Best bank – DBS Bank
Best equity house – DBS Bank
Best debt house – DBS Bank
Best M&A house – CSFB
Competition continues to increase in Singapore’s banking market as foreign banks pile in. And as the number of foreign players increases, lending opportunities are shrinking. Even the mortgage market is now mirroring the corporate lending market on its downward spiral. This is bad news for the big three domestic banks: DBS, UOB and OCBC. According to analysts there is no bank that stands out across the board. And on the consumer side of the business it is especially difficult to differentiate.
However, the consensus is that the bank dealing most effectively with these challenges is DBS. Seeing its traditional revenue streams coming under the most pressure, it has been forced to look to other businesses such as wealth management. For example, in attempting to offer customers alternative investments, it has increased sales in its wealth management business from S$1.6 billion in 2001 to over S$3 billion (US$1.8 billion). The growth surge is definitely helped by its strong consumer franchise. It claims to have close to a 60% market share in savings deposits. It is also leading the other banks in attempts to go regional. While its competitors are breaking into the Malaysian market, DBS is leading the charge into Greater China, a tougher, but potentially more lucrative market. Its acquisition of Dao Heng Bank in 2001 will help it take a role in the mainland market.
DBS was as successful in equity as it was in general banking. It was global coordinator and joint bookrunner and underwriter for Singapore’s most important IPO of the year, Singapore Post’s S$684 million offering, which attracted strong demand, enabling the deal to price at the top end of the range. DBS also launched the first real-estate investment trust in Singapore, for CapitaMall. It was five times oversubscribed and appealed to retail investors, who picked up 39% of the S$235 million deal. To prove the success was no fluke, another larger real-estate investment trust followed for Ascendas-MGM Funds Management, coming in at around S$275.7 million. This transaction was also five times oversubscribed. On the secondary market side it is a similar story. The merger between DBS and Vickers Ballas, to create DBS Vickers Securities, has created a much stronger force. In secondary market trading it is consistently ranked in the top five by the Singapore exchange.
DBS also takes the best debt house award, fighting off strong challenges from Standard Chartered and Citigroup and Singapore’s home-grown OCB. In syndicated loans it maintained its position as a top-three arranger, led more sole mandates and covered a wide spread of industries. Deals of merit include the oversubscribed and upsized $300 million transaction for Systems-on-Silicon Manufacturing and the small but important $22 million term loan for AirOcean Group, a Hong Kong based logistics company. DBS was also active in the securitization, with a S$505 million deal for Ergo Insurance and a S$335 million offering for Fraser and Neave Limited. The pick-up by foreign investors was proof that DBS is as capable of structuring a deal as any of the larger more globally experienced operators. DBS also took several Singaporean corporates to the bond market for the first time. In April, Singapore Post launched its inaugural S$300 million 10-year bond, which was covered in just under 30 minutes.
CSFB takes the best M&A house award after a strong year in Singapore, advising on four publicly disclosed M&A transactions worth $3.5 billion. It completed three of the four. As well as the domestic-domestic deals it was involved in one of the few cross-border deals, taking Ascott Group overseas. Ascott bought a 50% stake in Citadines, a Paris-based corporate, with a call option to acquire the remaining 50% by the end of May 2004. It helps Ascott transform itself from an Asian-focused corporate to one capable of competing in two regions. CSFB was also involved in the largest M&A transaction to take place in Singapore in the period when StarHub merged with SCV, a deal believed to have been worth about S$2.5 billion.
