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Awards for Excellence 2012 Regional Awards for Excellence 2012: Asia All regions and countries |
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Asian winners by country Australia China Hong Kong India Indonesia Japan Korea Malaysia Mongolia Pakistan Philippines Singapore Sri Lanka Taiwan Thailand Vietnam |
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Best Bank: Commonwealth Bank of Australia |
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One only has to look at the price/earnings multiples of Australia’s big-four banks to see which the market thinks is best; Commonwealth Bank of Australia trades well above its three peers. “From a valuation perspective, it looks a bit expensive, with the lowest yield,” says a leading fund manager. “But that’s because it’s the best quality of the four.” CBA won last year partly for its revamp of its core retail franchise, and in that area of the business it continues to stand out, imposing good cost control, leadership in technology, and a nicely pitched balance between keeping margins and retaining market share. It’s not, though, a leader in institutional banking – that mantle would still go to Westpac. In April, chief executive Ian Narev announced a new strategic direction for the bank, and correcting that institutional lag will clearly be a part of it, with an emphasis on technology advantages, more specialized industry coverage and further investment. It seems international expansion, particularly in Asia, will be another ambition, following the path of ANZ. JPMorgan continues to be the bank of choice for Australian issuers venturing overseas. It is by far the leading name for Australian corporate issuers: there were 18 such deals of note during our review period and JPMorgan was a lead on 14 of them, from blue-chip staples such as BHP ($5.25 billion and $3 billion) and Telstra (€1 billion and $1 billion) to less well-trodden names, such as Fortescue Metals’ $2 billion high-yield bond and a smaller but no less challenging $395 million high-yield print for Mirabela Nickel. Big names trust JPMorgan: it has run eight of the last 10 Telstra issues in euros, and the last six Fortescue debt market deals in a row. And while corporates are its strongest area, it is powerful in financial institutions – helping to launch the covered bond market for Australian banks, for example, representing three of the four big local banks in their debut issues – and in structured and hybrid transactions. JPMorgan has capability locally, particularly for supranationals coming into Australian dollars, but tends not to go head to head with the locals that are also its clients. Sometimes, though, it can bring local innovation too, such as with Woolworths’ A$700 million ($712 million) retail hybrid this year. Add a leading securitization business to the mix and you have a clear leader. As always, UBS not only sweeps the board in deal volume in equity capital markets but also backs it up with a leading position in secondary market brokerage. It was not a year of landmark deals, but UBS was on the ones that counted – often as a sole lead, including on big block trades for Transurban, an accelerated renounceable entitlement offer for Leighton and a rare IPO, for Trade Me. Also, characteristically, it brought what innovation was appropriate to the market, handling a series of hybrids such as Westpac’s A$1.9 billion tier 1 raising, and other hybrids for Tabcorp and IAG. UBS has led the ECM tables for six years in a row and there’s little sense of this changing soon. M&A in Australia has traditionally been the preserve of UBS and Macquarie, but this year Goldman Sachs made a compelling case. On Dealogic’s numbers, Goldman led during our review period both on number of deals and volume, but what really set it apart was that it was on all the deals that mattered. On the buy side, Goldman advised BHP Billiton on the $15.1 billion acquisition of Petrohawk Energy, the largest M&A in Australia in 2011; and NBN on its $7.8 billion purchase of Telstra’s wholesale assets. On the sell side, it could be found in Foster’s Group’s corner as it was acquired by SABMiller for $13.1 billion. It also advised Barrick Gold on its acquisition by Equinox Minerals. Other deals included Whitehaven Coal’s merger with Aston Resources and its acquisition of Boardwalk Resources, and in media, the KKR/Seven Media/West Australian Newspapers deal. So the breadth of advice and sector, more than just the numbers, was impressive, and for that Goldman wins this year’s title. |
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China |
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Industrial Commercial Bank of China takes the title of best bank in China from Bank of China, last year’s winner, as net profits grew by more than a quarter year on year and total assets rose 15%. The Chinese banking sector is highly concentrated, with the big-four state-owned banks – ICBC, China Construction Bank, Agricultural Bank of China and Bank of China – controlling approximately 50% of all deposits. And the sector remains hugely profitable: ICBC posted profit growth of 32% last year, in spite of the slowdown in the Chinese economy and choppy market conditions. ICBC’s profit and asset growth outstrip that of main rival Bank of China, whose total assets and profits both rose by 9%. ICBC says it has focused its capital spending on upgrading nearly 1,000 outlets and improving its electronic banking services such as internet banking and mobile and SMS banking. More than two-thirds of the bank’s services are now delivered electronically. Reflecting China’s growing influence on the global stage, ICBC has also expanded its international presence by incorporating new institutions in 11 countries and regions. The bank now has 239 overseas institutions across 33 countries and regions. ICBC is the world’s largest bank by market capitalization and has a customer base of some 282 million. The other state-owned banks in China are also prospering although ICBC, this year, earns the accolade as the nation’s best. Citic Securities has been the coming story in Chinese investment banking for what seems like an age and this year it announces its arrival in the big league by winning the award for best investment bank in China. Last year, the firm raised Rmb71 billion ($11.2 billion) for clients. According to the Securities Association of China, Citic was ranked number one among securities companies in China for equity fundraising. Citic’s strength is best demonstrated by the $1.6 billion Hong Kong IPO of Hui Xian – the world’s first renminbi-denominated real estate investment trust and Hong Kong’s first renminbi-denominated IPO. Citic’s own $1.7 billion Hong Kong IPO in October last year was the only sizeable deal to be done in Hong Kong in two months at the time it came to market. Against a backdrop of tough market conditions, Citic managed to bring some big names to the transaction. Six cornerstone investors agreed to take up a combined $850 million (50%) of the offering. The Shenzen-headquartered company was established in 1995 and its ascent to the top of the investment banking business in China in such a short time is striking. In M&A JPMorgan continues to be singled out in conversations with corporates and competitors alike for its capabilities in China. In a crowded field, the bank stands out. Excluding Bank of America Merrill Lynch’s sell-down of its own stake in CCB, JPMorgan tops the table for China M&A in terms of announced and completed transactions during the awards period. It advised on 14 deals with a combined value of almost $14 billion. Among the most prominent deals, it advised on Galp Energia’s sale of Petrogal Brasil – a $4.8 billion deal that was the largest outbound M&A by a Chinese company. It also advised on the largest privatization of a US-listed Chinese company, the $2.3 billion deal for Shanda Interactive Entertainment. The strength of its equity franchise means UBS wins this year’s award for the best equity house in China. It was ranked number one for equity issuance in China, arranging deals worth $2 billion more than its nearest competitor. The contribution of the Chinese equity business to overall investment banking revenues was one of the key reasons that UBS wins the regional investment banking award this year and recognizing its achievements in ECM for China is natural. ECM is a traditionally strong business for UBS in the region and the bank was recognized as the best ECM house in Asia in 2002, 2004 and 2007. But this year’s progress in China marks a post-crisis high, albeit in an ECM environment that remains difficult for raising capital. Bank of China led the way in the Chinese debt capital markets with a market share of more than 10% and a combined deal value of $32.9 billion through 101 deals. Citic Securities takes second place with an 8.5% market share in a top 10 this year comprising exclusively Chinese banks. UBS is the top-ranked overseas bank for the awards period in 11th place in the rankings and Goldman Sachs is the only other overseas bank in the top 20 for DCM in China according to Dealogic. Some would argue that UBS should take the award because it can provide some services that its Chinese competitors cannot, including placing deals to its private banking network. But such overwhelming market share, regardless of its current limitations, deserves to be recognized and bodes well for the future of the DCM business for Bank of China and the Chinese banking sector in general. |
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Hong Kong
Best Bank: HSBC |
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HSBC beats Standard Chartered for the top spot for banking in Hong Kong as its scale, powerful retail banking, wealth management and debt capabilities give it an edge in spite of Standard Chartered’s stellar profit growth. Pre-tax profits at HSBC rose 2.4% despite tough market conditions, particularly in equity capital markets. The bank provides retail banking and wealth management services for 4.4 million retail customers in Hong Kong. Standard Chartered can argue almost as compelling a case for the top award in Hong Kong and indeed its growth rate is far higher than HSBC’s, albeit from a lower level. But it is hard to argue with the franchise and money-making machine that HSBC is on its home turf in Hong Kong. In commercial banking, HSBC attained record high net foreign investment on the back of robust international referrals. It was, once again, the top bookrunner in the Hong Kong G3 market, with a market share of almost a quarter. It is also the number one bookrunner on Hong Kong rights issues and convertible bond issuance, an increasingly important aspect of the Hong Kong business. Morgan Stanley’s position as best equity house in Asia is mirrored in Hong Kong, the most important centre for IPOs in the region. The bank is frequently listed as a lead bookrunner or joint global coordinator on the largest deals. When asked about the best banks in equities, competitors grudgingly admit that Morgan Stanley’s execution is generally second to none. Sun Art Retail Group’s $1.2 billion IPO on the Hong Kong Stock Exchange, for example, achieved the highest valuation for a Hong Kong IPO since 2008, was one of only two Hong Kong IPOs to price at the top end of the price range and achieved the strongest after-market performance for any Hong Kong IPO during the awards period. The dominance of Goldman Sachs in the overall M&A tables also translates to a commanding position in Asia’s financial centre. It took a lead role advising Ping An on its sale to Chow Tai Fook, demonstrating its place at the heart of Hong Kong investment banking. In order to hold on to its title next year Goldman will have to hope that its recent rehiring of veteran banker Mark Schwartz in Beijing does not shift its focus too much to the north at the expense of its Hong Kong franchise. Schwartz will become chairman of Goldman’s Asia Pacific unit, and Goldman will be the first global investment bank to place its regional chairman in the Chinese capital. HSBC’s strength in Hong Kong is clear to see in its dominance of debt capital markets. It continues to offer Hong Kong and Chinese issuers access to the international G3 bond market in spite of difficult market conditions. The bank led 47 out of 77 Hong Kong/China G3 transactions, with a market share of just under a quarter, more than twice that of Standard Chartered, its nearest competitor. Landmark deals this year included a $750 million 10-year deal for China Resources Gas and a $700 million five-year deal for Agile Holdings. Beyond Standard Chartered, HSBC’s main competition in the debt capital markets of Hong Kong comes from JPMorgan and Goldman Sachs. |
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India Best Bank: HDFC Bank Best Debt House: I-Sec Bank Best Equity House: Citi Best M&A house: JPMorgan |
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The best bank in India award, as usual, comes down to a contest between HDFC and ICICI, the country’s largest lenders. HDFC just pips ICICI on profit and revenue growth but there is little to choose between the two more generally. HDFC’s net profits rose 31.6% over the course of the year, with ICICI’s growing 30%. A closer examination of HDFC’s numbers reveals a compelling story as it seeks to cement its position in India and expand its reach. Its total balance sheet size rose by almost 22% to Rs3.379 trillion ($60.5 billion) last year. Total deposits in current and savings accounts also soared. HDFC was incorporated in 1994 and has a network of 2,544 branches and 8,913 ATMs in 1,399 Indian towns and cities. The bank is leading efforts to provide services to the millions of Indians who remain unbanked. Last year, the bank launched an initiative with Vodafone to promote greater financial inclusion through mobile banking. At the other end of the spectrum, it introduced a range of three credit cards targeted at the ‘global Indian’ – designed to make air travel for the ultra-rich in the subcontinent more efficient. Further illustrating HDFC’s growing involvement in almost every sector of Indian society, the bank last year signed a memorandum of understanding with the Indian Army to offer salary accounts and a range of banking products and services. Equity capital markets in India is effectively a two-bank business. Citi and Bank of America Merrill Lynch are almost inseparable at the top of the league table for ECM in India and the rest are nowhere to be seen. In the end Citi’s work on twice as many deals as BAML gives it a 21.9% market share and top spot by a whisker from BAML, which has a 21.8% market share. In a distant third place is Morgan Stanley, with a 4.5% market share, closely followed by Goldman Sachs, with a 4.4% share. Citi’s position owes much to its sale for $1.9 billion of a 9.9% stake in mortgage lender Housing Development Finance Corporation. Nevertheless, its work on eight deals outstripped the competition in a sluggish market for equity capital raising across the subcontinent. JPMorgan’s strength of M&A franchise in China is repeated in India. Once again, it was singled out by several observers and participants as a growing force behind Morgan Stanley and Citi – more established players in the Indian market. JPMorgan advised on fewer deals than either Citi or Morgan Stanley but still achieved a market share of close to a quarter, suggesting a more selective approach to deals than its closest rivals. Its execution in India was widely praised and was the primary reason for its award as best M&A house for India this year. In debt capital markets ICICI Securities Primary Dealership dominates, accounting for almost a fifth of the market over the period of the awards, with a combined deal value of $8.8 billion through 110 deals. Axis Bank is its nearest competitor, but has just 10% of the market, underlining the strength of ICICI’s position. |
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Indonesia Best Bank: Bank Mandiri Best Investment Bank: Citi |
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Bank Mandiri, like so many Indonesian institutions, is the result of a rebirth. Forged in 1998 out of the wreckage of four state-owned banks, it spent most of its first decade of existence just figuring out what it wanted to be and becoming viable. By 2005 it had resolved to become a regional champion bank, starting with a period of restructuring, then with expansion, and finally – from 2010 – with what it called “shaping the endgame”. We are finally in a position to see what that endgame looks like, and it is very promising. Last year’s Rp12.2 trillion ($1.3 billion) net profit amounted to a 20-fold increase in six years. Return on equity stood at 21.9% in 2011, compared with 2.5% in 2005. Fee-based income has increased almost five times over. It has critical mass, too: 1,548 branches across Indonesia, one of the most comprehensive sets of electronic channels in the country, and a range of well-entrenched subsidiaries from Islamic banking to capital markets, consumer finance, life and general insurance, and micro lending. One could dismiss these numbers as the function of a very low base, but what impresses about Mandiri today is that having generated decent numbers, it has a clear sense of what it wants to do with them. The next stage will be a focus on wholesale transactions, retail payments and high-yield loans. It is notable how many cash management mandates and awards the bank is winning these days, while its foothold in Islamic finance – with arguably the best such business in the country – is going to serve it well in future. Best of all: it looks sustainable, with proper risk management systems and consistently falling NPLs. Such is Citi’s entrenchment in Indonesia that it was a serious candidate for the overall best bank in the country. It doesn’t lift that prize, but it is the best investment bank. It does so chiefly this year on the back of a market-leading presence in debt capital markets, in particular origination for Indonesian issuers into G3 currencies. These were the country’s most important transactions in 2011, and Citi was on them all: the $1.5 billion global bond debut from Pertamina (and the $2.5 billion issue that followed it this year), the $1 billion global sukuk from the Republic, and the $1 billion issue from PLN. It’s also among the leaders in ECM – handling the landmark IPOs and rights issues of the review period, for Garuda and Mandiri respectively – and in M&A, where it handled the acquisition financing for Elang Mahkota in the rupiah market. Behind the league tables are powerful sales and research teams on both the debt and equity side, and an increasingly strong brokerage capability. Citi’s Indonesia investment banking team already has three managing directors among its on-the-ground presence, and more resources are expected. |
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Best Bank: Bank of Tokyo Mitsubishi UFJ |
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Bank of Tokyo Mitsubishi UFJ is given the best bank in Japan award primarily on the basis of scale – it remains the country’s largest bank and enjoys the many advantages this size confers. Japanese banks have been taking advantage of their relatively strong capital positions to expand into new markets. They also have relatively low exposure to the European markets and have therefore fared better than many in recent months. The bank’s strength in its home market is well established, but sources close to it said it has been positioning itself to play a greater role on the global stage. It recently established a virtual holding company in the US with a new governance structure led by a single US chief executive. The group says the move is designed to strengthen its position in the increasingly important US market. The US is likely to be a key part of the expansion plans for many Japanese banks over the coming years, and Bank of Tokyo Mitsubishi looks set to play an important role in this. Morgan Stanley advised on several industry-defining transactions, completing 47 deals involving Japanese companies with a total publicly disclosed transaction value of $24 billion. These included large-scale domestic transactions including Toyota and Kanto Auto Works. The structure under which Morgan Stanley operates in Japan is complex. Morgan Stanley formed a two-company-structure joint venture with MUFG in May 2010. Morgan Stanley has been conducting its investment banking/securities operations in Japan as the joint venture structure, which comprises Mitsubishi UFJ Morgan Stanley Securities and Morgan Stanley MUFG Securities. The standout deal for Morgan Stanley in Japan on the M&A side during our awards period was Panasonic’s full acquisition of Sanyo Electric for $1.85 billion. It also demonstrated deep expertise, acknowledged by many of its peers in the market, in executing cross-border M&A transactions, including that between Toto Seikan and Stolle Machinery. The bank executed landmark equity offerings across a range of industries including the Nexon IPO. It has top market share in Japanese international bonds and samurai bonds, and remains a market leader in domestic bonds including zaitos and municipals. Its award of best investment bank in Japan acknowledges its attainment across the capital markets and M&A businesses. Alongside the Nexon IPO, Morgan Stanley further stamped its authority on the equities business by working on the Fukuyama convertible bond and several Reit offerings, including Industrial & Infrastructure Fund Investment Corporation and Japan Real Estate Investment Corporation. Nomura remains the dominant house for M&A in Japan and the yardstick by which all others are measured. The scale and reach of its operations mean it invariably works on by far the largest number of deals in Japan, and this remains the case this year as it advised on 134 deals worth a combined $56.5 billion. Goldman Sachs, JPMorgan and Deutsche Bank all came quite close to Nomura in terms of the total deal value they advised on but all worked on a fraction of the number of deals. Mizuho is Nomura’s closest Japanese competition in the M&A business. While Mizuho turns the tables on Nomura in DCM, with a market share of almost a quarter and deal value of $78.1 billion through 389 deals, Nomura remains the bank that most others see as the market leader, working on many of the marquee deals during the awards period while Mizuho concentrates more on volume. |
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Best Bank: Shinhan Bank |
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Shinhan Bank wins the best bank in Korea award, achieving excellent operating results across almost every sector of its business. Indeed last year, the bank achieved its best set of financial results since it was founded. Although it lags behind Kookmin and Woori in asset size, its market capitalization outstripped them both to stand at W18.8 trillion ($16.3 billion). The bank continued efforts to expand its customer base to 27.2 million. Shinhan also has 9.7 million people who use internet banking services – the highest number for any bank in Korea – demonstrating its progressive strategy on the use of technology in the banking sector. It is attempting to expand beyond its borders, opening new branches in Japan, China, Vietnam and Cambodia. With respect to corporate business, Shinhan grew its prime-quality assets by approximately W4.5 trillion in the face of fierce competition in the sector. It also increased the amount of money it is running in retirement pensions by approximately W2 trillion. This broad-based build across a diverse range of business earns it the recognition as best bank in Korea this year. Woori Investment and Securities was the most effective player in Korean equities, advising on 19 deals with a combined deal value of $2.5 billion for a 15% market share. Net income, operating revenues and total deposits were all up a healthy amount on last year. Woori succeeded in equities this year in spite of its stated aim of slowing further expansion in investment banking and concentrating on risk management, focusing on quality rather than growth in the near to medium term. Competition in the equities business in Korea, according to Dealogic, came primarily from Daewoo Securities, which had a market share of 13% by deal value. All of the leading foreign banks are active in the Korean market. Foremost among these over the past year were JPMorgan, Citi, Goldman Sachs and Bank of America Merrill Lynch. KB, the securities arm of Kookmin Bank, is the dominant force in Korean debt capital markets. It led underwriting of corporate bonds and ABS underwriting across the country last year. It also took steps to shore up its position in the domestic DCM business by introducing a new technology system that spans asset classes, including fixed income, and is aimed in part at enhancing its capabilities with respect to derivatives instruments. Competition for foreign banks in Korea is increasing but KB stands out as the domestic player doing most to compete in the debt capital markets. KDB, or Korea Development Bank, has been offering M&A services in Korea since 1996 but has leapt up the rankings this year with a market share of 18%. It succeeds primarily because of a deep knowledge of the often complex local laws and regulations and provides M&A advice not only to local but also foreign companies. Much M&A activity in Korea over recent months has been driven by Japanese institutions turning to acquisition targets in the country following the Japanese earthquake. Overseas banks have often struggled to come to terms with the regulatory regime in Korea and several of them raised this as a reason they are not more entrenched in the Korea market already. Goldman Sachs appears to be the most trusted of overseas investment banks in Korea and, on the largest cross-border deals, overseas banks, notably Goldman, Credit Suisse, Nomura, JPMorgan and HSBC tend to be heavily involved. But in a market where local knowledge is key, and in which it can provide services at a far lower rate than global rivals, KDB is our choice for best M&A house in Korea this year. |
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Best Bank: CIMB |
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As the pre-eminent southeast Asian universal bank – boasting consistent profits, robust risk management and a sophisticated product offering – CIMB is a much-celebrated feature on the regional banking landscape. Over the past year, the bank has reinforced its acclaimed credentials by posting strong growth across the board in deposits, mortgages, personal financing, wealth management, credit cards, remittances, non-interest income and auto financing. In the 2011 fiscal year, in the teeth of the euro crisis, the bank posted record profits before tax of M$3.1 billion ($981.8 million) compared with M$2.3 billion in 2010 and M$1.9 billion in 2009. Amid strong competition from the country’s biggest lender, Maybank, CIMB managed to generate its highest growth in new retail deposits in 2011, generating a record M$11.2 billion, compared with M$7.2 billion in 2010. The bank is aggressively pursuing its vision to become the country’s largest bank by ramping up its mortgage loan bank – a 11.2% expansion in the 2011 fiscal year – and personal finance loans. The bank’s total retail loan base had doubled from M$21.8 billion in 2006 to more than M$48.1 billion by the 2011 fiscal year-end. What’s more, CIMB struck a transformational deal in March with a memorandum of understanding to acquire Royal Bank of Scotland’s Asia-Pacific cash equities and investment banking business for a net $118 million. The deal, which demonstrates the shift away from global banks to well-capitalized regional franchises, cements CIMB’s investment banking dominance domestically and buttresses its regional ambitions, heaping the pressure on arch-rival DBS Group Holdings of Singapore. Based on 2011 Dealogic league table rankings, the combined CIMB-RBS wholesale franchise would sit in a comfortable seventh and ninth position in the M&A and ECM rankings, respectively, in the Asia-Pacific ex-Japan region. But it is in the domestic market that CIMB continues to stand out. The bank remains the top bookrunner, with about a 25% market share for ringgit deals between April 1 2011 and March 31 2012 with 174 issues, totalling M$28.77 billion. The bank also dominates the Islamic ringgit fixed-income market. Last year, the bank demonstrated its book-running prowess in some trail-blazing transactions, including the world’s first offshore renminbi for Khazanah Nasional Berhad, the strategic investment fund of the Government of Malaysia, to raise Rmb500 million. In equity capital markets, CIMB marketed M$7.2 billion of deals during the award period, including the M$2.7 billion IPO of Bumi Armada, an offshore oilfield services provider. Thanks to the quality of CIMB’s universal banking franchise, strategic vision, profitability and tactical poise, the bank, once again, comfortably wins Euromoney’s accolade as the best bank and best investment bank in Malaysia. |
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Best Bank: Khan Bank |
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As the mining sector in Mongolia continues to develop at breakneck speed, Mongolia has become one of the world’s fastest-growing economies. GDP growth was 17.3% in 2011, up from 6.4% in 2010. In this fast-paced economic environment, Khan Bank’s strong fundamentals have positioned it as the best bank in Mongolia, stealing back the accolade from Golomt Bank, which slipped back in its market share of loans but increased its market capitalization and remains a fierce competitor. Khan Bank’s success is evident in its strong financials. In 2011, net income was Tug58.4 billion ($41.8 million), nearly doubling on the year before and the bank’s total assets grew strongly to reach Tug2.24 billion, up 44% on the previous year. Khan Bank retains a 25% market share in loans and deposits. Mongolia offers great investment potential for investors keen to tap into the mining and infrastructure sectors. Leading the way is Eurasia Capital, the securities firm that has won Euromoney’s best investment bank award in Mongolia for the second year in a row. Headquartered in Ulaan Bataar, the company’s focus on long-term development and its extensive network in the region sets it above rivals. In August 2011, it raised $6 million for the Quam Silk Road Mongolia Fund, a hedge fund providing exposure to key drivers of the Mongolian economy. The fund invests in public equities listed internationally with assets in Mongolia, as well as those listed on the local stock exchange, to encourage long-term investment growth in Mongolia. In 2011, Eurasia expanded throughout the country and opened offices in Erdenet, Darkhan and Dalanzadgad (capital of the South Gobi region) to add to the office in Ulaan Bataar. Well placed to experience an economic boom in the next few years, Eurasia Capital hopes to capitalize on opportunities emerging in local capital markets through its extended network in these cities. |
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Best Bank: MCB |
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MCB is the best bank in Pakistan once again this year, posting decent numbers across the board in a market that remains in an often difficult transition. The transaction banking division’s performance in particular caught the eye. In consumer banking, the bank’s mobile service has registered more than 145,000 customers in a short time. The bank has also launched the first chip-based debit card in Pakistan. Within the first three months of its commercial launch, the bank has issued more than 50,000 debit cards. Allied Bank, the fifth-largest Pakistani commercial bank, is making the biggest strides in the investment banking business in a market that remains difficult to navigate. The bank successfully completed a number of complex transactions and its operations now include capital markets, project and syndicated financing, equity underwriting and advisory services. Among deal highlights was the debt-asset swap carried out by the bank for Kohinoor Mills, which had been on the verge of liquidation and had defaulted on its loans before. Allied Bank solicited interest in Kohinoor’s hosiery unit from Interloop, South Africa’s largest sock manufacturer, and eventually brokered a deal that saved the Kohinoor operations. For this deal and others, Allied is this year’s best investment bank in Pakistan. |
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Best Bank: Metrobank |
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GDP growth in the Philippines in 2010 reached 7.3%, but the economy was shaken by the eurozone debt crisis last year. Uncertainty in the US, and the natural disasters that devastated Japan and Thailand, meant GDP growth in 2011 fell to just 3.7%. Despite these shocks, the banking sector remained resilient, especially Metrobank, which is the best bank in the Philippines for the third year in a row. For 2011, Metrobank’s consolidated net income reached a record P11 billion ($260 million), 31.9% better than 2010, and total assets under management grew 41% to P382.1 billion. In 2011, Metrobank’s loan growth reached 16.5% and at the same time the bank maintained high asset quality. Gross NPLs fell by nearly P1 billion, bringing the NPL ratio down to 2.2%. Loan-loss cover rose to 99.5%, as the bank set aside P3.8 billion in provisions, which was 47.5% down on 2010 at the same time that credit costs have also decreased. This highlights the bank’s efforts to strengthen its balance sheet and improve on credit and risk management and makes Metrobank a deserving winner. Investing in the Philippines has changed dramatically over the past year and is poised for even greater changes. With president Benigno Aquino’s promise to curb corruption, the growth of public-private partnerships and loosening monetary policy, investment banking is due for an overhaul in the Philippines. But investment banking is already seeing some changes and UBS is driving the market. This year, UBS ranked first in the DCM league tables with over 30% of market share – twice that of any other bank – and fifth in the ECM league tables, according to Dealogic. The bank led landmark deals across the ECM sector, including a $200 million IPO for Puregold Priceclub, the first ever pure retail company on the Philippines stock exchange. The order book was oversubscribed and UBS outsold HSBC 60% to 40%, generating more than $200 million in demand, covering the entire base deal size. UBS was also a co-bookrunner in San Miguel Corporation’s $970 million concurrent convertible bond and equity placement: the largest ever equity and equity-linked offering in the Philippines and the largest dual-tranche equity and convertible bond deal in Asia ex-Japan for more than 10 years. |
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Best Bank: DBS |
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Few banks worldwide broke records in 2011, but DBS did. Its earnings, S$3.04 billion ($2.4 billion), were the highest ever for a Singapore bank, with net profit up 15% year on year. DBS thrived on the back of its balance sheet strength combined with tough risk management; despite heavy investment in people and infrastructure during the year, it logged an 11% return on equity. Consumer banking is the heart of DBS. It serves more than 4 million retail customers – not far short of the entire population, who traditionally grow up with a post office savings bank account (now a DBS subsidiary) and rarely sever links with the bank. It is the leader for mortgages, car loans, debit and credit cards and the number of branches and ATMs. On the institutional side, DBS is a leading domestic lender (syndicated as well as direct) and has a powerful treasury and markets business, with a leading Singapore dollar trading book and among the most active market-maker positions for most things connected to the currency, from cross-rates to money markets and derivatives. The private banking business is thriving, the structured finance business is active despite the downturn in those markets, and although its global transaction service business doesn’t compare with such banks as Citi as a regional force, it does retain the largest market share in Singapore dollar payment flows at the low-level giro and cheque clearing end. A new supply chain financing programme launched with retail group Dairy Farm Singapore is to be mirrored in several other markets in the region. Although this award is given for strength in Singapore, DBS more than any other local bank has always taken a pan-Asian view. It has been quick to seize opportunities from the internationalization of the renminbi through an impressive trade finance business. DBS faces stern competition not just from local banks UOB and OCBC, but also through the sheer scale of business conducted in Singapore by Citi, Standard Chartered and others. But the sense of sustainable and impressive growth across all areas of the business in a difficult year was impossible to ignore. Dealogic tables show DBS at the top of the pile for Singapore DCM and ECM, and among the leaders in M&A. There were three IPOs of note in 2011, and DBS was on all of them: the $5.5 billion IPO of Hutchison Port Holdings, which became the largest ever IPO from southeast Asia; the S$949.5 million IPO of Mapletree Commercial Trust, the largest Reit IPO in Singapore; and the S$776.2 million IPO of Perennial China Retail Trust. On the debt side, DBS was at the heart of the trend for non-Singapore borrowers to issue perpetuals in Singapore dollars, handling deals for Hong Kong blue chips such as Cheung Kong, Wheelock, Wharf and Henderson Land. Although M&A is not an established area of strength, DBS was involved in the privatization of Allgreen Properties by the Kuok Group, and its strategic advisory team handled landmarks such as the leveraged buyout of Sinomem Technology and the delisting of Pacific Shipping Trust. DBS has placed itself at the centre of new structures as they have come along, such as Reits and subsequently business trusts, and consequently tends to dominate underwriter roles as those sectors mature. It’s a forward-looking strategy and a successful one. |
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Best Bank: Commercial Bank of Ceylon |
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Commercial Bank of Ceylon maintains its position as Sri Lanka’s leading bank. It continues to have the highest market capitalization in the banking, finance and insurance sector at the Colombo stock exchange. Total deposits rose 22.6% over the awards period. Pre-tax profits were up almost 18% year on year. It operates the largest network of ATMs in Sri Lanka, adding 100 new machines last year. It is also the first Sri Lankan bank to enable customers to transact in renminbi, reducing conversion losses. NDB Investment Bank, a subsidiary of National Development Bank, is the acknowledged leader in Sri Lanka for debt and equity products and corporate advisory work. Last year it jointly managed the initial public offering of Union Bank of Colombo, the largest-ever Sri Lankan IPO. It also jointly managed the IPO of People’s Leasing Company, the second-largest-ever Sri Lankan IPO. A sign of the bank’s growing maturity came as it signed a memorandum of understanding with DBS of Singapore to work together across a broad range of areas including M&A, syndicated loans, project finance and equity capital markets. |
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Best Bank: Chinatrust |
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The saturated banking sector in Taiwan means that competition between banks is fierce and achieving substantial growth depends heavily on innovation to attract customers to unique services. This year, Chinatrust’s broad range of banking products ensured stable growth for the bank and confirmed its position as the best bank in Taiwan. Chinatrust has excelled in its high net worth banking products. In 2011, the bank designed a new membership package for HNW clients with a basic and add-ons structure to benefit loyal customers and integrating wealth management with a credit card loyalty programme. As a result, Chinatrust’s market share of VIP clients reached 12% in 2011; it has 20% of overall market share of assets under management at more than NT$1.9 trillion ($64 billion), the largest of all privately owned banks in Taiwan and up 5.5% on the year before. Net income grew by 28% to $571 million, making it the most profitable bank in Taiwan. After the merger of Polaris Securities with Yuanta, Yuanta Securities became Taiwan’s largest securities company and worthy winner of the best investment bank in Taiwan award. The newly extended Yuanta underwrote NT$28.7 billion of the total NT$138.5 billion in the market, through 25 IPOs and 69 SPOs, accounting for 20.7% of market share. Yuanta also ranked top in fixed-income underwriting between April 2011 and March 2012, with a 19% market share. The total market share of Yuanta and Polaris combined was 21%, 7.61 percentage points higher than the next highest competitor. Yuanta is also active in its role as an advisory firm. As a professional finance adviser, it has worked on two very successful M&A deals including a joint venture between Sino-American Silicon Products and Solartech Energy, in which Yuanta designed a successful share swap. Another involved the acquisition of Ralink Technology Corporation by MediaTek, Taiwan’s biggest chip designer, where Yuanta acted as adviser to deliver a comprehensive set of solutions. |
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Best Bank: Siam Commercial Bank |
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Siam Commercial Bank has always been among the leaders in Thai banking, but in the past two years its numbers have started to look exceptionally impressive. Measured against its obvious peers – Bangkok Bank, Kasikornbank and KTB – it turned in the highest 2011 net profit, return on assets, market cap, return on equity, percentage loan growth, number of branch and ATM networks, and lowest cost-income ratio. In most cases that dominance has continued into the first quarter of 2012. Year-on-year earnings per share growth in the first quarter was 53.5%; pre-tax profits were up 64.4% and deposits were up 10.5% at a time when the non-performing loan ratio fell to a decent 2.39%. It’s true that the Thai economy has been looking good despite a certain amount of political upheaval, and that a rising tide lifts all boats, but none are being lifted so high as Siam Commercial. This is one of those years when a bank that is not the leader in any of the constituent parts of investment banking wins the award. Morgan Stanley is best investment bank in Thailand because of its strength across several of them. With local DCM largely the preserve of local banks plus HSBC and Standard Chartered, it is in the other categories of M&A and ECM that the traditional foes compete. Morgan Stanley is the only name that looks impressive in both. In M&A, its main mandate last year was on the cross-border acquisition of Italian department store la Rinascente by Thailand’s Central Retail Corporation. This was one of those symbolic deals: emerging Thai money buying a venerated European business in a reversal of traditional investment flows. On the ECM side, the biggest deal was as sole bookrunner on a $305 million block trade in Shin Corporation, the largest ever telecoms secondary in the country. This was, in effect, a re-IPO of Shin Corp and helped Temasek exit a problematic holding. |
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Best Bank: Asia Commercial Bank |
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Vietnam has a cluster of local leaders, with received wisdom tending to place Asia Commercial Bank and Techcombank at the top of the heap. Each has different strengths but it’s ACB whose financials stand up to the greatest scrutiny. ACB has the largest market share in terms of deposits in the industry, and was the only one of the five main lenders to increase its share in 2011. It’s also the leader in lending, where it has pulled away from closest rival STB. Consequently it’s top in terms of total assets too. It’s among the most profitable banks in the business – although Eximbank and Techcombank are at a similar level – and has an impressively low NPL ratio of just 0.85% as of December 31, behind only STB. Return on equity, at 40.1% in 2011, is far higher than that of any peer. These are difficult times in Vietnam, with an uncertain economic outlook and national challenges around inflation. So the prudence and stability that ACB offers, with good capital adequacy and provisioning, stand it in good stead. Credit Suisse is the clear leader in investment banking in Vietnam. Since it set up in the country in 2001 it has raised over $5.5 billion of capital for Vietnamese enterprises and foreign entities with Vietnamese assets, a figure it says beats all other investment banks combined. In our review period alone, the figure was around $3 billion. Examples included all areas of the capital markets. There were convertibles for Vincom, straight bonds for HAGL, M&A for Vietcombank and KKR, and structured finance for Lien Viet Post Bank. For PetroVietnam, it arranged a $904 million buyer’s credit and commercial term loan, the largest such transaction ever in Vietnam. Many of these deals were landmarks: the HAGL bond was the first international high-yield offering from a Vietnamese issuer, Vincon’s was the largest capital market transaction ever by a private-sector Vietnamese issuer, and KKR’s purchase of 10% of Masan Consumer was the largest private equity transaction in Vietnam to date. At the time of writing Credit Suisse was on an announced but not completed transaction, a potentially $1 billion deal in which TNK-BP will acquire BP assets in Vietnam in the largest ever M&A deal in the country. |
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