Best bank
Kookmin Bank Best equities house
Goldman Sachs
Best debt house
Citigroup
Best M&A house
Morgan Stanley
Kookmin Bank, like several other local firms, has suffered recently from Korea?s credit card crisis. This came after a government-led initiative encouraged leading banks aggressively to push their credit card businesses, which resulted in an average of 4.5 cards per economically active citizen and led to a series of bankruptcies.
Kookmin?s 2003 financial results reflect the aftershocks of the national credit card madness. But it remains by some margin Korea?s strongest bank and this alone argues for its retaining the best bank award for the third consecutive year. Its non-performing loans are the lowest of any bank in Korea and its tier 1 capital adequacy ratio is second only to Shinhan Bank.
Because it is so geared to the retail market ? the bank lends to 60% of Korean households and has number one market share for retail deposits ? Kookmin enjoys higher net interest margins than its competitors and, arguably, is better placed for an economic rebound as the retail market begins to spend and borrow again.
Goldman Sachs wins the award for best equities house in Korea ahead of limited competition on the basis of several well-executed deals. Although rivals raised more in absolute terms, the transactions emanated from just one client. Goldman Sachs was successful in raising $241 million for Korea?s largest shipbuilder, Daewoo Shipbuilding & Marine Engineering, in a fully marketed secondary GDR offering. In September, it also successfully raised $465 million for Kookmin Bank in an ADR issue, one of the largest transactions for the year in Korea and the second largest ever non-privatization Korean ADR, the largest being another Goldman-led ADR for the same client.
Citigroup is the leading debt house in Korea by some distance. As well as the usual issuance from the agency banks, several domestic houses also raised more capital in Korea than Citigroup. They are nowhere to be seen in the G3 currency market, however, where Citigroup dominates.
In the 12 months under review, Citigroup raised $2.8 billion for Korean issuers from 31 issues, making it comfortably the largest international debt arranger for Korean borrowers. In addition, Citigroup topped the league tables for Korean loans with $995 million of lending ? a position that can only improve with the acquisition of Koram Bank.
Notable Citigroup deals included the $1 billion offering for the Republic of Korea, a total of $1.4 billion for Kexim, $850 million for Korean Development Bank and a $600 million issue for Hana Bank. Citigroup also successfully issued a ¥30 billion Euroyen deal for the National Agricultural Cooperative Federation and a ¥65 billion samurai bond for Korean Development Bank.
Morgan Stanley has led Korean M&A in the past 12 months, an active period for continued consolidation and restructuring of domestic financial institutions. Morgan Stanley advised on six transactions with a total value of $5.7 billion, more deals and a higher value than any other bank and enough to knock CSFB from the top spot.
Key deals included the Chohung merger with Shinhan Financial, US private equity fund Lone Star?s acquisition of a controlling interest in Korea Exchange Bank and the acquisition of Hanaro Telecom by an investor consortium led by AIG and Newbridge Capital.
Morgan Stanley was also active in the cross-border sector, on a rare overseas acquisition by a Korean entity, advising Sorak Financial Holdings, a consortium led by Kookmin Bank and Temasek, on the acquisition of Bank Internasional Indonesia. Morgan Stanley also participated in the first restructuring of the Korean asset management sector, advising on the acquisition of HITC by US asset manager Prudential Financial Group. The bank also advised internet auction business eBay on the acquisition of the shares it did not already own in Korea?s leading online auction business, Internet Auction Co.
