo Stock Exchange, becoming the first foreign broker to enter Sri Lanka.
The company offers advisory and execution platforms to more than a million clients, through over 3,000 locations across 500 Indian cities. India InfoLine also has offices in Colombo, Dubai, New York and Singapore.
India InfoLine has grown its market share in both retail and institutional broking and now actively covers 150 stocks. It has a different research product for both segments and specialists acknowledge that India InfoLine’s research is top notch. It continues to lead in the online, internet-based retail broking business and also counts a number of mutual fund and foreign institutional investors among its clients.
BEST BOND HOUSE
Axis Bank
This award is becoming something of a two-horse race — an annual contest between ICICI Securities Primary Dealership and Axis Bank. Participants on the ground say both firms run neck-to-neck. But by a whisker Axis Bank emerged dominant in India’s domestic bond markets during the period under review, winning this award for the second consecutive year.
Axis worked with Cairn India on an issuance of non-convertible debentures (NCDs), structuring an instrument that enables Cairn India to plan their cash flows while leaving enough on the table for investors to agree to buy the NCDs. This deal was done in October last year when Vedanta had already tabled a takeover proposal for Cairn India. It also successfully brought to market blue-chip issuers such as Housing Development Finance Corp, as well as debut issuers such as Talwalkar Bettervalue Fitness, a gym chain.
Axis’s deals have spanned the spectrum of ratings and it plays an active role in market making across all segments of corporate bonds. It has also been trying to increase the participation of retail investors in the secondary market for corporate bonds by selling smaller lots through its broker network and wealth management channel.
BEST FOREIGN EXCHANGE BANK
ICICI Bank
India’s largest private-sector bank is the perennial favourite for this title. Through its global markets group ICICI Bank offers clients foreign exchange services and products including forwards, currency and interest-rate swaps, plain vanilla options and forward rate agreements. In the period under review ICICI became the first Indian bank to offer its clients a currency-trading platform to enable them to take leveraged positions in the forex market. ICICI offers this service through its Singapore branch to clients across locations. Indeed, ICICI’s overseas branch network is a competitive advantage to the bank in offering its clients foreign exchange products.
BEST FOREIGN COMMERCIAL BANK
Standard Chartered
Standard Chartered wins this award in India for the second year running, testament to how the bank has emerged as a force to reckon with in the country. For the most recent financial year Standard Chartered had $2 billion of revenues from India and became the first, and to date only, foreign bank to deliver more than $1 billion of pre-tax profits. The compound annual growth rate of profit during the past five years has been a whopping 38%.
Wholesale banking drives Standard Chartered’s growth in India, but it has also made strides in consumer banking, with a focus on wealth management, deposits, mortgages and other businesses. And Standard Chartered is managing the growth of its retail business judiciously, perhaps hoping to avoid the pain that its competitors among both the foreign banks and domestic firms have had to face as a result of growing too aggressively.
Competitors suggest that Standard Chartered may not be covering their risk-adjusted cost of capital when using the balance sheet to win business. However, it counters that it has disciplined systems in place to ensure it is evaluating all business it does on a return on risk-weighted assets basis.
“Standard Chartered is managing that difficult balance — it has the appetite of an Indian bank for taking India risk but the approach and make-up of a foreign bank,” said a banker from a competitor firm about the bank’s strategy, summing up what makes the bank truly worthy of this award.
BEST FOREIGN INVESTMENT BANK
Citi
This has become one of the most difficult decisions we make each year. That is partly due to competitive pressure but also because the fee pool in India, in contrast to the rest of Asia, is shrinking. And we strongly believe that revenues are an important input into performance. But despite shrinking revenues, all investment banks are upping the ante in the country to gear up for future potential.
This year a number of banks made a strong case and the decision to award Citi, which continues a winning streak of a few years, was not a shoo-in. Bank of America Merrill Lynch had a strong year and even competitors concede that they are among the elite few who earned a reasonable amount of money this year. Morgan Stanley had a strong year in M&A and gained ground in ECM.
In the balance, Citi’s investment banking franchise stood out for the showing it put up across products, ECM, DCM and M&A. It generated repeat business from over-banked clients such as the Tata group and Reliance Industries, but also won business from new clients. Citi played a meaningful role on all deals on which it had a mandate and even won sole books business from clients.
Citi was also able to leverage its wholesale bank to earn money on mandates, which otherwise did not pay. Some specialists say that one business cross-subsidising another is neither a sustainable nor a desirable strategy. However, despite that, Citi rightfully earned this award this year, though we’d note that going forward it is likely to become even harder to hold on to it.
INDONESIA
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BEST BANK, BEST CASH MANAGEMENT BANK, BEST TRADE FINANCE BANK, BEST FOREIGN EXCHANGE BANK
Bank Mandiri
The largest Indonesian lender by asset size, Bank Mandiri is also recognized for its dynamic management and enthusiasm for innovation in a highly competitive domestic banking environment. In other words, it is not a slumbering giant. Instead, it has maintained the momentum of its recently completed five-year transformation plan, attracting more deposits and disbursing more loans while upgrading its systems. The state-owned bank now has 1,380 branches spread across three time zones in the Indonesian archipelago and six branches abroad, about 5,224 ATMs and five main subsidiaries. Yet, it booked a net profit of Rp9.2 trillion ($1 billion) last year, a 28.8% increase from 2009, which was due to a rise in net interest income and continued loan growth — including a large allocation to micro-credit borrowers. The bank maintained healthy returns on assets and equity, and has a strong risk-weighted capital adequacy ratio of 23%.
Mandiri leveraged its geographical footprint to increase the number of its small and medium-sized, middle-market and top-tier customers by 56%, 36% and 8% respectively. This impressive growth of the bank’s client base helped its cash management services generate almost 18 million transactions in 2010, amounting to a 189% increase over the previous year. In trade finance, Mandiri’s commanded a 12% market share in trade import transactions, 21% in export transactions and a 20% market share in the bank guarantee market. It launched a new suite of supply chain finance products in November and also introduced a series of new products to help clients tackle concerns over cash flow and liquidity. In foreign exchange, it is still the bank of choice for a wide range of corporate and retail customers because of the efficiency of execution and the professionalism of its employees, as well as the support provided by its network of overseas branches.
BEST INVESTMENT BANK
Mandiri Sekuritas
It might seem unusual to give this award to an investment bank that doesn’t take first prize in either of the individual capital markets categories, but Mandiri Sekuritas’s success lies in its all round abilities. Its mandates in the equity primary markets ranged from privatisations, initial public offerings, share buy-backs and advisory services. Significant transactions were the Rp2.68 trillion privatisation of Krakatau Steel, for which the firm acted as lead underwriter, as well as large IPOs in the corporate sector for Indofood Consumer Branded Products, Agung Podomoro Land and Harum Energy. It also jointly arranged share placements for XL Axiata and Bank Negara Indonesia. The XL Axiata transaction was the biggest Indonesian secondary market follow-on in more than 10 years.
Mandiri was no slouch in the debt markets either. For instance, it won substantial bond mandates for PLN, Telkom and Jas Marga, and was the most serious rival for Danareksa’s leadership of the bond league tables.
Across capital markets in general, Mandiri took pole position, with a combined bond and equity issuance underwriting share of more than 15%. The firm has a formidable placement capability, a solid research effort and reliable support facilities. The firm is also highly regarded by international investment banks.
BEST EQUITY HOUSE, BEST BROKER
Bahana Securities
Bahana Securities is one of Indonesia’s leading investment banking and brokerage firms, and has been involved in several landmark public and private transactions over the years. It has had notable success in equity capital markets, where it stood out from its competitors during the past 12 months, dominating the league table for market share with nearly 20% by deal value. It was an underwriter for almost all of the country’s major international equity primary market transactions, including Bank Negara Indonesia’s rights issue and share placement, and the IPOs for Krakatau Steel and Bank Jawa Banten. Its role as underwriter and bookrunner in the domestic market extended across sectors, such as aviation, banking, energy and mining, property and shipping, demonstrating the firm’s versatility and the quality of its corporate finance division.
Bahana replicated its strength in the primary market in its brokerage operation, suggesting that one reason for its ability to gain mandates is its placement power. It had the largest market share by turnover among domestic brokers and its predominantly institutional client base is made up evenly of local and foreign accounts. Bahana’s research team is especially highly-regarded, and is one of the few Indonesian firms that organises its analytics on sector-specific lines. Its positive calls on consumer stocks, telecommunications, construction and property have produced healthy returns for its clients. In addition, the team is bolstered by highly qualified and experienced economists and strategists.
BEST BOND HOUSE
Danareksa Sekuritas
Although Danareksa Sekuritas can rightly claim strength across all major investment banking activities, it faces stiff competition from domestic rivals. Indeed, it was surpassed by a couple of competitors in the other award categories. But, Danareksa’s pre-eminence in the local bond market remains unassailable. During the period reviewed, it led the rupiah debt underwriting league tables in terms of both market share and number of issues — and by some margin. The firm underwrote more than 30 issues and by value those deals accounted for more than 16% of the total. It was the lead bookrunner for 16 of them and structures included subordinated and zero-coupon bonds, and also sukuk. Prominent launches included a Rp3 trillion dual-tranche transaction for Telkom, which was the biggest corporate bond issued in 2010, and a Rp3 trillion sukuk for Perusahaan Listrik Negara.
Danareksa has a comprehensive fixed income department that includes a well-regarded research team as well as an aggressive sales and trading force. The firm’s trading system and distribution network extends across 14 cities in the archipelago, and its operations are supported by up-to-date technology that since 2009 incorporates cellular phone-based and online trading systems. Danareksa is equally proficient servicing institutional and retail customers.
BEST FOREIGN COMMERCIAL BANK
HSBC
It has been a difficult few months for several foreign commercial banks operating in Indonesia. Scandal, fraud and official criticism of some marketing techniques have hurt the industry. However, HSBC, which has been doing business in the country for more than 125 years, managed to avoid involvement in these problems and has continued to develop its franchise. The bank's assets increased 10% to Rp45.84 trillion in the first quarter of 2011 compared with the same period last year, mainly due to strong growth of current accounts and time deposits, which both surged by more than 20%. Net interest income also rose by 10%.
HSBC services a wide range of multinational and domestic corporate clients, as well as retail customers in the archipelago’s major cities, and through its Amanah Syariah business is in the vanguard of Indonesia’s Islamic banking initiatives. HSBC is now a significant provider of trade finance and cash management services, and is rapidly carving out a niche business among Indonesia’s growing middle class through clever marketing techniques and enhanced presence in local communities. In addition, it is able to offer the full spectrum of its global products and services and access to its easy-to-use internet banking operation.
BEST FOREIGN INVESTMENT BANK
Credit Suisse
Yet again, Credit Suisse retains its position as the top foreign investment bank in the country. Its success is largely due to its substantial presence on the ground, a strategy that differentiates the firm from most of its rivals, which use Singapore as the base for their Indonesian operations. It means that the bank wins mandates — plenty of them. Credit Suisse completed more than 30 transactions with a total deal value of more than $16.5 billion, at least two times the number and size achieved by its closest competitor. It was especially strong in M&A, notably acting for Bakrie affiliates in the sale of stakes in Bumi Resources and Berau Coal to Vallar, and advised on four major cross-border transactions. Its prominence in these types of deals is important as foreign interest in Indonesia is rising rapidly. The bank also headed the equity capital markets league table, completing eight domestic transactions, as well as five deals for Indonesian-owned companies listed on foreign exchanges. In debt markets, the firm’s position was less dominant, with two other foreign banks having a significant presence.
Credit Suisse has now won this category for the 12th time in a row, but in future its victory can’t be assured. Other international banks are clearly raising their game in Indonesia as the country marches towards investment-grade status.
MALAYSIA
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BEST BANK
Public Bank
Public Bank secures a 13th consecutive award as Malaysia’s best bank. Despite an uncertain global economy, Public Bank registered another solid financial performance with good profit growth during the period under review, based on strong growth in net interest and finance income, and higher non-interest income. Asset quality remains one of the bank’s greatest strengths, with an already low gross impaired loan ratio falling from 1.4% to 1.1% by the beginning of 2011, compared with a system average of 3%, despite strong growth in loans and advances of 13.8%.
Public Bank continues to be Malaysia’s most profitable and efficient bank with net return on equity comfortably above its rivals at 27.1%. Additionally, its cost-to-income ratio of 30.7% by the end of 2010 (improving to 30.4% in the first quarter of 2011) remains the lowest of any banking group and well below the industry average of 46.7%. The bank’s return on average assets of 1.8% in 2010 was also above the industry average of 1.5%.
Public Bank also strengthened its Islamic finance business, setting up a joint venture family takaful business at the end of last year. It also launched renminbi fixed deposits and current accounts to provide more options for customers of the bank’s foreign currency deposit account services, and opened almost 8,000 renminbi accounts last year.
BEST INVESTMENT BANK, BEST BOND HOUSE, BEST EQUITY HOUSE, BEST CASH MANAGEMENT BANK, BEST BROKER, BEST FOREIGN EXCHANGE BANK, BEST PRIVATE BANK
CIMB
A stellar year for CIMB with a fistful of awards reflecting an impressive performance across the business. On the equities front, CIMB helped its clients to raise a total of M$21.1 billion ($6.9 billion) during the period under review, including the mammoth M$14.8 billion Petronas Chemicals IPO. CIMB was also involved in six out of the 10 largest equity capital market deals, and led four out of the five largest IPOs, raising a total of M$17.4 billion. Additionally, the bank heads the secondary league table, completing deals worth M$3.7 billion and capturing a 36.3% market share. Its performance in equities was similarly impressive, commanding a 29.4% share of the domestic ringgit market that placed it well ahead of local and international banks. The bank also illustrated its technical abilities by successfully completing the first ever sukuk issuance by a Thai issuer in the domestic ringgit market. CIMB’s highly productive research house supported this strong capital market showing by consistently publishing market-leading write-ups throughout the year.
CIMB’s cash management performance was strong again this year, posting increased income of 95% between June 2010 and March 2011. The bank boasts a sizable client base of almost 310,000 corporate customers, including many of Malaysia’s leading companies. It won 240 mandates during the past 12 months, generating more than $15.5 million in revenue, in part through a series of products to support supply chain finance in the retail sector, as well enhanced Islamic cross-border transactions. Its internet banking platform also recorded a significant 21% year-on-year increase in registered clients.
CIMB’s market share in foreign exchange business ranged between 12% and 15% in spot flows and about 20% in swaps. It also launched a series of FX-linked structured investment products during the past 12 months, including an Islamic short-term FX forward of up to one year and three new FX-linked investment structures aimed at private banking clients. These innovations helped CIMB’s private bank drive up assets under management by 19% since June 2010, which has more than doubled in three years. Improved operational efficiency and a greater focus on client servicing and a greater range of products has helped grow the private bank’s revenue by more than 60%. In addition, fixed deposits/cash have risen by 36.4% and equity assets by 25% during the past 12 months, to round off an impressive year.
BEST TRADE FINANCE BANK
Maybank
With market share in trade flows of just under 25% and a client base of 18,000 corporate customers covering both conventional and Islamic trade, Maybank wins this year’s award for best trade finance bank. Maybank was the first Malaysian bank to offer a full range of trade finance products and services online. It is also successfully integrated its trade finance, cash management and foreign exchange businesses through both its web-based platform and through its network of more than 400 branches and 24 trade finance centres and sub centres, as well as through its footprint in overseas markets. Tackling some of the key concerns of its clients, the bank has extended open account loans to small and medium-sized enterprises to help them secure more flexible financing, extended risk-free financing to clients exporting to high-risk markets through its new risk-participation product, as well as introducing a collateral management arrangement to help firms free up cash flow. Such products have helped secure the bank a 19.6% market share of outward letters of credit, 24.3% of performance bank guarantees and almost 36% of the financial bank guarantee market as of February this year.
BEST FOREIGN COMMERCIAL BANK
HSBC
HSBC wins this award based on its strong franchise and performance during the year. Having lost out to Citi last year, HSBC’s return to form saw its pre-tax profit rise by 22.2% to M$984 million during 2010 from M$805 million in 2009, while the bank posted a 7.8% increase in net interest income from M$1.04 billion to M$1.13 billion during the same period.
HSBC’s commercial banking business grew by 50% in 2010, driven by earnings on assets and liabilities and improved asset quality. HSBC also has the largest consumer deposits of any foreign bank with market share of 6.1% at the end of 2010, while total customer deposits grew by 8%, mainly as a result of increased numbers of HSBC Premier and HSBC Amanah customers. A key cash management and trade finance player in Malaysia, HSBC accounts for about 11% of trade finance flows and is the only foreign-owned bank approved by the central bank to offer renminbi forward contracts onshore. The bank also strengthened its cash management services with 15 new hires covering sales and client services last year.
BEST FOREIGN INVESTMENT BANK
J.P. Morgan
Despite missing out on the Petronas Chemicals IPO, J.P. Morgan competed strongly in equity capital markets and in merger and acquisition advisory, involving some of the biggest deals of the past 12 months. These included acting as joint bookrunner for the $464 million Sunway Reit IPO, the largest real estate investment trust IPO in Malaysia, while the bank also successfully priced the $659 million IPO for Malaysia Marine and Heavy Engineering, which launched near the top of the M$3.6 to M$3.8 range.
J.P. Morgan was also joint global coordinator and joint bookrunner for CapitaMalls Malaysia Trust’s $247 million IPO. This last IPO, as well as the exchangeable bond restructuring for the Lion Group and the $250 million syndicated loan facility for the Parkson Retail Group (which marked the third debt deal by J.P. Morgan for the company since 2006), were repeat business showing the quality of the bank’s franchise in the country as well as some of the traction it enjoys with local firms.
On the M&A front, the bank booked repeat business from the Usaha Tegas Group for both the Tanjong $3.8 billion privatisation and for the $2.8 billion privatisation of the Astro All Asia Networks, headlining a strong showing from the bank in M&A.
PHILIPPINES
BEST BANK
Banco de Oro Unibank
BDO Unibank has posted faster growth and a stronger earnings rebound than its peers during the past 12 months. But, more important, it continues to win customers with its combined capabilities in corporate and investment banking, and its leadership in consumer banking and wealth management. With the Equitable PCI merger now fully cemented, BDO ended 2010 with more than a trillion pesos in total assets, to make it the first local bank in the Philippines to achieve this milestone. It grew customer loans by 15% during the year and took in 13% more deposits, surpassing average industry growth rates in these disciplines. The bank now claims a total market share of 21% for loans, 16% for deposits and 26% for trust assets. This focus on core lending and deposit-taking services has led to a strong increase in earnings, with the bank reporting a 46% jump in net income last year and a cost-to-income ratio of 66%. At the same time, BDO has been improving its asset quality (with an NPL ratio of 4.7% in 2010, compared to 5.6% in 2008) and boosting its capital adequacy ratio (to 14%, from 12.8% in the first quarter of 2010).
BEST INVESTMENT BANK
BDO Capital
When asked to name their most formidable domestic competitor, there isn’t an investment banker in the Philippines who doesn’t mention BDO Capital, the investment banking arm of Banco de Oro Unibank. It’s hard to believe that this business was established only 11 years ago. The brand, and the bank’s charismatic president Ed Francisco, are ubiquitous features in Manila’s deal-making circles. In the equity capital markets, BDO Capital was joint lead underwriter on San Miguel Pure Foods’ preferred share issue in February this year, and then acted as joint bookrunner on the domestic equity portion of San Miguel’s $880 million fundraising in April. It also conducted rights issues for Interport Resources, Semirara Mining and SM Development Corp. On these rights issues, the bank not only acted as issue manager and underwriter, but also advised the companies on the optimal rights structures to achieve their financing objectives. Over in debt capital markets, BDO Capital completed corporate note issues for Maynilad Water Services and Manila North Tollways, among others, and was domestic lead manager on a number of US dollar-denominated note issues for the likes of Vista Land and Travellers International Hotel Group. With the ability to draw on its parent’s balance sheet, and its expertise in origination, structuring and execution, BDO Capital will continue to be an awesome force in the Philippine capital markets.
BEST EQUITY HOUSE, BEST BROKER
ATR KimEng
With ATR KimEng playing a role in all key ECM transactions in 2009/2010, it was an easy choice as winner of this award. Add to this ATR KimEng Securities’ leading position as a broker on the Philippine Stock Exchange, and you have an equity powerhouse with some serious distribution clout. The firm was a lead underwriter on the IPO of Cebu Air in October last year and the IPO of Nickel Asia in November, helping to raise a combined $660 million for these companies. It also acted as joint bookrunner on the domestic equity portion of San Miguel’s $880 million fundraising in April this year; after a successful $346 million offering of preferred shares for San Miguel Pure Foods in February — a deal on which the firm acted as financial adviser to the issuer.
On the broker side, ATR KimEng Securities ranked second by value of turnover on the PSE between June 2010 and April 2011, with a 10.75% market share. The firm covers 97% of domestic equity institutional funds that actively trade the stockmarket, and it has a solid equity research offering, with its analysts regularly making insightful “buy” and “sell” calls. In February, for example, its analysts initiated coverage of Lopez Holdings, claiming the company was trading at a huge discount to NAV and was a buy at Ps4.63 a share. By May, Lopez’s share price had reached Ps6.20. Similarly, ATR KimEng upgraded its target on BDO in June last year when the shares were at Ps46; and by May this year, the price had risen to Ps62.
BEST BOND HOUSE
First Metro Investment Corp
First Metro stands out as the best bond house in the Philippines thanks to its dominance in peso-denominated corporate and government debt transactions. Its corporate client register is a who’s who of best managed companies. By its own figures, the bank controlled a 36% share of peso-denominated corporate debt issuance during the past 12 months. It has arranged fixed- and floating-rate note deals for a host of Philippines blue-chips, such as SM Prime, Smart Communications and PLDT, as well as Manila Water, Manila Electric, Aboitiz Power and Federal Land. One of First Metro’s biggest deals in this awards period was the Ps200 billion ($4.6 billion) domestic debt consolidation programme for the government in December 2010. First Metro was joint deal manager and joint deal arranger on the transaction, which involved issuing Ps184.5 billion of new benchmark 10- and 25-year bonds through a bond swap, the largest bond swap executed by the sovereign. It was the first debt consolidation initiative consisting of three transactions: an exchange offer, a tender offer and a subscription offer. And it was also the first time that an issuer in the Philippines had used a Dutch auction to determine the coupon rate.
BEST FOREIGN EXCHANGE BANK
Bank of the Philippine Islands
Of the top providers of foreign exchange services in the Philippines, little divides the biggest players. The Bank of the Philippine Islands (BPI) runs a close FX volume race with rival BDO, which are both riding high on robust trade and investment conditions in the country. This award goes to BPI for the strides its proprietary unit made over the 2010-2011 period, including a growth of 19% in USD/PHP interbank volumes, and a 35% increase in G10 trading volumes. BPI’s proprietary trading unit prides itself on offering competitive and consistent pricing to its counterparties and the bank’s treasury marketing unit, which handles the FX needs of its corporate customer base. The bank claims to capture an estimated 80% of the total FX requirements of its top onshore corporate accounts. The product suite offered to clients includes: FX spot, forwards and swaps; interest rate swaps; cross currency swaps; and asset swaps. Clients praise BPI for its timely views and insights on currency movements, and for explaining its products in a clear manner. “We always feel like an important client,” says one. “And, more often than not, their FX rates, prices and other treasury quotes are fair and competitive.”
BEST TRADE FINANCE BANK, BEST CASH MANAGEMENT BANK
Bank of the Philippine Islands
BPI was the first bank in the Philippines to offer online trade finance services and to integrate the cash and trade needs of corporate clients and SMEs, and it remains the market leader with impressive growth in both its cash management and trade finance services during 2010. The number of trade finance transactions handled by the bank grew to more than 26,000, while year-on-year business volumes grew by 21%, or almost $1 billion. The bank issued 6,208 letters of credit, totalling more than $1.1 billion, while its market share of MT700 Swift messages, net of domestic issuances, was almost 20%. Of note, while Swift volumes grew year-on-year by about 5%, BPI’s volume growth was almost 12.5%. Meanwhile, thanks to the bank’s improved Trade Alert via SMS automated notification system, BPI’s clients can now receive details on trade finance transactions more quickly, including details on letters of credit issuance, bank/shipping documents, import bills due and export proceeds received.
On the cash management front, BPI’s client base grew by almost 11% during 2010, with some important mandates won in both the financial and non-financial sectors. All three major product suites of collections, disbursements and liquidity saw numbers of transactions grow year-on-year by a total of 48.8%. Technology upgrades have allowed customers to make online payments through the most up-to-date host-to-host services of any local bank in the Philippines.
BEST FOREIGN COMMERCIAL BANK, BEST FOREIGN INVESTMENT BANK
Citi
For several years, Citi has won our best foreign commercial banking award in the Philippines, but this year it also picks up the best foreign investment bank accolade. In many ways, its leading position in the investment banking business goes hand-in-hand with its dominant wholesale franchise, which is exemplified by its solid loan book. The bank ranks fifth in the country in terms of loans, with more than $3.2 billion extended to customers as at March 31, 2011. In the area of global transaction services, Citi is now competing vigorously for domestic customers by building its capabilities in local currencies and working with Philippine conglomerates as they venture overseas. Meanwhile, Citi is doing more for its MNC customers and is further strengthening it cards offering — launching Citi prepaid cards in the country and booking close to 20 new mandates for its corporate and purchasing cards. On the wealth management side, Citi opened two Citigold wealth management centres within its Citibank Savings branches in the second half of 2010, bringing the total number of Citigold centres to five.
The highlight for Citi in the Philippines during the past 12 months has been its ability to beat other leading investment banks to work on some high-profile equity and debt transactions. Standouts were the $610 million IPO of Cebu Air in October last year, on which Citi acted as joint global coordinator, and two global peso bonds for the Republic of the Philippines completed in September 2010 and January 2011, which raised a total of $2.25 billion and on which Citi was joint global coordinator. In the year to April, Citi increased its headcount by 14%, suggesting it intends to continue to grow its thriving Philippines business.
SINGAPORE
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BEST BANK, BEST INVESTMENT BANK, BEST EQUITY HOUSE, BEST BOND HOUSE, BEST FX BANK, BEST CASH MANAGEMENT BANK
DBS
DBS continues to dominate Singapore’s banking industry and has a deeply entrenched position in the city state. During the past 12 months, the bank continued to be a leading player in mortgages, auto loans, debit and credit cards. The bank’s net profit rose 52% year-on-year for the first quarter of 2011 and was up 19% from the previous quarter.
The bank has an unrivalled deposit base and a vast network of more than 1,100 ATMs. On the institutional banking front, DBS has successfully used its balance sheet and strong local relationships to grow its business. Despite intense competition, DBS grew its market share in Singapore dollar business loans by more than two percentage points.
While Singapore remains the bank’s stronghold, DBS has also gained a foothold in Hong Kong — which is now its second largest market. As the offshore renminbi market gathers pace, among the three domestic banks, DBS has been best able to tap this nascent market through its Hong Kong franchise. By the end of 2010, it had the equivalent of more than HK$10 billion ($1.3 billion) of renminbi deposits.
DBS has made some missteps in its overseas expansion plans — such as its investment in Thai Military Bank — but its efforts started to bear fruit during the period under review.
On the forex side, DBS continues to flex its muscle. It has the largest Singapore dollar trading book globally and accounts for nearly half of all Singapore dollar-related flows within the Singapore market. It is the largest market maker for USD/SGD, as well as in Singapore dollar bonds, money markets and derivatives across various asset classes. It was also among the first banks to complete an offshore US dollar/renminbi forex swap.
The bank's sophisticated product array and comprehensive local presence has helped DBS win more than 300 new cash management deals in the period under review and record a 7% increase in cash management revenue. DBS has implemented a series of new services and also enhanced existing products during the past 12 months. In addition to a substantial investment in its DBS Ideal banking platform, which enables clients to save time and money online, the bank has also introduced a full suite of renminbi-related cash management products, including deposit and inward and outward remittance capabilities. In addition, improved Swift Score capabilities means clients can connect to DBS and receive payments through this channel.
In equities and bonds, DBS clearly leads the way and is far ahead of its domestic peers, though OCBC remains a keen rival in Singapore dollar bonds.
DBS was ranked second for all equity issuance for Singapore issuers, behind only Citi. It continues to have a strong presence in the Reit market — a key component of Singapore’s stock market. Notably, it was appointed as a joint bookrunner on Global Logistic Properties’ (GLP) S$3.9 billion ($3 billion) IPO and Mapletree Commercial Trust’s Reit IPO. DBS managed a total of 10 equity issuances, accounting for 21.9% of total equity proceeds.
DBS topped league tables for Singapore dollar bonds during what was arguably a watershed year for the market. According to Dealogic, it had a market share of 46.4%, more than twice that of its closest rival Standard Chartered, which had a market share of 19.5%. Noteworthy transactions included Temasek Holdings’ 40-year bond, the longest dated Singapore dollar bond in the market, Khazanah’s sukuk and Singapore Airlines’ S$300 million retail bond, the first retail bond to be issued in Singapore in more than a decade.
DBS continues to play a role in the M&A market with its continued focus on the mid-cap sector. It acted as a joint financial adviser to Ezra Holdings for its $400 million acquisition of AMC from Aker Solutions, among other deals. In contrast to its rivals OCBC and UOB, DBS has a strong presence in corporate finance and, given its activity across ECM, DCM and M&A, it is a deserving winner of the best investment bank award.
BEST BROKER
DBS Vickers
DBS Vickers continues to differentiate itself from its local peers thanks to its well-balanced institutional and retail presence. The broker is also backed by DBS’s strong equity deal flow, which helps it to provide better support for large-cap equity offerings than its rivals. DBS Vickers also has a better reach offshore and serves its foreign institutional investor base though a number of overseas offices. Its institutional investor client base generates 40% of its revenues while its retail investor base contributes to 60% of revenues.
The brokerage also has strong research capabilities with a sterling track record in its coverage of small- and mid-cap firms. It has research teams located on the ground in a string of Asian cities, including Shanghai, Kuala Lumpur, Bangkok, Jakarta and Seoul.
It has strong bench strength with an equity research team that comprises 50 analysts, providing detailed analysis on more than 400 listed companies in Asia, with views supported by macro perspectives from its strategists and economists.
BEST TRADE FINANCE BANK
OCBC
OCBC’s close integration with Singapore’s business community has helped the bank register impressive growth in its trade finance business. Overall, the bank’s year-on-year trade finance revenue in 2010 increased by more than 80% and trade volumes rose at a similar rate. OCBC has also doubled its market share in letters of credit which grew 12 times as fast the Singapore market rate. In particular, OCBC’s support for small and medium-sized enterprises (SME) has remained solid, with a new back-to-back letter of credit programme introduced within the last twelve months designed to make access to trade financing faster and easier for smaller firms which might otherwise struggle to find credit.
The bank has also secured a leading market position in renminbi trade settlement in Singapore. It was the only Singaporean participating bank in the original batch in the pilot renminbi cross-border settlement scheme, and has since made its entire suite of trade finance products available in renminbi. This includes hedging for clients selling to Chinese firms in renminbi and purchasing in another currency which has helped drive significant growth. Up to April this year, OCBC recorded 180% growth in its renminbi-denominated transaction volume compared to the second half of 2010.
BEST FOREIGN COMMERCIAL BANK, BEST FOREIGN INVESTMENT BANK
Citi
Citi continues to prove that its footprint in Singapore is second to none among foreign banks. Its retail presence is unparalleled, making it once again the best foreign commercial bank in Singapore. Citi is the biggest financial employer in Singapore and the bank has made the republic its strategic hub, particularly for forex, sales and trading, and regional management. Through a strategic partnership with SMRT, Singapore’s main public-transport operator, Citi has ATMs and branches at train stations across the city, further cementing its retail presence and helping the bank to penetrate Singapore’s heartlands. Three out of five ATM transactions take place at SMRT locations and the bank has registered 70% new-to-bank customers for credit cards through that channel.
Citi has a strong deposit base and its consumer banking business continued to register profitability across various lines, including deposits and secured and unsecured loans. Citi has a century-old franchise in Singapore and, while Standard Chartered and HSBC are rivals, both lack Citi’s clout.
The foreign investment bank category is very competitive in Singapore, but Citi wins it this year on the strength of its equities franchise. The bank was involved in all three of the biggest deals for Singapore issuers — namely GLP’s IPO, which was the world’s biggest real estate IPO, Mapletree Commercial Trust and Mapletree Investment Trust — and topped league tables for equity issuance for Singapore companies.
Citi has been quieter on the M&A front since the 2008 financial crisis, but market activity in Singapore has also been subdued. During the period under review, Citi acted as a financial adviser for Suntec Reit’s $1.16 billion acquisition of a one-third stake in the Marina Bay Financial Centre Towers.
SOUTH KOREA
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BEST BANK
Hana Bank
While its biggest competitors have struggled with disappointing earnings, deteriorating asset quality and boardroom scandals, Hana Bank has marched vigorously forward in pursuit of its ambitions to challenge their share of the domestic market. Its audacious bid for Korea Exchange Bank surprised most analysts, who expected an acquisition by an overseas bank. Although Korean regulators have not approved the deal yet — due to the controversial nature of the stake held by US private equity firm Lone Star — the deal was agreed by the commercial parties involved and Hana successfully raised the necessary funding through a combination of share and debt offers, subsidiary dividend payments and hybrid securities. Yet, despite the financial commitment and the organisational difficulties such a transaction would entail, its key profitability and capital adequacy ratios remain solid. Meanwhile Hana, which is Korea’s fourth-largest lender by asset size, continues to innovate in the domestic market, for example by its introduction of smartphone banking, and also to seek strategic alliances and grow its branch business overseas. This year it formed a partnership with China Merchants Bank and is busy looking for opportunities in India, Indonesia, Malaysia, Cambodia and Vietnam. Hana deserves credit for its enterprise as its rivals stumble.
BEST INVESTMENT BANK, BEST BROKER
Samsung Securities
The country’s leading and most respected brokerage, Samsung Securities has taken further steps to strengthen its investment banking business. It was a consistent performer in the debt and equity primary capital markets and provided a range of advisory services for its blue-chip corporate clients. But Samsung stood out for its singular drive towards achieving its regional ambitions, when Korean officials are encouraging all leading firms to expand beyond the domestic market. Samsung’s stated goal is to be among the top five Asian firms in the industry by 2015 and in the top 10 in the world by 2020. It has continued to expand its Hong Kong office and now employs 42 analysts, 24 traders and 10 investment bankers. Meanwhile, the number of its corporate clients has jumped from fewer than 30 in mid-2009 to around 250 now. Although Hong Kong will be the base for its regional operations, largely due to its proximity to the Chinese mainland companies it has already helped to raise capital, Samsung is staffing new offices in Singapore and Taiwan. There are also possible link-ups with Chinese brokerages planned, and the firm intends to turn Samsung’s Tokyo branch into a locally-incorporated unit by next year.
Samsung is clearly the most outward-looking of Korea’s investment banking and brokerage firms, and its domestic corporate finance and capital markets teams are well-respected by international bankers. It is also the best brokerage firm, especially because of its superior research capability, which enables it to attract deal flow in a highly competitive environment.
BEST EQUITY HOUSE
Daewoo Securities
The future of Daewoo Securities remains uncertain, but that hasn’t prevented the firm aggressively pursuing and winning equity mandates in the primary market, as well as maintaining a strong presence in secondary-market trading. The firm is controlled by state-owned KDB Financial Group and there have been official suggestions that it might remain part of KDB when the latter is eventually privatised — or be merged with Woori Investment & Securities. Daewoo led its domestic rivals in the equity capital market league table and was topped by only one international firm. Notable transactions include its role as lead manager for Doosan Heavy Industries and Construction’s rights issue in October 2010.
Daewoo is also taking steps towards building a franchise outside its local market, where it has 129 outlets. It recently quadrupled the capital of its Hong Kong office, which is the centre of its regional activities. It expects more foreign firms, especially Chinese, will list on the Korean stock market and that the Hong Kong headquarters should actively source deals. It also aims to help Korean firms list on the Hong Kong bourse. And, to attract more foreign investors, Daewoo plans to keep upgrading its direct market access business and recruit more analysts to provide English-language reports.
BEST BOND HOUSE
Woori Investment & Securities
Korea’s bond markets offer banks meagre money-making opportunities. Margins are thin in the highly competitive secondary-market trading business and, in recent years, fees for managing new issues have been pared for both domestic and international offerings. Yet, a firm can still earn regular and sufficient income by taking a substantial share of trading and distribution, and by participating in a high volume of primary transactions. Clearly, Woori Investment & Securities continues to believe that this strategy adds value to its overall investment banking franchise, with the additional benefit of building new corporate relationships and sustaining existing ones. The firm topped the league table for managing Korean bond issues denominated in G3 currencies, with a 7.3% share by deal value and 20 transactions to its credit. That even puts it ahead of the overseas banks — and they are normally aggressive pursuers of Korean mandates to help boost their regional league table positions. Woori was also the dominant lead manager of new domestic offerings and maintained its leading role in secondary-market trading. It was able to take advantage of the strong corporate relationships enjoyed by its parent, Woori Financial Group, and maintain the momentum it has achieved during the past few years by attracting repeat business.
BEST TRADE FINANCE BANK, BEST FOREIGN EXCHANGE BANK
Korea Exchange Bank
Korea Exchange Bank (KEB) still reaps the rewards of first-mover advantage. Of course, the seeds were sown by the Korean government in 1967 when it set up KEB as a specialist foreign-exchange bank, but it has grown its franchise to incorporate a vast range of sophisticated currency and trade finance products and services. Its market share of foreign exchange transactions exceeds 50%, which is more than double the share of its closest rival, and is a counterparty for most of the country’s leading corporations.
KEB also maintained its position as Korea’s preeminent trade finance bank. Its market-leading 31% share of exports and 29% of imports was accompanied by a series of significant additions and enhancements to its trade finance business. These included adopting Swiftnet’s trade services utility to encourage standardised shipping documents in an electronic format and also introducing a trade escrow service to provide an extra level of security for both exporters and importers. KEB has also launched a suite of renminbi products, including renminbi-denominated inward and outward remittances, foreign currency accounts and import and export transactions. In addition, the bank has simplified export-related documentation through its KT-Net import and export clearance system, making trade transactions easier and faster for clients.
The bank’s expertise, market dominance and business model makes it an attractive fit for any of Korea’s domestic banks keen to extend their international reach. Indeed, Hana is now anxiously waiting for a positive response from the country’s regulators to its acquisition plans.
BEST FOREIGN COMMERCIAL BANK
Citi
Citi is a substantial presence in Korea. It has the one of the biggest corporate banking operations in the country, combining its broad global products platform with local expertise initially gained from its purchase of local lender Koram in 2004. As a result, it has a significant share of the domestic cash management and trade finance markets, as well as being a major player in foreign exchange and custody services. In addition, Citi continues to expand its retail operation. It now has 224 branches and 65 consumer finance branches, which means that Korea is the third-biggest branch network for Citi globally, after the US and Mexico. Its Korean operations now generate more than 10% of its Asian revenues, and the bank still believes there is considerable room to grow, founded on an already healthy deposit growth and a return-on-equity last year of roughly 6%.
Citi formed a financial holding company in June that includes its commercial banking, consumer financing and financial product sales operations. Its investment and wholesale banking business remain separate. But one of its strongest divisions is wealth management, which, partly through strong brand positioning, is attracting new clients. In fact, service enhancement has had marketing benefits. Citi now has nearly 3,000 ATM branches, compared with fewer than 1,000 in 2009, meaning customers enjoy greater convenience and assimilate the Citi brand at the same time.
BEST FOREIGN INVESTMENT BANK
Bank of America Merrill Lynch
In previous years, more obvious candidates (some would argue) have typically won this category. But, this time, Bank of America Merrill Lynch stood out for both the volume and quality of its transactions in those sectors that were active. There were sparse pickings for foreign banks in equity capital markets, so they had to look elsewhere to make money. Bank of America Merrill Lynch was among the top three lead managers of new bond issues, and differentiated itself from those competitors by the range of its mandates and the variety of its deal structures. In a mixture of new and repeat business, it managed transactions for Korea’s biggest banks and major state-owned entities, as well as large domestic companies. In addition, the firm acted as bookrunner for Korean borrowers in other local markets, such as Malaysia and Japan, and, most notable, an offering for Korea Gas in Canadian dollars.
However, although its debt capital markets business was impressive, its mergers and acquisitions achievements were particularly striking. It headed the league table with an almost 20% market share and its transactions included advising KNOC for its successful unsolicited bid for Dana Petroleum. This was a landmark M&A deal for the country, being the first hostile takeover by a Korean company outside the domestic market. Another notable and highly profitable transaction was advising Korea Exchange Bank on the sale of its 34.9% stake in Hyundai Engineering & Construction.
TAIWAN
BEST BANK, BEST FOREIGN EXCHANGE BANK, BEST CASH MANAGEMENT BANK, BEST TRADE FINANCE BANK
Chinatrust Commercial Bank
Investors may be a bit hesitant about Chinatrust’s ambitions to move into insurance, but the bank’s domestic customers continue to stick by it, just as they did when it struggled with corporate governance issues and losses at its US subsidiary a couple of years ago. They do it for the same reasons that we give it these awards, because the range and quality of its banking services are still the best in the country — although Taipei Fubon Commercial Bank is getting closer as it continues to expand through acquisitions both on- and offshore.
On the retail banking side, Chinatrust maintains a leading market share in credit cards, wealth management, ATMs and internet banking, and in January 2010 became the first bank in Taiwan to launch a mobile banking platform that offers a range of services, including bill payments and mutual fund investment. It too is a market leader with more than 100,000 subscribers.
With the knowledge that 1.23 million people in Taiwan own small and medium-sized enterprises, the bank has launched a “one bank” project that shares information on SME customers between retail and institutional banking to increase the cross-selling of products. This contributed to a 63% increase in sales volumes of wealth management and lending products last year and 55% profit growth for the retail banking group.
On the corporate banking side it remains the go-to domestic bank for transactional banking and foreign exchange and in the past few months it has been increasing its lead versus the competition in derivatives across asset classes. It offers a wide range of FX hedging and investment products as well as 24-hour trading in G7 and regional currencies from its branches in Taipei, Hong Kong and New York. It is currently the only Taiwan bank to stay open for FX trading around the clock.
Its corporate clients also benefit from its strong lending franchise. Last year it arranged 63 syndicated loans, of which 16 were for debut borrowers, and closed 18 structured finance transactions.
And while Chinatrust isn’t Taiwan’s largest trade finance bank — though its revenues rose by 28% last year — it remains one of its most innovative. Responding to the market need, the bank set up a structured trade and commodity finance programme in Singapore in November last year, which by March had already generated volumes of $222 million. The bank also leads the way in renminbi products with its multi-currency letter of credit (LC) negotiation product in Hong Kong enabling renminbi-denominated LCs to be discounted in US dollars, catering to growing client demand for renminbi-related arbitrage solutions. Last year the bank’s asset balances increased by 78% and it had a 15.5% market share in factoring. It also boasts the most widespread physical and electronic cash management network of any Taiwanese bank.
Having sorted out its US exposure, Chinatrust was able to grow its net profit 10-fold in 2010 on a 14% increase in revenues and lifted its return-on-equity to 10.6% from just 1% the year before. This has led to renewed optimism among investors, who are also supposedly relieved that the bank is buying the Taiwan insurance unit of MetLife rather than AIG’s Nan Shan business. The share price has outperformed its Taiwanese peers during the awards period and the portion of its shares held by international investors has increased to 52% by the end of April from 42% a year earlier.
BEST BROKER, BEST INVESTMENT BANK
Yuanta Securities
With a market share that is consistently around 11%, Yuanta dominates the exchange-based equities trading in Taiwan. It is also the market leader in margin financing and stock lending and has the largest retail customer base with 650,000 active clients, as well as a strong following among institutional investors. It offers trading of futures, bonds, bills, asset-backed securities and sub-brokerage for foreign securities. And it issues and trades other types of securities such as warrants, structured products and derivatives.
The brokerage business is supported by 25 analysts who covers companies throughout the Greater China region and provides strategic industry analysis and quantitative research. In the third quarter last year, when the benchmark Taiex index was below 7,600, it advised clients to buy into the weakness and in August it projected the index would reach 9,000 by the first quarter 2011. Investors would have done well to follow its advice as the Taiex hit 9,000 on the very first trading day this year.
Brokerage is still the biggest earner for the firm with close to 60% of its revenues coming from brokerage commissions in 2010 and 47.5% in the first quarter this year. But over the past few years, Yuanta has grown into a well-rounded investment bank that ranks among the top performers in equity and bond underwriting and M&A advisory. While it didn’t clinch the top awards for either equity or bonds this year, it was right up there in terms of volumes and did bring a number of interesting trades to market, including the $200 million IPO for TPK Holding, which a lot of banks tried to get on, but Yuanta lead-managed on a sole basis. It also arranged the IPOs for four of the seven foreign companies that listed in Taiwan in 2010, of which three took place during our awards period from June 2010 to mid-May 2011.
Meanwhile, the firm’s deep-rooted client relationships helped it clinch advisory roles on a number of key M&A transactions, particularly in the tech sector. It worked with Far EasTone Telecommunications on its $649 million cash tender offer for fixed-line affiliate New Century Infocomm, and advised both parties on the joint venture and share swap between Sino-American Silicon Products and Solartech Energy. It is also working on the $1.05 billion acquisition of components maker Yageo Corp by private equity fund Orion Investment (which is jointly owned by Yageo’s founder and KKR), as well as two other deals, which aren’t yet closed.
And Yuanta is looking to get even stronger once it completes its merger with Polaris Securities later this year. However, with a 15% combined market share of securities brokerage in Taiwan, the enlarged firm will have a lot to live up to.
BEST EQUITY HOUSE, BEST BOND HOUSE
KGI Securities
The merger with Taiwan Securities in 2009 gave KGI a bigger distribution platform as well as a bigger customer base, and in the past 12 months this has shown through in its equity capital markets business in particular. Yuanta Securities is still a formidable competitor and in terms of volumes the two are neck to neck. They have lead-managed six IPOs each and while Yuanta is taking the lead on follow-ons, KGI has an edge in convertible bonds. However, industry watchers remark that Yuanta isn’t as aggressive in terms of going after deals as one might expect from the long-term market leader and this, together with the strong line-up of deals brought by KGI convinced us that it deserves this award.
Among the deals it brought to market were a NT$1.7 billion IPO for Giga Solar, which was priced at a record high offering price of NT$500 per share; two Taiwan depositary receipt issues for Hong Kong-listed China Digital and Japanese DRAM manufacturer Elpida Memory, which at NT$4.26 billion and NT$7.85 billion were the largest TDR issues in 2010 and 2011 respectively; and a NT$4.5 billion domestic CB for Catcher Technology, which supplies metal casings for Apple’s iPhones, iPads and iMacs and is one of the top performers in the Taiwan market in the past 12 months.
After a taking a conservative approach to the underwriting of corporate bonds amid the weak credit markets in the second half of 2009, KGI was back in full form in the bond market too. It topped the league tables for new issuance during the review period — in the second half of 2010 at a considerable margin to the closest competitors — and stayed active in the secondary market. It lead-managed 16 transactions, many of them jumbo deals for blue-chip issuers such as Taipower, CPC, Wan Hai Lines, Taiwan Cooperative Bank and Land Bank of Taiwan, and participated on another 29 as a manager. It also lead-managed the first and only securitisation in Taiwan since the 2008 credit crisis in the form of a NT$5.3 billion deal for Chailease Finance.
KGI also continues to work with the regulators to improve the domestic bond market and among other things has suggested allowing Taiwan companies to issue offshore Renminbi bonds to expand their funding sources and to adopt cash settlement in the bond futures market to help improve liquidity.
BEST FOREIGN COMMERCIAL BANK
Citi
After three straight years with a pre-tax profit just above $400 million, Citi grew its profit by 41.5% last year to $634.7 million — making it the top earner among all Taiwan banks, including the domestic ones. Part of the improvement is due to the successful integration of Bank of Overseas Chinese, which it acquired in 2008, and the better economic environment, but Citi is also reaping the benefits from its continued investments to support its clients.
In the fourth quarter last year it upgraded 20 of its 65 branches to smart banking branches, offering customers a new banking experience and the tools to do their own electronic transactions. Another 13 branches will follow this year.
In August last year it introduced a mobile banking platform that aside from fund transfers and bill payments also offers a marketplace for transport tickets, super markets, and TV shopping merchants. The platform has already attracted more than 130,000 unique visitors.
Meanwhile, its corporate banking franchise continues to offer a wide range of local and cross-border products and services, such as treasury and transaction services, corporate lending, underwriting and M&A advisory. To support cross-border payment needs, Citi has enhanced its WorldLink service to allow customers to initiate and manage multi-currency payments, through a single account. The service is available for more than 135 currencies and 180 countries.
Another example of how it is thinking outside the box to support its clients is the $50 million export agency financing it arranged for Green Energy Technology to help it fund the purchase of new equipment. Insured by the Swiss export credit agency, this was the first EAF financing in Taiwan for many years and resulted in better terms for the company than it would have achieved in the traditional loan market.
BEST FOREIGN INVESTMENT BANK
Morgan Stanley
This was one of the toughest Taiwan awards to decide on this year, partly because the market has been more active than usual, resulting in good deals from several banks, and partly because quite a number of M&A deals have yet to close, which means the league tables don’t quite correspond to the level of business done during the year. On the equity side, Citi and J.P. Morgan were the most active with five and six deals respectively, but each of them had only one closed M&A transaction. Morgan Stanley worked on six M&A deals, of which three are completed, but was less active than the other two in ECM with only three deals. J.P. Morgan advised Carlyle on the sale of cable TV operator Kbro, which at $1.8 billion was the largest completed M&A deal in Taiwan in the past year and nearly got it over the line.
In the end though, we felt that Morgan Stanley has had the most diverse franchise across both equity and M&A and that its continued work on the consolidation of the Taiwan securities industry is something that will set its mark on this entire industry for a long time to come. During the awards period it advised Taiwan International Securities on its sale to Capital Securities and worked with Polaris Securities on its sale to Yuanta Securities in a $1.7 billion transaction that fetched the largest ever price-to-book multiple (1.73x) for a Taiwan securities M&A. The latter is expected to close later this year.
Morgan Stanley also advised Far EasTone on its $650 million cash tender offer for 26.7%-owned fixed-line affiliate New Century InfoComm, which simplified the group structure and strengthened Far EasTone’s position as an integrated telecom provider.
Its three equity deals included a $500 million convertible bond for United Microelectronics Corp that was linked to the new Taiwan dollar and came with a negative yield; and a $522 million block trade in Fubon Financial that was done at a tight 3.8% discount.
Some say Morgan Stanley has been less visible in the equity market since its former country head left in July 2010, but given how active it has been on the M&A side, it is hard to fault that.
THAILAND
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BEST BANK, BEST BOND HOUSE
Siam Commercial Bank
Siam Commercial Bank (SCB) has built a reputation as an aggressive and savvy player, and that shows in its performance. During the first quarter of 2011, the bank’s net profit rose 105% over last year, to a record high of Bt13.1 billion ($430 million). Even after stripping out a one-time investment gain of Bt5.1 billion, the quarterly profit of Bt8 billion is still a historic high. The bank also achieved an impressive 20.1% loan growth, boosted by wholesale, SME and auto lending.
During the period under review, SCB’s network maintained its market-leading size, with 1,026 branches and 8,096 ATMs across the country. According to one rival, the bank aggressively cross-sells across various products and has been successful in winning business. The bank has also been actively seeking new growth channels and has bought additional shares in Siam Commercial New York Life Insurance in a bid to grow its bancassurance business.
With potentially tumultuous elections just round the corner, these are tricky times to be a bank in Thailand. However, SCB, which was established by royal charter more than a century ago and is owned by the Crown Property Bureau, is considered a beacon of stability by a population that reveres its current king.
On the bonds side, SCB was second in the league tables after raising $1.19 billion versus top-placed Kasikornbank, which raised $1.58 billion (including a $230 million self-led deal). It was a close fight, particularly as both banks arranged a number of bond issues together, including PTT’s Bt4 billion 100-year landmark bond.
However, SCB managed to distinguish itself thanks to its role as a sole lead on Ratchaburi Electricity’s Bt13.3 billion bond. The debentures were split into 13 tranches to match Ratchaburi’s loan repayment profile. While this is not the first time a series bond has been issued in the baht bond market, the deal stands out in what is generally considered a vanilla market with thin fees. Aside from that, SCB also featured on deals for Banpu, Don Muang Tollway and Mitr Phol Sugar.
BEST INVESTMENT BANK, BEST EQUITY HOUSE, BEST BROKER
Phatra Securities
Phatra has occupied a niche role in the Thai market as one of the few standalone domestic investment houses that lands deals without the help of a balance sheet.
The past year was a recovery period for the kingdom, but the continued political uncertainty was hardly conducive to launching equity deals. Quick execution was the key to launching successful deals and Phatra capitalised on that by acting as a bookrunner on four overnight placements.
The bank also acted as a bookrunner on half of the top 10 equity deals during the period, more than any other firm — domestic or foreign. It seized a 23.4% market share, which placed it at the top of the league tables.
Phatra acted as a bookrunner on the two biggest equity deals — the $1 billion sell-down in PTT Chemical, the largest block out of Thailand, and Thai Airway’s $487 million preferential offering. The latter marked a successful turnaround story for a national carrier and its completion was no small feat given the political uncertainty.
On the M&A front, Phatra was also active in advising Thai clients, including Bangkok Dusit Medical Services on its $331 million acquisition of Health Network. Phatra was also an independent financial adviser to Banpu on its acquisition of Centennial Coal. Thanks to its strength in the equities and M&A businesses, Phatra is a deserving winner of the best investment bank award.
On the brokerage side, Phatra has a strong institutional presence, with an 11.8% and 8.8% market share in local institutions and foreign institutions respectively in the first quarter of 2011. Through its agreement with Bank of America Merrill Lynch on the brokerage side, it has access to international investors and strong distribution strength. The demand generated for its equity deals is testament to its strong brokerage services. Its research, co-branded with Bank of America Merrill Lynch, is also well-recognised within the market.
BEST FOREIGN EXCHANGE BANK, BEST CASH MANAGEMENT BANK, BEST TRADE FINANCE BANK
Kasikornbank
Among the domestic houses, Kasikornbank stands out on the foreign exchange front for a number of reasons, including its strong market share, focus on small-to-medium enterprise customers and its market leadership for renminbi settlement in Thailand. The bank also boasts the largest force of foreign exchange staff, including 44 dealers.
Kasikornbank enjoys more than 20% market share in forex volume and is a leader in Thai baht forex and derivative products. It has a diversified customer base, ranging from small enterprises to multinational companies.
Kasikornbank was the first bank to offer forex options to SME customers and this focus has borne fruit: its forex options revenues from SME customers rose almost five-fold last year. The bank was the first to initiate the RMB/THB deliverable forward as a hedging instrument for renminbi settlement for trade finance activities. To date, it is the top provider of renminbi settlement in Thailand with a 35% market share.
Launched in November last year, Kasikornbank’s corporate mobile payment solution is an example of why the bank remains the leading cash management bank in Thailand. This is the first time a Thai bank has applied mobile technology to real-time payments. The service will help Kasikornbank’s business-to-business and business-to-consumer buyers settle payments for goods and services via the bank’s corporate mobile payment services rather than through traditional cheque payments. The bank also boasts almost 900,000 cash management customers and has won more than 53,000 mandates since June 2010.
The bank also remains a key trade finance player. In an uncertain global trade environment, Kasikornbank has provided its clients with greater risk mitigation through its membership of the International Financial Corporation’s global trade finance programme and the ADB’s trade finance facilitation scheme, which guarantee the credit risk of issuing banks in emerging countries, supporting transactions that the bank cannot cover on its own. These programmes cover a range of instruments including letters of credit confirmation, pre-shipment finance, post-shipment finance, bank guarantees, bankers’ acceptances and loan syndication. The bank commands just under 23% of trade flow market share in Thailand.
BEST FOREIGN COMMERCIAL BANK
Citi
Citi continues to have the most diversified business among its foreign peers. It offers a full suite of services across consumer, corporate, investment and private banking that is unrivalled by any other foreign bank. It outperforms its foreign peers HSBC and Standard Chartered — in terms of revenues and profits — despite having only one branch in Thailand.
Amid volatile market conditions, Citi has focused on its annuity business, which generates steady flow business. Its cash management business continues to thrive and is one of the key contributors to earnings. Citi has a wide ranging presence in foreign exchange and treasury, trade finance, custodian services, lending, securitisation and capital markets. On the consumer front, it is a leader in the credit card and personal loan business.
Citi Thailand serves more than 1,500 of Thailand’s largest corporate and multinationals — and as Thai companies have expanded overseas, Citi has supported them. The bank is also a large financial employer in the kingdom with a headcount of about 3,800 people in Thailand.
BEST FOREIGN INVESTMENT BANK
Morgan Stanley
Morgan Stanley has closed a wide range of deals in Thailand, including equities, M&A and bonds during the period under review. It closed a landmark dollar bond for Bangkok Bank and, while some criticised the deal for being priced too cheaply, it was a rare sole mandate and Morgan Stanley snagged this on the back of a legacy relationship with the bank.
Also noteworthy were its equity transactions, including a $327 million convertible bond for BTS Group, which was the first letter of credit-backed convertible from Thailand that was denominated in baht but settled in dollars. In addition, Morgan Stanley was also a bookrunner on a number of other chunky trades, including Thai Airways’ preferential offer, Indorama Ventures’ $395 million block trade and Fabrinet’s IPO, which was the first New York Stock Exchange IPO for a Thai company. On the M&A front, Morgan Stanley acted as a sole adviser to Thai Union Frozen on the acquisition of MW Brands, in a deal that transformed Thai Union into one the world’s biggest seafood producers with a strong global presence.
VIETNAM
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BEST BANK
Techcombank
This year we give this highly competitive award to Vietnam Technological and Commercial Joint Stock Bank, commonly known as Techcombank, which is one of the fastest growing commercial banks in Vietnam. During the period under review, it swiftly expanded its network by opening 94 new branches. With its extensive network spanning nearly 300 branches and more than 1,000 ATMs, it is well placed to serve the country.
It has a solid partnership with HSBC, which has a 20% stake and gives it an edge in retail and finance, but also in risk management, a key aspect given how quickly it is growing. Both its total loans and total deposits grew by a remarkable 61% and 76% respectively in 2010. But at the same time, it has reduced its non-performing loan ratio, reporting a 2.29% ratio in 2010 as compared with 2.49% in 2009. For the first time, profit before tax of Techcombank exceeded $100 million as of the end of 2010, which enabled it to maintain the top position among commercial joint stock banks. It now serves more than 45,000 enterprise and 1.3 million individuals in the country, an increase of 17% and 62% respectively compared with 2009. And it appears to have no intention of letting off the accelerator, which is a positive endorsement given the general negative sentiment clouding Vietnam’s outlook. Its aggressive plans for the rest of the year include reducing its NPL ratio to 2.04% and expanding to 360 branches.
BEST INVESTMENT BANK, BEST BROKER
Saigon Securities
Despite the downturn in Vietnam during the period under review, SSI still stood head and shoulders above the competition by being the only firm that was present on debt, equity and M&A deals in a meaningful way. In terms of capital raising services, SSI raised more than Vnd6.7 trillion from the market during the period under review, 48% of which came from bond issuance. It advised on five corporate bond issuance deals and it was the domestic financial adviser on the $90 million offering by Hoang Anh Gia Lai, which was the first and largest cross-border Vietnamese bond issuance. At the same time, it raised Vnd3.5 trillion in equity issuance, a 21% increase during the same period under review last year. It also listed 11 companies. On the M&A front, it advised the buy-sides on two non-controlling deals in the port industry and oil and gas industry.
SSI continues to dominate the brokerage story in Vietnam, though a nod should be given to ThangLong Securities, which is increasingly building its business. Still SSI has built up strong relationships with large local and foreign financial institutions, as well as local listed and unlisted companies. It’s the leading brokerage house in big-block transactions. And it has a powerful mass-market reach through its 11 offices across the country. Though not nearly as sexy a point to tout, but an important one, it has a solid infrastructure, which makes it reliable, and in Vietnam that isn’t always a given.
BEST EQUITY HOUSE
VietCapital Securities
VietCapital Securities didn’t handle the lion’s share of deals during the period under review, but it did work on some key ones. It was the lead adviser for the IPO of PetroVietnam Gas, as well as its privatisation and strategic placement with Morgan Stanley. While the IPO only sold 3.5% of the company, or $90 million, the privatisation of PV Gas was the largest in the history of Vietnam to date. This IPO was extremely important for the market in that it was the first major IPO since the SOE privatisation programme was put on hold in the midst of the financial crisis. Not only did it show that the government was back on track with its highly anticipated privatisations, but it underscored that even the largest companies would be sold. VietCapital Securities was also the sole adviser and manager for four other privatisations and IPOs – for An Giang Electricity and Water, Binh Dien Fertilizer, An Giang Export and Import and My Thoi Port.
Furthermore, VietCapital Securities, which also produces excellent research reports, has been building a solid relationship with foreign investors. For example, it handled a private placement of Vinamilk, which is arguably the most sought after company in Vietnam by foreign investors. The placement was made to foreign institutional investors only, was six times oversubscribed, and the shares were placed at a 25% premium to market at the time of close, confirming the thirst that foreign investors have for quality Vietnamese companies.
BEST CASH MANAGEMENT BANK, BEST TRADE FINANCE BANK
Techcombank
Vietnam’s second most profitable joint-stock bank in 2010, Techcombank’s transaction banking focus has driven growth in both cash management and trade finance businesses over the last year. With the fastest growing branch network in the country consisting of more than 300 branches and trade service centres nationwide, the bank won 5,709 new corporate clients since June, 2010 taking total corporate customers to almost 50,000. Techcombank was the first bank to connect with all the card systems in Vietnam, and is one of the few domestic banks with a specialised cash management team and with a technology platform able to execute online.
Techcombank’s comprehensive suite of trade finance products helped it record about $7.5 billion in transaction value across its trade finance network in the last twelve months. Catering to key local exporters, the bank ha s also launched a series of new segment-specific trade finance products in 2010 for firms in key food product industries. In addition, it launched a series of products to assist clients with financing requirements based around wide distribution networks.
BEST FOREIGN COMMERCIAL BANK
HSBC
HSBC won this award because its banking decisions may be good for Vietnam, if not necessarily for HSBC. Vietnam’s economy is a mess – inflation has been among the highest in the world, accelerating throughout the year and indeed hit 19.8% in May compared to the same month a year earlier. The government has failed to guide the economy and is saddled with an ever-devaluing dong. So HSBC’s decision to increase the number of loans it dispersed, racking up 130% increase in 2010 over 2009, and increasing the number of credit cards in force by 99% over the same period, could appear reckless. Or, you could take the view that HSBC has faith in Vietnam, and has seen it ride this wild economic rollercoaster before. HSBC has made a conscious decision to bank Vietnam’s middle and large corporate segment, focusing on those that are actively involved in international trade. The bank has taken the view that these companies will grow and remain loyal to HSBC.
This year, HSBC was closely rivaled by Citi, which has grown its business significantly in Vietnam. On the consumer front, both HSBC and Citi are leading by offering internet banking solutions, and hats off to Citi for launching one of its new-fangled smart banking branches in Ho Chi Minh. The difference, for us, though, was who put more faith in going out on a limb for Vietnamese companies and small borrowers. Citi banks many of the multinationals doing business in Vietnam, and handles a huge percentage of the remittances from the US that have been critical to growing the nation’s economy in recent years; from a risk and relationship-management perspective, this is sensible. If the economy continues to nose dive, HSBC could rue its decisions to lend to smaller companies; but for the period under review, HSBC was there to help grow a nation.
BEST FOREIGN INVESTMENT BANK
Citi
After Vinashin failed to make a $60 million repayment in December on a $600-million loan arranged by Credit Suisse in 2007, investors looking at Vietnam become incredibly nervous. Concerns about whether or not they could get their money out of the nation were already rife, this was a nail in a coffin. So to talk about traditional investment banking in Vietnam is to talk about a very, very small business. There are M&A deals to be done, for sure, but most are for so little wallet-share, they don’t hit the radar screen of interest for multinational banks and are handled by law firms and accounting houses or the smaller, local banks.
This year’s pitches talk mostly about mandates for next year. However, perennial winner Credit Suisse did close a buy-side advisory transaction on behalf of KKR, which acquired a 10% stake in Masan Consumer for $159 million. But Credit Suisse also has the long shadow of the Vinashin deal to answer for, and those questions are coming up this year.
Meanwhile, Citi also brought some foreign interest to Vietnam, working as the exclusive financial adviser to Diageo on its $55 million acquisition for a 24.9% strategic stake in Halico, Vietnam’s largest alcohol producer. Citi also raised close to $3 billion from the capital markets during the period under review, including National Power Transmission’s $200 million insured-term financing, Vietnam Airlines’ $400 million ECA-backed term loan and Nhon Trach 2 Power’s $470 million loan, making it the clear-cut foreign investment bank winner in Vietnam for this year. These deals add up to make it the credible leader in investment banking in Vietnam during the period under review.
BANGLADESH
BEST FOREIGN COMMERCIAL BANK
Standard Chartered Bank
Standard Chartered continues to dominate in Bangladesh, where it has had a presence for more than 100 years. With 26 branches, 86 ATMS and 18 financial kiosks (up from 71 ATMs and six kiosks from last year), no other foreign bank comes close to competing with it. It holds more than 50% of deposits and 50% of loans and advances of the total deposits and advances held by the major foreign banks in the market. At the same time, Standard Chartered achieved a balance sheet growth of 20% during the period under review as compared with the same period last year. Its revenue for 2010 was Tk23.4 billion ($190 million), 13% more than in 2009, which is the highest among the foreign banks in Bangladesh.
While earning revenue is surely every bank’s aim, Standard Chartered has also been involved in helping the nation gain status. Bangladesh received its first-ever sovereign ratings for the country in 2010 from Standard & Poor’s and Moody’s. S&P assigned BB- as sovereign credit ratings to Bangladesh, marking a breakthrough for the international image of the nation — and Standard Chartered Bank was a joint mandated advisor and closely partnered Bangladesh Bank in all aspects of the process.
PAKISTAN
BEST FOREIGN COMMERCIAL BANK, BEST FOREIGN INVESTMENT BANK
Standard Chartered
Standard Chartered is the biggest international bank in Pakistan with a network of 144 branches across 33 cities in the country and a paid-up capital of PKR38.7 billion ($451 million). It started operating in Karachi in 1863 and has continued to operate in the country for 148 years, through some turbulent times, evidencing its strong commitment to the country. Standard Chartered enjoys a AAA/A1+ rating in Pakistan, the highest ratings awarded to any private-sector commercial bank by the Pakistan Credit Rating Agency and was the first international bank to obtain an Islamic banking licence in Pakistan, in 2004, and has effectively leveraged this to expand its Islamic product offering and client base.
Standard Chartered’s structured trade finance and financing solutions group closed eight deals during the period. The bank was effective in ensuring that the complete suite of products and services it offers were available to its clients — for example, getting its derivatives team to offer interest-rate swaps, cross-currency swaps and other hedging solutions for its capital markets clients.
During the period under review, despite challenging market conditions, Standard Chartered worked on a number of innovative investment banking deals. It has a leading position in the league tables for Pakistan rupee-denominated financing in the bonds and loans markets, and has led local currency league tables for the past four years. The capital markets origination and execution team has worked on loans, bonds, sukuks, commercial paper, asset-backed securitisation and convertible bond deals. Clients Standard Chartered worked with during the period include Pakistan National Shipping Corporation, Karachi Electric Supply, Water and Power Development Authority and Engro Foods Supply Chain.
SRI LANKA
BEST BANK
Commercial Bank of Ceylon
For the third year in a row, Commercial Bank of Ceylon wins this award, as it continues to stand out as the dominant bank in the country. In 2010, which is part of the period under review, it record a SLR5.52 billion ($50 million) profit after tax, which it says is the highest profit after tax recorded by a local private bank for the year. It also was a 28.3% increase on its profits in 2009.
Deposits increased by 10.7% in 2010 over the previous year and the bank’s total assets grew 14.8% during the same period. With SLR91.7 billion, it has the highest market capitalisation among the banks listed on the Colombo Stock Exchange in 2010 and ranked number four among all listed companies.
The bank appears to have every intention of maintaining that growth and its leadership position by offering new services and focusing on its IT developments. It launched an overdraft facility during the period under review, and extended its own instant money transfer service to Saudi Arabia, which makes sense because Saudi has the largest number of Sri Lankan expatriates of any country in the world. And it was the first bank to start offering chip-integrated credit and shopping debit cards under the Visa and MasterCard brands.
BEST FOREIGN COMMERCIAL BANK
Citi
Citi had a safe if not spectacular year in Sri Lanka, where it remains the largest foreign bank based on any key financial metric with a triple-A local rating from Fitch.
During the past 12 months the bank's bread-and-butter business has ticked over, with the global transaction services business again accounting for around half of the bank's revenues in the country. Key mandate wins included wider cash and trade work for local companies such as Alpha Orient Lanka, Ultra Tech Cement and Brandix Asia. All are existing clients that gave new pieces of business in the trade finance area to the bank during the submission year — along with glowing testimonials for the bank for this award.
Citi also helped companies with FX and other flow businesses and its markets business now accounts for around 40% of revenues, as it looks to widen its mix of business in the country. As more Sri Lanka companies expand into other markets and international investment returns to the country, this line of business is only set to grow in importance. The balance of the bank's business during the time under review came from corporate banking and lending with the bank saying it has increased its loan business to key clients. The employer base remains at slightly more than 100 and during the submission period assets were up some SLR4.5 billion.
