Australia
Best domestic bank National Australia Bank
There is no question that National Australia Bank is the best bank in Australia. It avoided the bad debts that have set back its competitors and last year made a record net profit of A$2 billion (US$1.5 billion). This is underpinned by one of the lowest cost to income ratios of any Australian bank.
Best securities house JB Were
JB Were remains one of the few securities houses not affiliated to a bank and sometimes garners client business from this as a consequence. Many of the international banks now outstrip its market share its brokerage has 6.7% of the market but the brand remains strong. It is also a significant player in underwriting.
Best foreign bank Citibank
Australia’s big-four banks have been forced to take notice of Citibank’s drive into their market, both in commercial and retail banking. Citi’s net profit in 1996 was up 19.4% to US$160 million. It was recently awarded the mandate to handle all the high-volume currency disbursements for the Reserve Bank of Australia.
Best foreign securities firm Deutsche Morgan Grenfell
Deutsche Morgan Grenfell wins this award for its breadth of business. Its fixed-income operations, previously run out of Bain, have been absorbed into the DMG brand name. According to key local surveys it is number one in bonds and in January to April ranked number one on the Sydney Futures Exchange. Outside of government bonds it has lead managed 56% of bonds and securitization issues since that market was created in 1988. In the first five months of 1997 it ranked third in stock market turnover.
China
Best domestic bank Bank of China
When Euromoney sounded out the opinion of local bankers, the Bank of China was highlighted for its international cadre of management and its amazing development to a full-service operation from being China’s forex bank. It has a particularly good franchise in Hong Kong, now a part of China. It is also less exposed than many other banks to the bad debts of China’s state-owned enterprises.
Best foreign bank HongkongBank
The Hongkong & Shanghai Bank was given a licence to conduct renminbi business in Shanghai one of only four original banks to get one. In the latter part of 1996 it linked up with the Industrial and Commercial Bank of China’s ATM network in Shanghai (28 machines) and Guangzhou (30 machines). It has seven branches in China, while sister bank Hang Seng has three representative offices and one branch. Located in Pudong, its new branch has four floors and is opposite the central bank. It has the largest dealing room of any foreign bank in China, and two large training rooms. It is the only B share custodian based in China and has the lion’s share of this market. When you pay by credit card at your Shanghai hotel it is more than likely that HongkongBank will process the slips. Although statistics on the matter are hard to come by, analysts say HongkongBank is the biggest foreign lender in mainland China.
Best foreign securities firm Peregrine
There are few arguments that Peregrine is doing good business in China. The Hong Kong-based house has been involved in many of the juiciest mandates to come out of China. It has played an active role in mainland companies listing in Hong Kong (“H” shares). Moreover, it is the dominant player in red-chip business Hong Kong-incorporated companies with Chinese parents. Indeed it arguably created the concept. How? Relationships of course. The best-connected adviser to such companies is Peregrine co-founder
Francis Leung, who is on the board of several of them. Peregrine is well positioned to take advantage of its connections its shareholders are the leading Hong Kong tycoons, who are also among the principal direct investors in China.
Hong Kong
Best domestic bank HongkongBank
When HongkongBank’s ATM network went down for two hours in April it made the evening news. This rare slip the first systems failure in 11 years is mentioned merely as an illustration of how important the bank is in Hong Kong. When it sneezes, everyone notices. It controls more deposits than anyone else, has 241 branches and still prints around 80% of the banknotes used in the special administrative region. It also topped the syndicated loan league table for Hong Kong borrowers, arranging US$12.1 billion between June last year and May.
Best securities firm HSBC Investment Bank
The joke among merchant bankers in Hong Kong was always “if only HongkongBank could get its act together in investment banking, well, there would be no stopping it”. This was usually said in a tone that suggested that this, thankfully, was not possible. But HSBC Investment Bank has finally began to punch at somewhere approaching its weight. This has meant total dominance of Hong Kong dollar bond issuance, with a 52% market share from June 1996 to May 1997. In the league table for the same dates for Hong Kong IPOs it is also top, having lead-managed issues totalling US$599 million. The bank has great relationships based on its long-term commitment to Hong Kong entrepreneurs and its willingness to stand by them in hard times. With such relationships go the high-profile mandates, such as KS Lee’s spin-off of Cheung Kong Infrastructure which it lead-managed last July.
India
Best domestic bank State Bank of India
In a league of its own, State Bank of India controls 24% of total banking assets and 21% of total deposits, with a return on equity of 22%. It is a universal bank with the largest branch network, and the oldest name.
Best domestic securities firm DSP Merrill Lynch
The 130-year-old firm controlled by four generations of the Kothari family now has the US firm as a 40% shareholder and uses the Merrill bull logo. However, it is still classified as a domestic firm and is unusual among them in being strong in primary debt and equity markets as well as secondary ones. It accounted for 91% of domestic debt issuance last year. It was involved in October in the $370 million State Bank of India GDR and originated the successful yankees for Reliance Industries.
Best foreign securities firm Jardine Fleming
It has been another good year for Jardine Fleming in India. In primary equity issuance it had a 57% market share, lead-managing $800 million of issues. The highlight was probably VSNL, which had stalled in the past, but was launched successfully in March with Jardine Fleming obtaining half the demand. At $526.6 million it was the largest ever London-listed GDR. The firm also advised on 14 public and private M&A transactions over the past year.
Indonesia
Best domestic bank Bank Bali
There are 240 banks in Indonesia and the big ones are linked with large industrial groups. In one recent case a large forex loss was absorbed by one bank’s industrial group and didn’t appear in the balance sheet. As this suggests, the lack of transparency that pervades the management culture of Indonesian banks is neither a good thing nor marked by many exceptions. Bank Bali is one. While only the eighth largest bank in the country, it has a commitment to transparency. It is the market leader in personal banking and is currently revamping its branch network in a programme called Project Neutron, while it holds a 70% market share of credit cards in circulation. However, because of its relatively small size and its ownership structure family-controlled with United Overseas Bank of Singapore holding a stake it may be a takeover target for one of the larger banks linked with an industrial group.
Best domestic securities firm Lippo Securities
With its connections, Lippo Securities could hardly avoid being a premier name. But local rivals praise its strong management. Along with Makindo it tends to dominate local brokerage volumes, and was market leader with Rp3 trillion ($1.23 billion)of turnover in the first quarter. Its dominance is partly founded on its access to the retail market which now constitutes a large portion of overall stock market turnover. Increasingly it is going international, too, having just hired a new head of international securities from Schroders. Among domestic firms it ranks high in IPOs although this business is dominated by foreign firms.
Best foreign bank Citibank
Citibank is about twice the size of any other foreign bank in Indonesia on most measures. Its growth rate of 19% is impressive especially since risk management has proven to be so good with $1.3 billion of assets and an average risk rating just below investment grade the bank has taken no loan losses during the past three years. In the consumer business it targets 6 million people whose average income exceeds $4,000. It is currently doing business with 7.3% of them.
Best foreign securities firm Peregrine Sewu Securities
Asian merchant bank Peregrine’s joint venture with local partner Gunung Sewu group goes from strength to strength. In brokerage it has seen its ranking on the Jakarta Stock Exchange increase substantially by volume. In 1996 it ranked 13th of the 197 firms in operation, but in January to April of this year it rose to eighth. Over the past year Peregrine has also arranged or lead-managed over $4 billion of fixed-income financings for Indonesian issuers. It was also the sole lead in April for the second largest non-privatization IPO in Indonesia, for PT PutraSurya Multidana.
Japan
Best bank Bank of Tokyo-Mitsubishi
Most Japanese bank mergers tend to be a burden rather than a boon to the participants. BTM has proved that in a modest way a merger can be made to work. It has cut costs, closing 40 overseas branches and reducing staff by 5%. Its credit rating has been raised by Moody’s to Aa2 the first upgrading of a Japanese bank in years. The merger has won it new business too. In Euromoney‘s global forex poll in May it rose from 19th to 13th. The bank is even starting to make headway in capital markets: last month it won its first big bond mandate, joint-bookrunner on an Asian Development Bank global. Its New York listing (and consequent US-standard reporting) means its financial statements are more reliable than those of any other Japanese bank.
Best securities house Not awarded
Until its recent scandal, Nomura Securities was by some way Japan’s best broker. It consistently ranked top in underwriting league tables and in market share of equity trading. But the scandal makes its future uncertain. Many clients have deserted it at least temporarily; as a punishment the finance ministry will close some of its businesses for two or three months. It’s too early to tell whether, when the row dies down, it will remain number one in Japan, or whether its nearest rivals, Nikko or Daiwa, can overtake it.
Best foreign bank Citibank
These days the chic place for Japanese professionals to hold a bank account is Citibank. Over the past two years, the US bank has begun to build an exciting retail business in Japan. Its breakthrough came by cajoling small local banks to allow its cards access to their networks of cash machines. It has won customers by beating Japanese banks in the level of service (admittedly, not hard). It doesn’t charge for ATM withdrawals, for example, and is a pioneer in telephone banking. From only breaking even in 1995, this year the bank expects to make profits of about $60 million in Japanese retail business. Its network has expanded to 21 branches. It is also a major player in wholesale businesses, particularly foreign exchange and securitization.
Best foreign securities firm Merrill Lynch
Merrill Lynch’s all-round capabilities in Japan continue to impress. Its share of brokerage hovers on or around that of the weaker of the big-four securities firms some days it exceeds it. Its equity research is second only to Nomura’s. In the debt markets it is equally strong, with its MTN distribution being the best of any foreign firm. It was the first foreign firm to act as sole lead-manager for a foreign government institution, SEK of Sweden. It also named Nomura Trust as management company for these bonds, the first time it had served in such a role other than for its parent, Nomura Securities.
Korea
Best domestic bank Shinhan Bank
Some analysts say sorting the wheat from the chaff in Korean banking is almost impossible because the sector is so highly regulated. Individual flair is stymied by the ordinances of the central bank. But Shinhan Bank is the favoured choice because it has not been saddled with so many chaebol (industrial conglomerate) connections and bad loans. One analyst calculated that it has $702 million in non-performing loans as compared with Korea Exchange Bank, which has $4.5 billion. It focuses on lending to small and medium-sized enterprises and it has the highest return on loans among large national commercial banks.
Best domestic securities house Dongwon Securities
As with domestic banks, it is argued by some that making a choice is difficult, because the similarities are so great. But for the past three years Dongwon was the most profitable securities company in Korea and it has the lowest overheads in proportion to operating income. Other houses may record losses in 1996 but Dongwon is looking at a profit of W26 billion ($18 million). It was the top IPO house as sponsor of seven issues raising W1.7 billion.
Best foreign bank Citibank
With its 11 branches Citibank is a dominant presence the only foreign bank to have more than two branches. It is the only foreign bank to be a member of the Electronic Interbank Funds Transfer System. It is also a bridge between Korean companies and the rest of the world, for example, arranging a $143 million pre-export finance loan for Kobrasco, a joint venture between Korea’s Posco and Brazil’s CVRD.
Best foreign securities firm ING Barings
ING Barings is uniquely strong in both equities and debt. In the former it tops polls for research and execution. In debt it has been making great strides. When the Korean Eurowon market opened up this year, with two issues by the World Bank and the European Bank for Reconstruction & Development, it was notable that ING Barings was the only firm able to place bonds in both the international and domestic tranche.
Malaysia
Best domestic bank DCB
The need for mergers in the Malaysian banking sector is apparent. Around 24% of loans are on the books of foreign players. Malaysia’s financial whiz kid Rashid Hussain, married to the daughter of Robert Kuok, Malaysia’s richest industrialist, has struck a blow for consolidation. His company, Rashid Hussain, has created the third-largest banking group in the country, absorbing Kwong Yik Bank into DCB a bank controlled by Hussain. This will combine Kwong Yik’s retail base in the Klang Valley near Kuala Lumpur with DCB’s strong corporate banking franchise. Analysts have praised the deal as beneficial to all.
Best domestic securities firm Rashid Hussain
There’s no surprise here. Although Rashid Hussain is not the largest brokerage in town it has focused on institutional clients rather than the retail market it is certainly the most professional and internationally respected. Hussain himself is the deal maker. “There doesn’t seem to be anyone else as good as him,” one foreign broker told Euromoney. The merged bank DCB will also boost the investment banking business, with Rashid Hussain Securities expected to work more closely with DCB Sakura, DCB’s investment bank. Key deals include its role as global coordinator on the M$700 million (US$282 million) offering for YTL Power International in March.
Best foreign bank HongkongBank
It is almost a misnomer to describe HongkongBank Malaysia as a foreign bank. Its size and presence in the country make it something of a local bank. A former branch manager was even recently honoured as a dato (a traditional chief). The bank has 36 branches and 4,000 employees. Its attributable profit was up 54% last year and its assets rose by 15%.
Best foreign securities firm Jardine Fleming Apex Securities
This joint venture employs 250 Malaysians and is involved in a wide variety of activities. It advised the Proton group on its £51 million (US$84 million) acquisition of car-maker Lotus and was asked by government-owned postal bank Bank Simpanan Nasional to assist and transfer expertise to its investment bank. An innovative share and warrant structure was used in the secondary offer for AMMB Holdings’ $100 million secondary placement. It also led the only Euroconvertible in the period for Sungei Way Holdings, which at $110 million was six times oversubscribed. Its greatest competitor on the broking side is Credit Lyonnais Securities Asia.
New Zealand
Best bank Bank of New Zealand
Domestically owned New Zealand banks are a thing of the past. Bank of New Zealand, which was always the country’s premier bank, was hit hard in the recession and was subsequently bought by National Australia Bank. It has a relatively clean loan book and is a particular favourite with analysts, with assets totalling $16 billion. The one to watch, however, is Westpac, which has bought Trustbank. The process of integration is under way and when complete will make the new bank a major rival.
Best securities firm First NZ Capital
Clearly the market leader, First NZ Capital is 25% owned by CSFB and 75% by its management. It has ranked first in secondary market trading on the New Zealand Stock Exchange in each of the last four years, and for the past five years has also lead-managed more equity issues than anyone else. In 1996 its market share of total NZSE trades was 21%. It also dominates in corporate finance. It is a joint lead manager on the New Zealand Telecom $1 billion share buy-back. A key transaction last year was the NZ$2 billion (US$1.4 billion) purchase of the Forestry Corporation of New Zealand, the second-biggest transaction ever in the country. It worked as adviser to the group of acquirers, which included Hong Kong-based Citic Pacific.
Pakistan
Best bank Faysal Commercial Bank
The only locally listed bank which has its origins in a foreign-based financial house (Dar-ul-Mal Islami Group) Faysal Commercial Bank is reckoned to offer a superior product to a well-identified market. With total assets of just over $1 billion, it can afford the technology and high set-up costs for more innovative products.
Best domestic securities firm Khadim Ali Shah Bukhari
Khadim Ali Shah Bukhari is still the dominant local broker with the lion’s share of brokerage volumes. Its boss, Nasir Ali Shah Bukhari, is also highly regarded. He is regularly invited by the government to give his thoughts on economic policy.
Best foreign bank Citibank
Citibank is easily the largest and most aggressive foreign bank in Pakistan and remains highly profitable despite taking recent hits on its loan portfolio. Its market penetration with corporates is impressive and it is now going actively after consumer business, with its Visa credit card as a major selling point.
Best foreign securities firm ING Barings
In Pakistan’s highly competitive and volatile market, ING Barings, established in 1995, produces the most consistent and level-headed research entirely based on fundamentals and investment recommendations, and has some 35% of foreign investor volume. WI Carr, which covers the widest array of companies, and Crédit Lyonnais, more narrowly focused, are also highly rated and widely used by foreign institutions. All three have good execution and trading abilities.
Philippines
Philippines Best domestic bank PCIBank
Staffed at the senior level with ex-Citibankers, PCIBank is regarded as the most professionally managed of the domestic banks. It has strong asset quality and the highest return on equity of any bank in the Philippines at 21.4%. Its president, Rafael Buenaventura, is regarded as the country’s most senior banker his words carry the weight of a central banker.
Best domestic securities firm PCI Capital
PCI Capital has the top spot in both the debt and IPO league tables, and uses its parent, PCIBank’s 250 branches to distribute shares over the course of 1996 it sold about $19 million equivalent in this way. Net income has grown by 40% over the past four years.
Best foreign bank Citibank
Manila is Citi’s cultural home in Asia. A disproportionately large proportion of the financial intelligentsia in the country is either ex-Citi or still working for the bank partly because this was where Citi centred its regional training in the 1960s. In 1996 Citi’s Asia Pacific Banking Institute returned to Manila in a move that takes the bank full circle. Its position locally remains dominant by almost any criteria. One example suffices. Its local balance sheet is about $2.7 billion, which makes it equal to the collective size of all the other foreign banks in the Philippines.
Best foreign securities firm ING Barings
The growth of ING Barings in Manila is start-ling. Led by Bing de Guzman it increased its staff to 99 in 1996 from 29 in 1994. It ended 1996 with a record profit of $21 million, up 24% on the year before. This was partly fuelled by its dominance in trading Philippine debt. Its expertise in this area gained it a senior role on the $690 million Philippines Brady exchangable, one of the deals of last year. It also helped open the Europeso market this year with a Ps3 billion ($113 million) issue for the European Bank for Reconstruction & Development.
Singapore
Best domestic bank United Overseas Bank United Overseas Bank has the largest branch network in Singapore, substantially the highest return on equity and the leading position in consumer banking. Almost a third of its profits result from foreign business, with UOB possessing the largest number of regional offices of the big four. It has an office in nearly every country in the Asia-Pacific region.
Best domestic securities firm DBSBank
DBS comfortably tops the IPO league table, and with its 28 professionals is a big player in corporate finance overall. It led six local-currency debt and warrant deals in 1996 and also launched the first zero coupon bond in Singapore, a US$55 million deal for Acer.
Best foreign bank HongkongBank
HongkongBank has been on the island almost as long as the Singapore sling since 1877 in fact. It has 11 branches, is a leading player in trade finance and is pushing into consumer banking where it is marketing its Powervantage personal banking product. A Goldman Sachs research piece noted that its main competitiors are the domestic players. And it should be added, Citibank, whose presence in Singapore is very strong. HongkongBank is one of the dominant players on the Simex derivatives exchange too with an average 10% market share.
Best foreign securities firm ING Barings
ING Barings has one of its largest regional operations in Singapore, with around 300 staff. Its key strength is in research in which it is continually ranked top by most surveys. It is one of only three non-Japanese foreign houses to hold an international seat on the Singapore stock exchange, and accounts for about 4% of market turnover.
Taiwan
Best domestic bank Chinatrust
Most local analysts like Chinatrust, partly because it is dominant in credit cards in Taiwan its 1.3 million cards surpass Citibank’s tally. Citibank is one of Chinatrust’s principal competitors, although Chinatrust benefits from a good local brand and 55 branches. It is one of the most profitable of the 42 local banks in Taiwan, with first-quarter pre-tax profits growing by 129%, though this masks some extraordinary items. The bank’s main thrust is consumer banking and innovations include a detailed database of its customers, (particularly credit-card users) to work out how to cross-sell other products. Another bank that receives praise is Sinopac, which is smaller than Chinatrust but was only established in 1992 it is staffed by around 70 ex-Citibankers.
Best domestic securities firm CapitalBroking
CapitalBroking has been extremely profitable in Taiwan, which has one of the largest daily share turnovers in the region outside Hong Kong. Although Capital is not the biggest broker (Yuanta is) and does not have the largest branch network, it is well diversified. In 1996 it made NT$645 million (US$23 million) profits compared with Yuanta’s NT$542 million. This is put down to its strength in underwriting it led 17 deals in 1996 and ranked second overall and its superior management.
Best foreign bank Citibank
In 1996 Citibank earned NT$4.7 billion ($168.5 million) in Taiwan, more than the combined earnings of all the other foreign banks there. It is the largest foreign bank by deposits and assets and has eight branches. It is even venturing into the art world it offered the organizers of a French impressionist exhibition an interest-free loan of NT$800 million, a unique form of sponsorship as yet unmatched by any other bank in Taiwan.
Best foreign securities house Jardine Fleming
Jardine Fleming still has the biggest market share in broking although it has lost some ground in recent years as competition has intensified. But it is unlike its foreign rivals because its 320 staff sell to retail investors as well as international institutions. It also has an asset-management business. Close competitors include HG Asia which employs 25 people and Citibank, whose brokerage volumes have grown by 60% month on month since last June. ING Barings would have been an even closer rival had Merrill Lynch not poached its team earlier this year.
Thailand
Best bank Thai Farmers Bank
In many ways it is difficult to look beyond Bangkok Bank when looking for Thailand’s best bank. Apart from anything else it is Thailand’s biggest bank and also one of south east Asia’s. However, analysts are keen on Thai Farmers Bank in the face of the ongoing turbulence in Thai banking. It has the lowest exposure to real estate of the big six and has gone furthest in expanding into high-margin personal banking, having just refitted and updated its branch network. The approach of president Khun Bantoon Lamsam also wins plaudits for its conservatism.
Best domestic securities firm Phatra Thanakit
Phatra Thanakit is not the biggest securities firm in Bangkok. With an 8% brokerage share, Securities One is bigger, partly as a result of its acquisition of First Asia Securities last year. However Securities One has a 22% shareholding by Finance One, whose shares were suspended earlier this year. Phatra Thanakit wins plaudits locally for its research and has a reputation for conservatism. One local broker mentioned that he was particularly impressed by its lack of exposure to margin debt from retail investors a dicey business given the downward trending Thai stock market. It also has a tie-up with Goldman Sachs, for which it brokes foreign orders.
Best foreign bank in Thailand Citibank
Citibank is Thailand’s leading issuer of Visa and MasterCard, with a 35% market share. It recently opened its so-called model branch in Bangkok, which is the largest in the world. It is ranked in the top three forex houses in Thailand with a treasury team of 40 dealers, and was recently appointed a primary bond dealer for Thailand’s central bank.
Best foreign securities firm Jardine Fleming Thanakom
Set up in 1988, Jardine Fleming’s joint venture in Thailand regularly wins broking polls. Its analysts Scott Christensen and Dan Fineman gained plaudits for correctly calling the downturn in the stock market against “strong opposition” rumours circulating from Bangkok hold that it went as far as death threats. It has a foreign market share of 8% and its corporate finance mandates have included advice to the finance ministry on it sale of Bangchak Petroleum. It earned revenues of $34 million for 1996. Jardine Fleming holds a 43% stake (the legal maximum is 49%).
Vietnam
Best bank Asia Commercial Bank
Asia Commercial Bank is Vietnam’s most innovative private bank with business covering the range of retail and commercial sectors. It was among the first in the country to issue Visa cards and MasterCards and is pioneering the provision of retail credit. Solvency is a major headache for all Vietnamese banks, as they wrestle with exposure to a depressed property sector. However ACB has sought to improve its shareholders’ lot by having its books audited to international standards. It recently sold 26% of its equity to a group of foreign shareholders, including Jardine Matheson, Lucky Goldstar, The Vietnam Fund (part of Lloyds Bank Asset Management) and Dragon Capital.
Best foreign bank Standard Chartered Bank
Standard Chartered Bank has committed substantial resources to a market that is currently very competitive and doubtfully profitable. It has a full branch in Hanoi and a representative office in Ho Chi Minh City. It expects to upgrade the latter to a full branch by the middle of next year. Standard Chartered’s predominant activity in the country is trade finance for multinationals. But bigger Vietnamese companies are increasingly demanding its services, often in conjunction with a local Vietnamese banking partner. Trade finance, treasury and corporate advice are the most active sectors. Offices across the Mekong region, in Laos, Cambodia and Myanmar, complement the Vietnam operation and extend Standard Chartered’s cross-border trading facilities.
