Best domestic bank: Hang Seng Bank
Hang Seng Bank is in no doubt what it is here for and who it serves – no small fact in an age when many lenders struggle for a sense of identity and direction.
Its parent HSBC Holdings is the big global name, but Hang Seng Bank, led by chief executive Louisa Cheang, is Hong Kong’s bank, and its 10,000-plus full-time employees serve at least half of the city’s adult residents through more than 270 branches. Loved by customers and respected by peers, it is integral to what makes Hong Kong what it is, a city crammed with world-class manufacturing and service firms, many based over the border.
Net interest income at its commercial banking division, which supports an army of innovative small and medium-sized enterprises, rose 15% in 2017 to $900 million, with operating profit up 18%. Its mainland operations now include 50 branches, mostly in the Pearl River Delta and Shanghai, a fund management joint venture and a securities investment advisory outfit.
Its market capitalization hit $48 billion in May 2018, buoyed by a share price flirting with the HK$200 ($25) mark and ensuring a place on the list of the world’s 50 largest lenders. Its finances are in great shape; it reported record operating profit in 2017 of HK$23.5 billion, up 24% year on year, and net interest income of HK$24.6 billion. Its wealth management business continues to grow, with income jumping 33% in 2017, to HK$8.8 billion.
It is also one of the most stable banks around, solid and generous to shareholders. Hang Seng Bank boasted a tier-1 capital ratio of 17.7% at the end of 2017, and a return on equity and assets of 14.2% (against 12.6% a year ago) and 1.4% (up from 1.2%), respectively.
Best corporate and investment bank: Bank of China International
Bank of China, the most international of Beijing’s big-four state lenders, put down an important marker in 1998 when it founded BOC International. While wholly owned by its parent, the outfit was based in Hong Kong and international in nature and focus.
It assembled an award-winning research team and hired investment bankers with plenty of moxie. Where BOC International continues to excel is in its ability to secure valued and valuable roles on chunky Hong Kong stock offerings by leading mainland firms.
It was a bookrunner on China Literature’s heavily oversubscribed $1.1 billion initial stock sale in November 2017 – a deal that helped to put the bank in the top 10 for Asia ex-Japan investment banking fee revenues last year. The IPO proved so hot that shares in the e-book unit of digital giant Tencent rocketed 82% on the first day of trading.
Its M&A division is increasingly influential in Hong Kong and mainland China and is set to become a global force as it leverages to the full its international network of 55 subsidiaries and partnerships with financial institutions.
This is a financial institution that always sees the big picture. In 2017, it signed an agreement with CME Group to expand the international use of China’s currency, the renminbi. And in January 2018, it inked a strategic alliance with Jefferies to provide investment banking advisory and capital markets services to customers globally.
Best digital bank: Bank of East Asia
Excellence in digital banking is not easy. Many lenders struggle to adapt to an era where everyone is online, but where some customers still covet the personal touch.
Bank of East Asia, set to turn 100 years old next year, has pondered this quandary long and hard. Its solution has been to bring in new technology in stages, ensuring that it is with its clientele every step of the way.
|Adrian Li, |
Bank of East Asia
An inaugural digital pop-up branch a few years ago, installed in the landmark IFC building, was “so much favoured by customers,” says deputy chief executive Adrian Li, that BEA decided to overhaul its entire branch network.
Existing branches are gutted and rebuilt over a long weekend, emerging to resemble high-end retail stores. The tellers remain during normal opening hours, but the number in each branch is cut to three from seven or more. New ‘i-Counter’ screens offer direct communication with staff located in Kwun Tong, from 9am to 8pm Monday to Sunday.
Trained personnel help customers browse products, download forms and apply digitally for loans and credit cards, using technology developed in-house, says head of personal banking Vincent Hui.
Bank of East Asia’s investment in digital has helped to prune its physical network to 70 branches, from 88, though some new branches are opening in malls and train stations, where Hong Kongers spend a large portion of their lives.
This has bolstered BEA’s bottom line, with the bank attracting wealthier customers, who invest and deposit more with the lender. And BEA continues to innovate, launching a popular and ever-evolving mobile app, and rolling out a secure integrated platform, the ‘i-Planner’, which caters to customers’ financial and lifestyle needs.
Best bank for CSR: Bank of China (Hong Kong)
Bank of China (Hong Kong) is one of just three commercial lenders allowed to issue bank notes denominated in Hong Kong dollars. Since its consolidation as a single entity in 2001, it has become a mainstay of the local financial system. It’s current vice-chair and chief executive is Yingxin Gao.
|Yingxin Gao, Bank|
of China (Hong Kong)
A pioneer in blockchain, it is innovative and bold and big, with more than 200 branches dotted around the city. But it has also become one of the best banks in Asia – maybe one of the best anywhere – in the field of corporate social responsibility.
A member of the Hang Seng Corporate Sustainability Index for eight straight years, its charitable foundation donated HK$200 million ($25 million) in 2017 to 28 projects ranging from youth development and education to environmental protection and poverty alleviation.
The bank’s ability to blend technology with its CSR commitments shines through when it uses fintech to provide access to high-quality banking services to residents from poorer and more remote regions. The roll out last year of its BOC Caring ATM Card, which waives minimum monthly balance fees and ATM card charges for local dollar savings accounts, was designed expressly to help the underprivileged and the elderly.
And Bank of China (Hong Kong)’s Environmental Leadership Awards, with its aim of encouraging manufacturers and services firms from Hong Kong and the Pearl River Delta region to cut waste and tackle pollution, has become a big hit since its launch in 2015. Last year, as part of its award process, 600 companies completed 1,388 green projects, eliminating four million tonnes of waste and recycling 460,000 tonnes of materials.
Best bank for SMEs: DBS
Piyush Gupta has transformed Singapore’s DBS Group since his arrival as chief executive in 2009. Its regional wealth management business has flourished, while a hefty investment in technology has paid off handsomely. The lender has also become a regional leader in small and medium-sized enterprise banking, providing world-class financial services to firms ranging from sole proprietors to medium-sized firms with annual revenues of up to S$200 million ($150 million).
Hong Kong is a market awash with highly investable smaller enterprises and well-run SME-focused lenders, yet DBS, by investing well and wisely, has emerged at the head of the pack. It reported a 17% rise in SME banking revenues in Hong Kong in 2017, while welcoming 12,400 new SMEs into its fold, taking its total to 75,300, or nearly a quarter of all Hong Kong enterprises.
Many of those brought on board last year were acquired thanks to its burgeoning digital channels, highlighting the importance of its long-standing dedication to technology. DBS Hong Kong’s seven SME-dedicated branches and 24 retail outlets provide smaller firms with a one-stop shop for everything from commercial insurance and express account opening to trade bills and remittance instructions.
DBS’s ability to take the long view is apparent, not least when it comes to its willingness to hold events that increase contact with its customer base and help clients interact with and learn lessons from a fast-changing world. A case in point is the bank’s quarterly ‘Industry disrupt events’, which help SMEs adapt to and benefit from the latest emerging technologies and market developments: clever ideas from a clever bank.
Best international bank: Citi
It’s easy to forget how long Citi has been in Asia and how deep its roots go. Its direct forerunner, The National City Bank of New York, opened its inaugural Hong Kong office in 1902.
|Angel Ng, Citi|
An important client in its early years was the Fung family, co-founders of Li & Fung, now a global logistics giant. In 2017, Citi led a $1.1 billion divestment of three of the firm’s divisions, to a consortium comprising Fung Group and Beijing-based Hony Capital.
Another core customer, CK Hutchison, has been busy over the last year as well, leaning on the US banking group’s advice and capital reserves to issue a $2.2 billion bond.
Elsewhere, a 200-plus team of dedicated professionals, led by Christopher Laskowski, head of Hong Kong corporate and investment banking, and Weber Lo, country officer and chief executive, Hong Kong and Macau, have helped mainland property group Evergrande complete a $2.3 billion convertible bond, the largest Asia ex-Japan issuance since 2001. They also completed a slew of big IPOs, including two in November 2017, when car retailer Yixin Group raised $868 million and garment maker Crystal International raised $512 million. A $670 million issue by fixed-line telecoms operator WTT HK, also in November, marked the largest-ever bond market debut by a Hong Kong-based high-yield corporate. Over the 12 months to the end of March 2018, Citi ranked second in debt capital markets bookrunning, third in equity and equity-linked sales, and fifth in M&A.
Its chief executive is Angel Ng.
Much has changed over the last century, but Citi’s importance to Hong Kong, and Hong Kong’s importance to Citi has not.
Best private bank: Credit Suisse
When a financial institution can claim to provide private banking services to more than half of the billionaires on the Forbes Hong Kong rich list, you know it is doing well.
Credit Suisse, a name synonymous with excellence in private banking, has had a representative office here since 1969, converting to a full banking licence 11 years later. Since then, it has been a consistent pioneer in high-end wealth management, scooping regular honours including Euromoney’s award for Asia’s best bank for wealth management in 2017. Francois Monnet is the current head of private banking Greater China.
Also last year, it launched Credit Suisse Invest, the first of its kind in Asia, a “human-led, digitally enabled” advisory service that offers bespoke wealth management services to high net-worth and ultra-high net-worth clients. The service is available only at the bank’s two regional booking centres, one of which is in Hong Kong, underlining how vital the city is to the Swiss outfit.
The bank continues to find new ways to make itself valuable and relevant to clients in Hong Kong and across Asia. In 2017, it formed a single Wealth Planning Services team that offers one-stop financial advice for issues relating to everything from trust and estate advisory to family office services and philanthropy.