Country Awards 2014 write-ups: Day 3

Why FinanceAsia editors chose the award-winners. Day 3 covers India, Indonesia and Thailand.


Kotak Investment Banking

Kotak Investment Banking bags our best investment bank award as its franchise has a good mix between equity capital markets and M&A advisory, due in part to its roots. Kotak started out as a strategic joint venture between Kotak Mahindra Bank & Goldman Sachs until 2006, when it became fully owned by the Kotak group.

Despite the exit of Goldman Sachs, Kotak has maintained a strong focus on investment banking and advisory. It was an adviser to the committee of independent directors of Glaxo Smithkline Pharmaceuticals, on the open offer by majority shareholder Glaxo Smithkline.

Kotak was also an exclusive financial adviser to the Mahindra group for its global alliance in Auto Components with Spain's CIE Automotive. It also landed advisory roles on smaller deals. These included advising Torrent Pharma on its acquisition of Elder Pharma's formulations business in India and Nepal and advising on a preferential allotment of a 2.6% stake by Kotak Mahindra Bank to GIC Singapore.

The past year has been a quiet one for Indian equity markets, as investors pulled out funds during the second half of 2013. Among the local banks, Kotak Investment Banking stood out for arranging major equity deals such as Power Grid Corp of India’s follow-on public offering and rights issues for Tata Power and Godrej Properties (for which it was a sole bookrunner).

According to Dealogic, rival bank SBI Capital was slightly ahead of Kotak in terms of league table rankings with a 10.2% market share compared to Kotak’s 9.1% share, but that was partly due to its role on parent State Bank of India’s sell-down.

Kotak has a reputation for being hungry and does not benefit from the large captive client base that SBI has due to its parent's large lending book. It also has strong distribution capabilities, an example of this being Power Grid's follow-on offering where Kotak procured 36% of the overall demand, which was more than any other bank.

Axis Bank

Axis Bank maintained its strength within the debt capital markets during the period under review, topping league tables with a 12.2% market share. The bank was an active arranger for Basel III compliant bonds at a time when there were few takers for such instruments. It helped a number of Indian banks including Canara Bank and Vijaya Bank to raise funds despite the hurdles faced.

The Indian rupee bonds business tends to be balance sheet heavy, and here Axis Bank  used its ability to underwrite bond deals to its advantage. Notably, when India went through a turbulent period last year, Axis Bank successfully shepherded a number of companies within troubled sectors to market.

An example of this was a Rs3 billion bond for vehicle maker Ashok Leyland. Given the stress auto makers were facing, to give investors additional comfort, Ashok Leyland’s bond was structured so that there was a coupon step-up for every notch rating downgrade and investors also had the right to call the bonds if the rating fell below A, a rare feature in Indian bond markets.

Another example of a borrower it brought to market during a difficult time is LIC Housing Finance, which closed its rupee bond in September last year, when the Reserve Bank of India had put measures in place to pare liquidity in the system. Axis Bank was also an active arranger of tax-free rupee bonds.


HDFC Bank bags the best bank award in India as it remains the most profitable and well-run private bank in India. This is reflected in the high valuations HDFC commands among Indian private banks. Rival ICICI Bank is the biggest private sector bank in terms of loan book but HDFC Bank has a larger market capitalization, reflecting investors’ belief in the bank’s growth prospects and fundamentals.

The bank remains the one to beat and has a reputation for smart banking. Despite steadily growing its profits by double-digits – 26% in the past financial year – HDFC Bank has among the best asset quality in the industry, in stark contrast to most Indian banks, which are battling with bad loans.

Its restructured loans are 0.2% of the bank’s gross advances as of March 31, 2014 – pointing to its pristine asset quality. Part of the reason for its low level of non-performing loans is that the bank is not over-exposed to a particular sector.

The bank’s loan book is balanced between retail and wholesale lending. HDFC Bank also has less exposure to the troubled infrastructure sector, which has enabled it to avoid the problems many of its peers face. The bank has a strong footprint in India and during the past year further expanded it by adding 341 branches, of which 230 were in unbanked locations. 

On the foreign exchange front, HDFC Bank is a strong player, due to its large corporate and retail client base. It offers a broad range of services, ranging from plain vanilla foreign exchange services for its retail client base to more complex hedging services for its large corporate clients.

Given its broad corporate client base, the bank is well placed to serve their trade finance needs. It also has an ability to mobilise funds among non-resident Indians. Last year, when the Reserve Bank of India announced a concessional dollar swap to attract foreign currency non-resident deposits to stabilise the rupee, HDFC Bank emerged as the top bank to mobilise funds. Many had expected the foreign banks to come up tops due to their large global networks but local bank HDFC roped in about $3.4 billion or roughly 10% of the overall flow, more than any other bank.

Kotak Securities

It was a sluggish year for Indian brokerages given the difficult market conditions during the second half. However, Kotak Securities proved to be a market leader, particularly in institutional broking.

The bank has a comprehensive platform that provides brokerage, research and distribution services to both institutional and retail clients. And while it is not as strong as its rival ICICI on the retail broking front, Kotak Securities does have a retail distribution network in India with 1,157 offices across 367 cities and towns.

Its equity broking service has more than  900,000 retail and non-institutional investors, of which roughly half are registered to its online equity broking platform. It is one of the largest players in secondary market online trading, with an average of 70,900 trades each day. Kotak Securities is also reputed for its research and has 165 stocks under coverage across 15 sectors with 26 research analysts.


Amid a shrinking wallet share out of India, a number of foreign banks have scaled back their presence. However, one house has stood out for its strength in its investment banking franchise and that is Citi.

The bank dominated the ECM league tables with a 13.4% market share. It was an arranger for India’s largest equity-raisings during the period under review. This included State Bank of India’s $1.3 billion share placement, which is the largest qualified institutional placement in India. It also broke new ground by shepherding companies in new sectors to market such as Just Dial, which raised $170 million in the biggest internet IPO out of India. The bank has also brought a number of inaugural India borrowers to the US dollar bond market – including Tata Motors and Oil India.

The firm also has a dominant M&A franchise, landing advisory roles on major transactions during the period. This includes co-advising Sun Pharmaceutical on its acquisition of Ranbaxy. While that deal has yet to close, Citi's M&A credentials are also reflected in its other advisory mandates.

It was a sole advisor to the committee of independent directors of Hindustan Unilever for Unilever’s $3.5 billion tender offer and sole advisor to Sesa Goa on the Vedanta group reorganization. In addition, it also advised United Spirits on the takeover offer by Diageo.

Citi may not be the largest foreign commercial bank in Thailand but it punches above its weight. Despite challenging market conditions during the second half, it continued to increase profits.

One of its key strengths is its credit card business, where Citi remains a leader with a 17% share of industry spend and the highest spend per card, more than twice the industry average. It has the highest revenue per branch among the foreign banks and a robust balance sheet supported by a healthy capital adequacy ratio of 15.9 and tier-1 ratio of 14.8%.

It has also been successful in capturing non-resident Indian flows, amounting to $1 billion in 2013, and has $7 billion of assets under management. In terms of transaction services, Citi is helped by its strong global network. The bank has also innovated in the digital space, bringing mobile payments to the market and has a strong brand within India.



Bank Mandiri

Pipped at the post by Bank Central Asia in 2013, Bank Mandiri wins the award this year for doing what it is good at: providing huge breadth and depth of services on a large scale.

BCA pushed it close once again after another good year squeezing performance out of low costs but for us the sheer size and scale of Bank Mandiri gets the nod.

In an archipelago of more than 15,000 islands and 240 million people this scope is important. As such, the fact it has more branches than any of its peers is key. And this is increasing. The bank lifted the number of branches from 1,811 in the first quarter of 2013 to 2,061 in the first quarter this year, a 13.8% rise. The number of automated teller machines is also extensive; the third largest in the country.

This formula has allowed it to reach some financial milestones during the year. Net profit grew 17.4% in the period as total assets rose nearly 14% from the year-ago period to Rp730 trillion, comfortably beating its rivals.

Its commitment to small- and medium-sized businesses during the period contributed to Bank Mandiri’s higher profits.  Total deposits also topped its domestic peers, at Rp532 trillion, while return-on-equity hit 22.23%. Meanwhile, its net non-performing loan ratio is low at 0.4%.

Bank Mandiri offers extensive foreign exchange products across three categories – cash transactions, hedging products and investment products.

The bank notifies its customers of the latest market updates through e-mail alerts, text messages and a daily newspaper.

It has 11 dealing rooms and 29 sub-regional treasury marketing offices in 21 cities, utilizing its large presence across the country. The bank also has its e-fx web-based application service up and running in 100 branches, which allows branches and customers to perform foreign exchange transactions in real time.

Mandiri Sekuritas

The bank retained two of the awards it won last year after continuing its strong showing across all segments, while also expanding overseas and dominating debt capital markets.

For the range of services Mandiri Sekuritas offers its clients, as well as its consistently strong showing in the Dealogic league table rankings, it gets our vote as Best Investment Bank.

Mandiri Sekuritas is the best-capitalised investment bank in the country, boosting its capacity to work on capital market transactions.

The bank worked on 12 successful equity underwriting projects worth Rp19.5 trillion during the period. These included arranging the privatisation of leading cement company Semen Baturaja, worth Rp1.3 trillion, and jointly underwriting the Rp1.2 trillion initial public offering of Wika Beton, which was more than 17 times oversubscribed.

Mandiri Sekuritas was first in Dealogic’s debt underwriting table for the awards period, with a 21.4% market share. It was also was number one in secondary market trading by transaction volume, with a 15.58% market share.

During the period, the bank was the sole underwriter on Jasa Marga’s Rp8.787 trillion bond in September 2013 and also on Summarecon Agung’s Rp600 billion bond in December 2013.

During the period the bank also opened its first overseas branch, in Singapore, underlining management’s ambitions.

Bahana Securities

Bahana Securities topped Dealogic’s equity capital markets bookrunner table in terms of domestic banks and narrowly missed out on top spot overall. And according to Bloomberg’s equity and rights offering rankings, Bahana was top with a 23% market share.

This was due to a string of successful deals across a wide range of industries including infrastructure, banking and aviation.

The bank was sole leader underwriter on Sri Rejeki Isman’s Rp1.34 trillion IPO in June 2013.

Bahana was also joint global coordinator and bookrunner on Telekomunikasi Indonesia’s Rp2.4 trillion share placement in July 2013, the largest placement of treasury shares in Indonesia.

The bank was joint lead underwriter on Wijaya Karya Beton’s Rp1.2 trillion IPO this April, which was 5.3 times oversubscribed, and joint arranger of Laguna Cipta Griya’s Rp1.47 trillion rights issue. It was also sole standby buyer on this transaction.

Meanwhile, the bank’s equity research team continues to be one of the largest in the country, covering more than 76% of Indonesia’s total stock market capitalization or 87 listed companies.

Bahana has worldwide investor coverage, spanning the US, UK and Asia; and boasts a partnership with Daiwa that offers access to potential investors in Japan.

Credit Suisse

Credit Suisse continues to be the dominant foreign investment bank in Indonesia, benefiting from the fruits of its long association with the country.

The Swiss bank remained loyal to the country during the Asian financial crisis and again throughout the global financial crisis of 2008 but it is the bank’s performance that continues to set it apart.

The bank should be looking over its shoulder now because of Goldman Sachs’ very strong showing in mergers and acquisitions. But otherwise Credit Suisse has mopped up, dominating the Dealogic league table for investment banking earnings during the period in question.

Credit Suisse generated net revenue of US$23 million from investment banking, comfortably beating its rivals, and it was number one in equity capital markets, bookrunning four deals with a total value of US$303 million.

It is the largest equity-trading house by trading value on the Indonesian stock exchange, with $19.6 billion traded in 2013; the fourth consecutive year it has beaten its rivals.

Credit Suisse has also been very active in debt markets, particularly private loans.

According to Dealogic the bank came sixth in the Indonesian M&A league table, with less than half the deal value of Goldman Sachs but with one more deal. But overall Credit Suisse continues to be the investment bank to beat.


Citi Indonesia continues to impress in a difficult marketplace, increasing assets in the country by 4% year-on-year to Rp64.3 trillion.

HSBC has more but it is Citi’s return on these assets that helps the US bank win our nod this time around. Citi’s ROA is 4.26% for the period in question, while return-on-equity is a healthy 16.72%. This all translates into a net profit of about $165 million, higher than HSBC, Deutsche Bank and JP Morgan.

Citi also boasts a capital adequacy ratio of 24.48%, far above the central bank’s minimum requirement of 8%.

During the period, Citi signed an agreement with local group Mandiri Investasi to distribute wealth management products to high net worth individuals, further strengthening its presence in this area.

Citi remains the only onshore bank with a fully integrated global markets platform, offering solutions across rates, currencies, commodities, credit, equities, hybrid and capital markets origination and distribution.

It remains the only foreign ban mandated by the Republic of Indonesia as a selling agent for all the government’s retail bonds, both conventional and Islamic.

Also, its credit card business has the highest monthly average spend and receivables per customer, above the market average.



Siam Commercial Bank

Siam Commercial Bank remains our top choice as the best bank in Thailand but rival Kasikornbank is closing on the competition. Siam Commercial Bank continues to lead Thai banks in terms of profitability, branch and ATM network and market capitalisation, a reflection of investor confidence in the bank.

Despite being one of the country's biggest lenders, Siam Commercial Bank's non-performing loans fell to 2.11% of total loans during the first quarter of 2014. Impressively, its asset quality has held up despite overall weakness in the Thai economy, with growth halving to 2.9% in 2013. In terms of other metrics, it also has the lowest cost to income ratio and is well capitalised with a capital adequacy ratio of 15.7% during the first quarter.

On the investment banking side, Siam Commercial Bank has come from nowhere to build its franchise, leveraging off its balance sheet. It is now a player to be reckoned with. It has taken a leaf from other commercial banks such as HSBC and Standard Chartered and its efforts to cross-sell advisory and equity market capabilities with its lending has paid off.

Siam Commercial Bank bags the award this year for a balanced franchise: it is strong in both equity capital markets and M&A advisory. On the equity capital markets front, it leveraged off its retail distribution network, as reflected in True Telecommunications Growth Infrastructure Fund $1.8 billion IPO, for which Siam Commercial Bank was a joint global coordinator.

The deal came to market in difficult times and only crossed the line due to strong participation among domestic retail investors, which Siam Commercial Bank played a major role in bringing in. On the M&A advisory front, Siam Commercial Bank was an advisor to CP All, and did much of the heavy lifting in advising CP All on its acquisition of Siam Makro. It also arranged the bridge loan and the subsequent bond take-out.

For the foreign exchange side, the bank has a broad corporate client base, particularly among top-tier Thai clients. This has put it in a strong position to capture foreign exchange flows from trade finance and hedge the needs of its corporate clients. The bank is also well positioned to provide vanilla foreign exchange services for its retail clients thanks to its branch strength.

Bualuang Securities

It was a year of two halves for Thailand’s equity capital markets with some activity in the second half of 2013 but little in the first half of 2014 as the country was in a state of political flux.

During the period under review, two domestic banks dominated league tables – Siam Commercial Bank and Bualuang Securities. The latter was placed second, with 14.8% market share while the former topped league tables with a 19.2% market share, according to Dealogic.

However, Siam Commercial Bank’s pole position was due mainly to its role on the True Telecommunications Growth Fund IPO – a difficult deal that came at the very end of the year when most fund managers had packed their bags for holidays, which resulted in it struggling to cross the line.

We feel Bualuang Securities deserves the award as it brought a number of reasonable sized, well-executed deals to market. This included a Bt3.3 billion IPO for auto part maker PCS Machine, the first IPO excluding fund listings to price after a hiatus of a few months.

Bualuang was sole financial advisor and a joint bookrunner with Siam Commercial Bank on the deal. Bualuang arranged a total of six IPOs during the review period and other notable deals included public offerings for MK Restaurant, the largest restaurant chain in Thailand, and Thaire Life Assuance. It was also a bookrunner for placements for MC Group and VGI Global Media.

Bangkok Bank

Baht bonds are a balance sheet heavy business and the domestic banks are usually involved in all the large-sized deals. During the period under review, Bangkok Bank captured a bigger chunk of the onshore bond business and dominated the league tables with a 20.3% market share, nearly double that of the second placed bank - Siam Commercial Bank with a 12.8% share, according to Dealogic.

Bangkok Bank was an arranger for Laos Ministry of Finance's Bt3 billion bonds. For an unrated and unsecured bond from a foreign issuer, the deal was the largest and also achieved the longest tenor.

Bangkok Bank was an arranger for regular baht bond market visitors such as PTT and Thai Oil as well as debut borrowers. For example, it arranged CP All's inaugural Bt50 billion bond issue – the largest ever corporate baht bond in Thailand – as well as the retailer’s subsequent baht bond issue in March this year.

As Thai telcos turned to debt markets, Bangkok Bank was active in their fund-raising. It was sole bookrunner for DTAC's Bt5 billion bond issue -- its first return to the baht bond markets since 2009 – and a bookrunner for baht bonds for True and Advanced Wireless Network, a non-listed company, which was tapping the market in a debut issuance.

Bangkok Bank was also active in placing bonds to retail investors, thanks to its strong nationwide retail branch strength.

Maybank Kim Eng

The past year was a difficult one for brokers in Thailand and trading volumes ebbed due to the political volatility. Amid such difficult market conditions, brokers saw their commissions falling and Maybank Kim Eng was no exception. However, we still feel Maybank Kim Eng deserves to win the best broker award due to its strong 9.1% overall market share year-to-date.

The broker has a strong presence among retail investors and has an 819-strong sales force selling a range of products. The brokerage is also known for its comprehensive local and regional research coverage. Maybank Kim Eng has also played an educational role, and actively engages retail investors by holding roadshows to introduce new products.

To facilitate on-the-go trade, Maybank Kim Eng also delivers on various platforms, including mobile and online devices. Through its securities arm, it is able to offer investors access to placements and IPOs.

Standard Chartered

Foreign banks have thrown in the towel in Thailand, a country dominated by the major local banks; and the winner for best foreign commercial bank in Thailand has typically been a toss-up between Standard Chartered and Citi.

Standard Chartered wins for a second consecutive year due to its strong presence on the ground and its branch network – which includes 24 in greater Bangkok and three in other major provinces. It has a unique position in Thailand as it has been granted an equivalent of a local bank license even though the bank is almost 100% fully owned.

As opportunities in Myanmar, Cambodia and Laos develop, the bank has realigned its operations so that the greater Mekong sub-region umbrella is led by its Thai operations. The bank is well-capitalised with a capital adequacy ratio of 19.6%. During the period under review, it has launched a number of new products including a suite of retail financial products targeting non-married couples, giving an underserved segment access to mortgages, investment services, bancassurance and credit cards.

It also launched a Liverpool Football Club credit and gift card, which enabled the bank to acquire 26% of new bank customers. The bank has also played a role in developing the Bibor benchmark, by issuing floating-rate loans linked to Bibor.

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