Best bank – Bank of the Philippine Islands
Best equity house – Deutsche Regis
Best debt house – JPMorgan
Best M&A house – ING
Banks in the Philippines face faltering GDP growth, weakening domestic demand and a lack of quality corporate credits to lend to. This has meant a decline in loan balances. The bank that once again stands out from the crowd in such a challenging market is Bank of the Philippine Islands. While other banks’ corporate loan portfolios shrank, BPI’s grew by 4.4%. It continues to dominate the retail market too. It’s still the leader in the mortgage market, with a 20.1% market share, and also leads in electronic banking. It has the largest branch and ATM networks and the largest share in debit card transactions. It also leads in consumer lending.
Those equity houses that survive rely on secondary market trading volumes. The best equity house in such stressful times is Deutsche Regis, which built market share to reach 8.5% in 2002.
There was little variety in the Philippine debt markets in the past year. And the headlines were dominated by the sovereign’s regular forays into the international bond markets to fund its ballooning budget deficit. But deals often failed to go as smoothly as planned. As one banker carefully puts it, the Philippines got deals away in spite of itself. At the forefront of attempting to limit the damage was JPMorgan. It was involved in the republic’s $300 million reopening of the 2009 bonds and $500 million reopening of its 2013 bonds. JPMorgan can also take much credit for taking the sovereign to the euro market. February’s seven-year e300 million deal was the first euro offering for two years by an Asian sovereign and the first such issue to go beyond a five-year tenor. Away from the sovereign market, JPMorgan was one of the few houses to pick up any business. In February it took Ayala Corporation to the international markets for the first time since 1999 with its $200 million bond.
In a small and tough M&A environment, ING stands out as the dominant M&A house. During the 12-month period it successfully closed five deals whereas its closest competitors all closed just one. The volume of ING’s transactions, $295.3 million, was about 40% of all completed transactions. In addition it was involved in about half the number of deals. Important deals included the sale of a 59% stake in William, Gothong & Aboitiz Inc to Aboitiz Equity Ventures. This $68 million deal set the wheels in motion for the consolidation of the ownership structure of the Philippines’ largest shipping company.
