In May, FinanceAsia named the winners of its annual Country Awards for Achievement. On June 27 we presented 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 Taiwan.
Best Bank: CTBC Bank
For the fifth consecutive year CTBC Bank is a winner in this category as the lender’s operational figures continue to improve despite multiple headwinds in the banking industry.
It remains Taiwan’s biggest bank by revenue after posting a 7% improvement in top-line growth last year and a 27% rise to NT$36.6 billion ($1.2 billion) in its consolidated pre-tax income.
In terms of its financial strength, CTBC grew its common equity tier 1 ratio to 11.8% as of the end of last year from 10.7% at the end of 2016. Its overall capital adequacy ratio also improved slightly to 14.5% from 14% a year earlier.
One of CTBC’s major achievements last year was its inclusion in the Dow Jones Sustainability Indices World Index, which recognised the bank’s high social and ecological standards and commitment to good corporate governance and labour relations.
Over the years CTBC has spent over NT$500 million on green investment and saved 1.1 million kilowatt-hours of electricity. More than NT$660 million has been spent in community programmes.
Last year also saw CTBC complete its partial acquisition of Thailand’s LH Financial, marking the start of its expansion in Southeast Asia.
Best Investment Bank, Best ECM House: Fubon Financial
Fubon Financial capitalised on the continued rally of Taiwanese stocks and demonstrated excellent equity underwriting capabilities for its clients, making it the standout candidate in investment banking and equity capital markets.
During the award period, the group’s highlight was underwriting a NT$10 billion ($335 million) convertible bond issue for Highwealth Construction. It was the biggest-ever convertible bond by a Taiwanese issuer without an international underwriter in nearly two decades, underscoring Fubon’s domestic distribution capabilities.
The financial group’s stellar performance was endorsed by public investors as its share price traded up about 13% during the review period and reached its highest level in more than two years.
In debt capital markets, Fubon was ranked third in bond underwriting among Taiwanese banks with a 6.6% market share from $3.3 billion of deals.
Best DCM House: KGI Securities
KGI Securities’ fixed income business demonstrated excellence in executing jumbo bond deals and green bonds during the award period, justifying its selection this year for debt capital markets in Taiwan.
In terms of bond underwriting, KGI topped all local securities houses and international banks with $5.5 billion-worth of deals and achieved a near-11% market share. In particular, KGI led five jumbo bond issues of over NT$10 billion, including two triple-tranche bonds for Taiwan Power totalling NT$29 billion in July and December. In September it also led a NT$14 billion bond for CPC, the government-owned petroleum company.
Away from the domestic market, KGI participated in international bond deals too. As the only Taiwanese securities house to underwrite Eurodollar bond deals, KGI acted as joint lead manager and bookrunner for China Construction Bank (Hong Kong)’s $1.7 billion bond issue in December.
In terms of US-dollar denominated bond issuance, KGI assisted the likes of Goldman Sachs, Barclays, Bank of America, Natixis, UBS, Maybank and United Overseas Bank last year.
At the same time, KGI remains one of the most proactive bond sponsors for environmentally progressive businesses in Taiwan by underwriting three green bonds during the award period, including a NT$3 billion senior note for Far Eastern New Century.
It is worth noting also that KGI remained one of the biggest convertible bond asset swap providers last year. According to the Taipei Exchange, KGI’s outstanding CB asset swap was NT$25.4 billion as of the end of March, putting it second among all financial institutions.
Best Private Bank: CTBC Private Bank
CTBC Private Bank has been working on a dedicated programme to meet the growing private banking and wealth management needs of an aging society. By 2020, the proportion of the population over 65 years old is projected to reach 28%.
Instead of targeting individuals, CTBC Private Bank has set its sight on families and accumulated more than 3,000 new clients through its family membership programme, which includes forums and talks for younger generations to help them understand the importance of investment and financial independency. More than NT$8.2 billion has been added since the programme started.
In April last year, CTBC initiated a new team of relationship managers to serve ultra-high net wealth customers, differentiating them from other private banking clients and offering customised and comprehensive financial advisory services to them.
Best Broker: Yuanta Securities
Yuanta Securities remains the go-to brokerage particularly for Taiwanese retail clients as it enters into its 15 years of business.
Last year, it remained as Taiwan’s biggest brokerage by the number of retail accounts. With over 750,000 active clients, Yuanta is naturally the largest provider of brokerage, online trading and stock lending services to retail investors in Taiwan.
Yuanta ranked first in margin financing and stock lending among all local securities houses last year with market share of 15.5% and 22.5% respectively. It also took up 13.6% of Taiwan’s online trading business and 18.6% of the warrant business, underscoring its capability as a full-fledged brokerage.
Apart from retail customers, Yuanta also serves over 350 corporate clients, providing IPO and secondary offering services, equity research, corporate advisory as well as stock registry services.
With a broad investor network comprising Chinese and international institutional investors, Yuanta is able to provide international investment banking services such as stock offering and block trade services.
By leveraging on its strong retail platform, Yuanta completed two block trades for Macauto and Nanya Tech, as well as three stock sales for Fusheng, LCY Tech and GIGA Diamong last year.
Best International Bank, Best International Investment Bank: Citi
Citi retained its crown as the most profitable international bank in Taiwan last year thanks to its extensive retail network and top-notch investment banking capabilities.
Extending 2016’s stellar performance, Citi Taiwan achieved yet another outstanding year with 34.7% bottom-line and 12.5% top-line growth. The bank’s capital adequacy ratio improved significantly to 16.5% from 14.45% in 2016, while its return on equity also improved to 12.5% from 10.8% on a pre-tax basis.
As in some other Asian markets, Citi is a main custodian service provider in Taiwan serving major global institutions and dealers. As of the end of last year, total assets under custody amounting to $311 billion, representing a 28.5% increase from a year earlier.
On the investment banking front, Citi Taiwan also improved from last year both in terms of deal counts and capital raised. In particular, Citi assisted its clients in raising a total of $5.1 billion from both international and domestic capital markets, a sharp increase from $1.1 billion a year earlier.
Citi’s advisory role in the sale of McDonald’s Taiwan business was arguably the most important investment banking transaction during the award period. By advising on the buying consortium led by Citic Group, Citi played an important role in the transformation of the world’s most popular fast-food brand in the region.
Citi also played a key role in financing one of Taiwan’s most high-profile mergers of all-time when it completed a $3.5 billion syndicated loan for the combination of Advanced Semiconductor Engineering and Siliconware Precision Industries. And it advised Ruentex on its $2.8 billion partial disposal of Sun Art Retail, a Chinese hypermarket operator, to high-flying tech giant Alibaba.