In May, FinanceAsia named the winners of its annual Country Awards for Achievement. In June, we'll present the awards at our annual awards dinner in Hong Kong. Today, we present the rationale for our decisions to celebrate the best in banking in Singapore.
Best Bank, Best Investment Bank. Best DCM House, Best ECM House, Best Private Bank: DBS
After a difficult 2016, DBS delivered recording-breaking earnings in fiscal 2017, despite setting aside more money to help cover the rising non-performing assets resulting from its exposure to the embattled oil and gas sector.
Both total income and net profit reached record levels of S$11.9 billion (US$8.9 billion) and S$4.4 billion, respectively, at the group level.
Consumer banking was a bright spot as total income rose 9% to a record S$4.7 billion, thanks to the successful integration of ANZ’s retail banking and wealth management franchise. The bank now expects the ANZ business to contribute twice as much net profit over its initial estimates in 2018.
Last year, DBS’s market share in housing loans crossed 30% for the first time. Net interest income grew by 5%, underpinned by strong growth in customer deposits, mortgage loans and cards.
Total income for DBS’s wealth management business rose by 25% to S$2.1 billion while assets under management grew 24% to S$206 billion.
In investment banking, DBS was a joint financial advisor to the Chinese consortium on its US$17.9 billion privatisation of Global Logistics Properties, the biggest-ever corporate buyout in Singapore. It also advised CWT’s controlling shareholders over the S$1.4 billion sale to HNA Group, as well as the Warburg Pincus-led consortium in the S$1.8 billion buyout of ARA Asset Management.
And in a year of significant equity capital–market action, DBS was the lead left sponsor to NetLink NBN Trust’s US$1.7 billion initial public offering, the largest primary fundraising in the city in more than six years.
During the award period, DBS took on three other big-ticket underwriting roles, namely the IPOs for Cromwell European Reit, Keppel-KBS US Reit and Sasseur Reit. The trio raised a total of more than US$1.5 billion.
For debt capital markets, DBS expanded its market share in local currency bond issuance to 34% from 32.2% a year earlier.
During the review period, DBS lead-managed Housing & Development Board’s S$515 million 10-year and S$600 million 5-year notes, Singapore Airlines’ S$700 million 10-year notes and Mapletree Treasury Services’ S$700 million perpetual securities, among others.
Best Broker: DBS Vickers
Traditional brokerage and investment research services continue to face pressure under Mifid II, with buy-side money managers taking a more cautious approach in sourcing content from big research houses.
At the same time, the rise of independent houses is putting pressure on traditional sell-side brokerages, particularly when many of them are exploring new research areas that big brokers are unable to cover due to cost constraints.
DBS Vickers is not immune to the foreseeable changes and has been working to address them. In particular, the broker has entered into partnerships with content providers across the region to provide customised research for its clients.
Last year DBS Vickers joined forces with Emkay Global to provide research support in India, adding to its regional partnership that includes Alliance Financial Group in Malaysia, KTB Securities in Korea, and First Metro Securities in the Philippines.
Leveraging on DBS’s banking franchise, DBS Vickers provides equity research on 947 Asian stocks with its 98-strong analyst team across Singapore, Hong Kong, Shanghai, Kulal Lumpur, Bangkok, Jakarta, Seoul, Manila and Mumbai.
Best International Bank: Citi
Citi won FinanceAsia’s award for Best International Bank for the fifth straight year as the lender continues to demonstrate innovation and digital transformation, as well as delivering customer-friendly solutions for both corporate and retail clients.
Citi Singapore’s strength was underscored by its stellar 22% year-on-year increase in net income for the 2017 financial year. The bank switched back to expansion mode after a woeful 2016, when many commercial banks struggled with soaring NPLs from the oil and gas sector.
Citi Singapore reported improvements in nearly all its business lines. The bank’s commercial banking revenue rose 10% from a year earlier, while FX and cash revenue grew 12% and 23%, respectively. Private banking revenue in Asia increased by 23%.
Citi remained as the leading provider of markets and securities services in Singapore, with US$30 billion in equities and US$2.2 trillion in forex traded last year. It was the biggest custodian bank with assets growing 29% to US$291 billion as of the end of last year.
Citi also launched CCB Insight, a digital toolkit that analyses the financial data of over 32,000 listed companies to generate business insights, sensitivity analysis and tailored solutions for clients.
In investment banking, Citi’s highlight was its left-lead financial advisory role to the Chinese consortium behind the $17.9 billion take-private of Global Logistics Properties, the biggest ever corporate buyout in Singapore. Citi was also a joint lead underwriter of the debt financing package for the acquisition.
Best International Investment Bank: Credit Suisse
Credit Suisse was crowned FinanceAsia’s Best Foreign Investment Bank for the second time in three years as it once again showed its strong deal-making capabilities across all asset classes.
The Swiss bank’s balanced franchise helped it advise on 31 transactions during the award period, including six ECM and 11 DCM deals and 14 mergers and acquisitions, according to Dealogic. It is also the most profitable foreign investment bank with a leading market share of 10.7%.
Credit Suisse’s achievement is barely comparable to other investment banks, whose businesses tend to be more skewed towards one particular asset class.
Credit Suisse also played an important role in what was a landmark year for Singaporean tech startups, advising on two key initial public offerings – Sea and Razer – which raised nearly US$1.6 billion combined with their US listings. Credit Suisse advised both companies on their initial public offerings.
Credit Suisse was able to advise on both IPOs thanks to its long-standing relationships with both companies and its capacity to leverage on its global franchise to assist with the overseas listings.
In the M&A space, the highlight of 2017 was undoubtedly Chinese interest in Singaporean companies. Credit Suisse capitalised on the trend to advise two Singapore companies with their sale to Chinese buyers – namely CWT with its $980 million sale to HNA Group and Cogent with its $410 million sale to Cosco Shipping.
CWT’s sale was particularly difficult since the embattled Chinese buyer faced a severe liquidity shortfall shortly after the deal was announced. Credit Suisse advised on the Singaporean logistics company over the process and successfully closed the transaction eight months after it was announced.