|Best domestic bank: Maybank|
Best Corporate and Investment Bank: JPMorgan
Best International Bank: UOB
Best Bank for SMEs: Public Bank
Best Bank for CSR: HSBC
Best Digital Bank: CIMB
Best Private Bank: Credit Suisse
Best domestic bank: Maybank
Maybank chief executive Abdul Farid Alias is enjoying good times. The bank that he has run for four years is purring along, which is more than can be said for much of Malaysia, still reeling from 1MBD hangovers and political tension. Under the low-profile Farid’s careful aegis, Maybank is now the country’s biggest bank by some distance. Its closest rival CIMB is well back.
Boasting around $170 billion in assets, Maybank has also become Malaysia’s regional champion, the fourth biggest bank by assets in Asean after Singaporean banks DBS, OCBC and UOB, which Farid benchmarks his bank against. In January Farid flagged the possibility of an earnings contraction this year, but he stunned the market in June with profits for the first half up a handsome 30% on last year.
There was another milestone in June for Farid, as Maybank became the first ever Malaysian company to top RM100 billion ($24 billion) in market capitalization and its share price has jumped 25% this year. With loan growth up by 6% since Farid took a knife to NPLs last year, the rest of the year looks like being bumper for Farid and his Maybank team.
Best corporate and investment bank: JPMorgan
JPMorgan’s long-time boss in Kuala Lumpur, Steve Clayton, likes to say: ‘Don’t look at the length of the list, look at the size of the wallet.” Clayton and his team may not have done the most deals in KL this year — take a bow Credit Suisse — but they can claim to have done the biggest and the more interesting.
In July, they got a $133 million placement of CIMB stock away for the Malaysian sovereign Khazanah Nasional, a $500 million placement of emerging tech group Edotco, and then they did the biggest IPO of the year in listing the $900 million Lotte Chemical float in July.
Clayton and his colleagues lead managed a $1 billion bond for gaming company Genting, a $1.1 billion bond for CIMB and advising state plantation owners Felda on a $500 million acquisition and, as the year closed, on the big banking merger of RHB and AmBank to create Malaysia’s fourth biggest bank.
Importantly, there was nothing from the 1MDB fund in the picture, JPMorgan being one of the rare outfits in KL to dodge that particularly toxic government bullet.
Best international bank: UOB
If imitation is the sincerest form of flattery, then the Wee family’s Singapore-based United Overseas Bank should feel suitably complimented. Singaporean banks like UOB are the regional industry standard that big Malaysian banks, such as Maybank, say they benchmark against for product range, service and prudential management.
UOB has brought those Singapore standards to Malaysian customers, and has become the Malaysia’s biggest locally incorporated foreign bank in asset size and branch network in the process. UOB Malaysia now boasts assets closing in on RM120 billion ($28 billion), which helped it generate profits of RM291 million for the first quarter this year.
Though a late entrant to Islamic banking in KL — it opened its Shariah bank only a year ago — UOB Malaysia is also building up its Islamic banking footprint, and expects to add around RM4 billion ($1 billion) in Shariah deposits up to 2020, partly by trading off the goodwill of its existing bank in Malaysia.
Best bank for SMEs: Public Bank
Public Bank has SME banking in its corporate DNA, a culture stemming from its roots servicing many of the country’s ethnic Chinese shopkeepers and stallholders. So, it is unsurprising that SME lending by Public Bank grew by a healthy 11.4% to RM71 billion in 2016, its 50th anniversary year, much as it has done for many of those previous 49. That represents 24.3% of the bank’s total lending portfolio.
Those loans seem to be are sound, thanks to the bank’s famously-tight internal controls. Malaysia’s third largest bank by assets, after Maybank and CMB, Public Bank boasts that its bad loan ratio sustained of just 0.5% is the lowest of all Malaysian banks.
Which helps explain why Public Bank Group’s net return on equity, of 16.5% in 2016, is the highest among its local peer banks, and why it trades at 2.3 times book, making it one of the most expensive financial institutions in the country.
But change is afoot at Public Bank, with octogenarian founder-chairman Teh Hong Piow set to retire in early 2019. Teh owns 24% of Public Bank, which might make a juicy stake for a mainland Chinese bank with deep pockets to step up.
Best bank for CSR: HSBC
Mukhtar Hussain’s HSBC Malaysia could well qualify for a corporate social responsibility award — with the emphasis on responsibility — because of its prudence in avoiding having anything to do with 1MDB. The toxic state development fund has so poisoned the Malaysian market, as Asiamoney explains elsewhere in this edition.
More conventionally, HSBC Malaysia has been a big proponent of water conservation and quality, particularly in the country’s most populated catchment area, the Klang Valley surrounding Kuala Lumpur. It has partnered with Earthwatch and GEC to train employees to be so-called Citizen Science Leaders to raise water awareness concerns in the area.
GEC is also HSBC’s partner in a programme to help Malaysia’s plantation companies better manage and sustain the existing peat swamp forest habitats, a big deal in a country where industry has found that money does grow on trees in a land blanketed with palm oil.
The programme also aims to help alleviate the annual haze pollution from plantation burns that smothers the region.
The bank has also dedicated resources to KL’s homeless through its Pertiwi soup kitchen project, providing hygienic utensils, food and medicines for the destitute who gather in downtown KL.
Best digital bank: CIMB
Kanags Surendran, CIMB’s head of digital banking and self-described ‘passionate fintech geek’, likes to point out that more than 90% of CIMB customers’ transactions are now done via the bank’s digital and self-service channels. CIMB’s digital users grew by 25% in the last year, and mobile users grew by 45%.
Surendran has done deals with Alibaba to develop Alipay mobile payment services in Malaysia, while rolling out the well-received CIMB EVA, an app that allows customers to have live-chats with bank staff as they conduct transactions.
There is more to come if a recent senior personnel move is a guide, as CIMB has hired Olivier Crespin from DBS Singapore to head its new fintech unit. The Frenchman spearheaded DBS’s well-regarded digital banking thrust from 2014 onwards.
Best private bank: Credit Suisse
Credit Suisse reckons Malaysian wealth is generally ’under-appreciated’ by its peers, though the bank clearly believes it is the exception to that apparent maxim.
Indeed, it has proved adept at identifying Malaysia’s ultra-high net-worth individuals in the face of renewed local competition from Singapore’s DBS, which has been on an acquisition spree in the region, and from Deutsche Bank and UBS, its traditional foreign-owned competitors.
As regulators tighten rules and practices in the sector, in part a response to the 1MDB scandal, CS says it continues to grow its client base, who are lured by the bank’s healthy compound annual return of 10% since 2011. It has also been adding Shariah-compliant products to its services, as that segments continues to grow in KL.