Best domestic bank: E.Sun
There are bigger banks in Taiwan, but none better right now than E.Sun.
From its first day as a new lender in 1992, the Taipei-based outfit was designed to be different. It was owned not by the state or by a single, powerful domestic family, but by a bevy of foreign institutions: combined, the likes of Morgan Stanley, China’s ICBC and electronics maker Foxconn own 45%.
It notched a triple milestone in 2017, passing NT$2 trillion ($67 billion) in assets – up 20-fold over the last 14 years – a NT$200 billion market cap and NT$100 billion in capital. It was the largest domestic underwriter of formosa bonds in 2017, and posted the highest returns on equity and assets of any of its peers.
Wherever you look, you see records broken or new standards set.
A digital pioneer and a long-time leader in corporate social responsibility, it was also the biggest recipient of foreign currency deposits last year and a leading provider, among private banks, of loans to small and medium-sized enterprises. It is one of the top three issuers of credit cards, with 12% of the market, and was ranked in the top three in 2017 in both fee income and credit card fee income.
E.Sun never seems to flag in its desire to be “the biggest bank in Taiwan and the best bank in Taiwan, the favourite bank of not just our employees but the whole of society”, in the words of Joseph Huang, president and chief executive of the bank since July 2008.
As its customer base and loan book grow, it continues to expand its network, at home and abroad. It has 138 domestic branches, and offices in 25 locations in nine countries, including China, Australia and Vietnam. In 2017, it became the first Taiwan lender to open a representative office in Myanmar.
It’s impressive, but for E.Sun, this is just the start.
Best corporate and investment bank: Yuanta Securities
When it comes to corporate and investment banking in Taiwan, Yuanta Securities remains the institution to beat. It ranked top in debt capital markets volumes in the 12 months to the end of March, completing 40 deals worth $2.3 billion, for a 14.5% share of the market, according to data from Dealogic.
In equity capital markets, it ranked third, completing 22 deals worth $620 million for an 8% overall share, highly creditable positions in a highly competitive industry. Important deals include two follow-on stock sales by leading chip makers, with Chunghwa Precision finalizing a $65 million sale in September 2017, and Winbond Electronics completing its $291 million secondary offering a month later. And this is before the smaller sales that constantly pepper the market.
Yuanta reckons that of the 165 equity or equity-linked sales completed in Taiwan in the year to the end of March, it participated in 36, worth a combined NT$11.9 billion ($400 million).
The institution is also pushing harder into M&A as Taiwan’s larger companies enter new markets and consolidate at home. In May 2017, it advised local broking outfit Ta Chong Securities during its merger with local rival Taishin Securities. Under its cheery but resolute chief executive, Arthur Chen, Yuanta has remained a leader in its field, constantly competitive in years both good and bad, and a dominant force in the securities sector for nearly 60 years.
“We are changing all the time,” Chen says. “We’re number one in broking, in investment banking, and we regularly top the tables in ECM and DCM. The key for us is how to remain number one but to become even better.” He will surely find a way.
Best international bank: Citi
Citi is the clear winner of the award as best international bank, a lender that, unlike some others, has never wavered in its commitment to the island’s economy.
Peers respect its lasting presence and its ability to reliably generate income, year after year.
|Paulus Mok, Citi|
Citi is the largest foreign bank in terms of headcount (its 4,000-plus employees operate across 54 branches, serving corporate and retail customers) and profits, generating earnings before tax in 2017 of $419 million. Its returns on equity and assets were 12.49% and 1.54% respectively last year, against industry averages of 9.06% and 0.63%.
Its role as a provider of capital and advice to Taiwan’s global firms is never in doubt. It helped blue-chip domestic clients raise more than $5 billion from local and international capital markets in the 12 months to the end of March 2018. It was a lead underwriter on several large capital markets transactions over the last year, including a $500 million currency-linked convertible bond by Hon Hai, and a $469 million follow-on offering by GlobalWafers.
Paulus Mok, chairman and country officer, also points to the bank’s strength in the formosa bond market, with Citi helping to complete seven deals in the year to the end of March, raising $1.6 billion.
And there is Citi’s strength in depth to consider. A full-service lender offering world-class corporate and retail banking solutions, it is a leading player in everything from wealth management and credit cards to digital banking.
Citi sets the bar high in Taiwan – and challenges others to compete. Currently, no one can.
Best private bank: CTBC Bank
CTBC Bank has long been a leader in private banking in Taiwan.
The island’s wealth management industry is huge and growing, and serves a population that is both rich and ageing: Capgemini put Taiwan’s high net-worth population at 142,400 at the end of 2016, with a combined fortune of $464 billion. That marked a year-on-year rise of 11.9%, with total HNW wealth up 12.4%, faster than any Asian economy bar Thailand and Indonesia.
CTBC, more than any domestic bank, has invested consistently and heavily in its private banking platform. Its 950 specialist advisers are divided into four levels of customer service, each focusing on financial or insurance planning, investment advice and intelligence, helping HNWs to manage their assets, both onshore and offshore, with efficiency, flexibility and transparency.
CTBC’s success is due in large part to its ability to help wealthy clients and their families plan for the long term, by educating them at every opportunity. That helps to explain why its Family Membership programme, which is tailored to the exacting needs of HNWs and UNHWs, added more than 3,000 family members with combined assets of NT$8.2 billion ($275 million) in 2017 and lifted assets under management by 10.7%.
CTBC also holds regular tax and trust forums, which tailor financial advice to next-generation family members, helping to plan their education and their careers, to live in the here-and-now, and to invest for the long haul.
Best digital bank: E.Sun
When asked to identify a key long-term priority, E.Sun president and chief executive Joseph Huang points to the importance of the lender’s digital solutions. Every bank is big on digital these days, but some take it more seriously than others.
For E.Sun, digital innovation is something akin to a religion. It is by far the best-in-class provider on the island. Analysts and peers are full of praise, with one describing it as “head and shoulders above the rest”.
In hiring Chen Sheng-wei, former chief executive of Taiwan’s first Artificial Intelligence (AI) academy, in January, E.Sun became the first onshore lender to employ a dedicated chief technology officer, overseeing more than 70 in-house data analysts.
It takes big data and blockchain seriously and has fully digitally enabled every one of its 138 domestic branches, while its automated online lending platform covers everything from personal loans and mortgages to micro, small and medium-sized enterprise loans.
Its digital services regularly snap up awards. In October 2017, Gartner named E.Sun’s intelligent loan platform the most innovative digital cost-saving initiative in Asia, while its AI chatbot was a finalist in the award for best digital product. Huang reckons the chatbot, which uses AI to communicate with customers on Facebook Messenger about financial services, reached more than 100 million people in 2017.
And E.Sun won’t stop there. Already the top digital foreign exchange platform, it processed more than 2.6 million transactions in Taiwan with a total value of NT$60 billion ($2 billion), and boasts an 85% market share in cross-border digital payments, using the likes of Alipay and WeChat Pay. The ultimate goal is to ensure E.Sun delivers “the right product, to the right people, through the right way, at the right time,” the bank says.
Best bank for SMEs: Taiwan Business Bank
Taiwan Business Bank has never wavered from its original remit: providing invaluable financial services to small and medium-sized enterprises.
The Taipei-based lender does the regular stuff well, lending to mid-sized local firms as they expand regionally and globally, providing letters of credit, foreign exchange services, and cash management services.
Taiwan Business Bank
“We assist SMEs when they expand into international markets – and we want our customers to know that we are an SME-focused bank with a special mission,” rather than just another one of the island’s many medium-sized lenders, chairman Bor-Yi Huang tells Asiamoney.
This is an unusual lender in other ways. It’s a policy bank – Taiwan has eight in total – with the mind of a private lender and a vital source of funding to the island’s army of SMEs.
At the end of 2017, it had 124 domestic branches, along with a physical presence in the likes of Cambodia and China.
Huang says the bank has bought in to the government’s ‘New Southbound Policy’, which aims to strengthen financial and commercial links with 18 nations in Australasia, south and southeast Asia. Its resources are committed to helping SMEs expand into those markets, says Huang.
The lender is also investing heavily in its digital platform, increasing its fintech budget by 160% in 2017, to $34 million – another sign of how seriously this lender takes itself, and how seriously it deserves to be taken.
Best bank for CSR: Cathay United Bank
Cathay United Bank was the first lender to adopt the Equator Principles, back in 2015, and it continues to promote them, encouraging customers and peers to follow suit.
|Alan Lee, Cathay|
It is the island’s leading financer of solar power, and since 2011 it has provided loans to more than 1,000 projects that serve more than 1.6 million households. In 2016, it completed Taiwan’s first offshore wind power project, which generates 28 megawatts of power, supplies up to 920,000 households, and reduces annual carbon dioxide emissions by around 15,000 metric tonnes.
It has adjusted its lending risk frameworks to ensure that customers adhere to sustainable social and environmental standards. Under chief executive Alan Lee, Cathay United Bank is also a vocal supporter of the government’s ‘2025.20 nuclear-free homeland project’, which aims to make the island free of nuclear energy by 2025, and to boost the contribution of renewable to the overall energy mix to at least 20%.
The bank’s five-stage Green Finance Driver Programme is a statement of intent that would be impressive for any lender. It starts with the aim of creating a sustainable future based on green finance, proceeds through the need to fund projects, and, the bank says, to shatter the stereotype that says traditional banks cannot make our world better. They can – and Cathay United Bank is living proof of this.