BEST BANK
ICICI Bank
BEST EQUITY HOUSE
Kotak Investment Banking
BEST DEBT HOUSE
Citigroup
BEST M&A HOUSE
DSP Merrill Lynch
ICICI is India’s largest privately owned bank and once again wins the best bank award. As Indian economic growth gathers pace, ICICI is reaping the benefits, especially given its heavy retail focus. Of the bank’s total loan portfolio, more than 60% is accounted for by retail credit, one reason why the bank commands a market share of 33% of retail consumer finance and 25% of credit card finance. ICICI increased its customer base by 31% last year to 13.7 million accounts and has more than 8 million e-banking clients.
ICICI’s dominance of India’s retail banking market is one reason for its impressive financial results. In the year ended March 31 2005, total assets grew 34% to $38.4 billion, net income was up 22% at $460 million and return on equity was a solid 17.9%. ICICI’s cost-to-income ratio is just 42%, another indication of how well the bank is run given India’s propensity to administrative and frictional costs. Capital adequacy is a healthy 11.8%.
Although ICICI is retail heavy, it is also strong in treasury and corporate banking, with market leadership in foreign exchange, derivatives, commercial paper and currency options. In the 12 months under review, it launched India’s largest asset-backed securitization programme, a $370 million issue backed by auto loans, and India’s largest mortgage-backed securitization, a $270 million issue.
ICICI is continuing to expand internationally, with new office openings in Bangladesh, Bahrain and South Africa to add to its existing overseas locations in China, Singapore, UAE, UK and Canada.
Kotak Investment Banking is the runaway leader in Indian equities and Euromoney’s best equities house in India again. In a market that enjoyed record domestic equity issuance and a strong and consistent flow of international issues, Kotak took top spot in underwriting domestic equity issues, raising some $3 billion with a market share of some 64% as well as leading international equity issuance. Kotak was also the leader in aftermarket performance of its issues.
In the secondary market, both cash and derivatives, Kotak leads with market shares of 6.6% and 6.7% respectively. Its research teams cover 95 stocks.
Kotak has both an institutional and a retail focus, with 425 offices in 157 cities and towns in India and a leading online broking platform. Its prowess in distributing equity to both sectors is perhaps best demonstrated by the $1.2 billion IPO of National Thermal Power Corp, for which Kotak generated demand of $15.4 billion from 350 institutional accounts and 1.5 million retail customers.
Through its partnership with Goldman Sachs, Kotak enjoyed strong participation in the international market, including the $899 million IPO of Hutchison Telecommunications International.
Citigroup is India’s best debt house by virtue of its strong participation in all aspects of the local debt markets. In Indian G3 bond issues, Citigroup took the number two league table position, participating in the $400 million bond for State Bank of India and the $250 million bond for Export Import Bank of India, a 19.5% market share. In addition, Citigroup dominates the local currency loans market, having raised $725 million from 10 deals, a market share of 15.5%, as well as the burgeoning asset-backed securitization market. In addition to launching its own ABS deal, Citigroup launched successful ABS issues for HDFC ($176 million), Tata Motors ($36 million) and Indian Railway Finance Corp ($44 million).
Local investment banking partnership DSP Merrill Lynch wins the best M&A house in India award. DSPML advised on more bids by value than any other bank, a combined total of $2.7 billion from 20 deals. Most notable among these transactions were the $810 million acquisition of Ambuja Cement by Holcim, the $100 million acquisition by Scottish & Newcastle Breweries of a 38% stake in local brewer United Breweries, and the $383 million acquisition of 48% of Idea Cellular by Telekom Malaysia and Singapore Technolgies. DSPML acted as adviser on the buy side on all of these transactions. Its most notable sell-side advisory mandate was the acquisition by Flextronics of Hughes Software Systems.
