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Best domestic bank: DBS
It’s hard to compete against DBS, led by Piyush Gupta; the bank reported record earnings last year, with total income rising 4% to S$11.92 billion ($8.7 billion) while net profit, also up 4%, came in at S$4.39 billion. Of the income, Singapore accounted for S$7.79 billion, up 3.4%.
Admittedly, return on equity dipped by 0.4 percentage points to 9.7% last year, but DBS appears to have made up for that rapidly. For the first quarter of 2018, return on equity was 13.1%, the highest in a decade.
What is notable though is that growth at DBS has come from across various business divisions, rather than the firm being overly reliant on one or two businesses. Total income from consumer banking, for instance, rose by a hefty 9.2% last year to S$4.67 billion, while profits before tax from the division rose 10.3%.
Wealth management also did well, with the segment’s income rising 25% to S$2.1 billion in 2017. Assets under management got a 24% boost to S$206 billion, propelled in part by DBS’s acquisition of ANZ’s wealth management and retail businesses across the five markets of China, Singapore, Hong Kong, Taiwan and Indonesia.
DBS also managed to weather weakness in the oil and gas sector reasonably well, as reflected in the growth in its institutional banking operations. Total income rose a tiny 1.1% last year to S$5.28 billion, but within that part of the bank, SME income grew 11%, while income from corporates dropped 3% in 2017.
Then there is DBS’s cash management and open account trade businesses – both of which are on solid footing. Cash management income grew 32% last year, while the open account trade business delivered 14% revenue growth, much of which was attributed to 195 new client mandates, worth in excess of $9.2 billion. Even in a highly competitive market for investment banking mandates in Asia, DBS bagged key clients across both the equities and debt capital markets.
Best corporate and investment bank: Credit Suisse
Credit Suisse’s leadership of Singapore’s corporate and investment banking market makes it the clear winner of Asiamoney’s best corporate and investment bank award.
Be it in terms of deal numbers or volumes, share of wallet, diversity of product offerings or the calibre of clients in its roster, Credit Suisse stands apart. In the year to the end of May, the firm’s investment banking and capital markets (IBCM) division – with Singapore-based Asia Pacific co-head Edwin Low at the helm, working with Kuan Ern Tan, head of Singapore coverage IBCM APAC and deputy Singapore CEO – executed a total of 27 deals, the most among its international peers. This spanned 12 M&A transactions, six equity capital markets deals and nine debt capital markets trades.
Its share of wallet in Singapore among pure-play investment banks also pipped that of its rivals, showing that Credit Suisse is reaping the rewards of its strong franchise in the city-state.
And then there is the Swiss bank’s impressive client base. On the ECM side, it was one of two sponsors on gaming firm Razer’s $608 million IPO in Hong Kong, the first chunky listing in Hong Kong of a Singapore company.
It also worked on internet firm Sea’s $989 million New York listing, the first Singapore internet company to list in the US since 2000.
CS continued its work with property companies Oxley and the Keppel Group, while also helping Singapore sovereign wealth fund Temasek Holdings acquire a majority stake in Global Healthcare Exchange, a US firm known for its electronic trading exchange, electronic payment solution and supply chain solutions.
Away from real estate and technology names, Credit Suisse was also involved in a range of deals for financial institutions, running multiple dollar- and sterling-denominated bonds for Singaporean lender United Overseas Bank, as well as a sterling covered bond for Oversea-Chinese Banking Corp. The Swiss bank is also one of just a few international banks playing in the Singapore dollar bond market, leading fundraisings for the likes of Fragrance Group, ESR Reit and Olam during Asiamoney’s awards period.
The close collaboration of Credit Suisse’s investment banking team with its private banking arm has also gone from strength to strength, helping the firm further cement its relationships with numerous clients. Credit Suisse private bank was a cornerstone investor in Sasseur Reit’s S$396 million ($283 million) IPO in March, KBS US Reit’s $448 million listing in November 2017, and in HRnetGroup’s S$174 million float in June last year. It also anchored Razer’s Hong Kong listing.
Best international bank: Citi
Singaporeans see Citi, led by country chief executive Han Kwee Juan, as a local bank just as much as an international one, and the numbers tell you why.
Citi Singapore branch, which is the fully licensed bank comprising Citi’s institutional client group businesses, reported a 20% jump in net income to S$197 million ($145 million) at the end of December 2017. Citi Singapore Ltd, under which the firm runs its consumer banking operations, reported a 22% rise in net income to S$535 million, while Citicorp Investment Bank (Singapore), through which Citi books its investment banking and capital markets deals, had a 41% boost in net income to S$291 million.
Citi is one of the country’s go-to investment banks for clients. It worked on the $17.9 billion take-private deal of logistics company GLP – the largest M&A transaction ever in Singapore – while other key deals include the $1.1 billion privatization of Croesus Retail Trust, and the $1 billion merger of ESR-Reit and Viva Industrial Trust. It also worked with the likes of Mapletree Logistics Trust, Keppel-KBS, Sasseur Reit, Clifford Capital, BOC Aviation and sovereign fund Temasek Holdings.
Its global markets and securities services business has also outperformed, with Singapore being the bank’s key hub for its foreign exchange, commodities and fixed income offerings. For instance, its FX trade volumes last year were $2.2 trillion, with Citi trading over $30 billion in equities, up by 9% year on year.
That’s not all. Citi’s commercial banking operations and private banking operations are also impressive in the southeast Asian city-state. Last year, the former division reported a 10% rise in revenues versus 2016, while the latter’s revenues jumped 23%.
On the consumer banking front, Citi has focused on digital transformation, which led to a 50% growth in mobile banking users in 2017, and one third of new cards and loan volumes coming from online customers.
Best private bank: Credit Suisse
Credit Suisse’s private banking operation is flourishing in the city-state. In 2016, Credit Suisse’s Singapore private banking front team grew 60%, with five new teams set up to boost coverage of the growing ultra-high net-worth clientele.
That increased focus has given the private bank, whose market group head for Singapore is Young Jin Yee, a shot in the arm. When a bank can claim to be offering its services to 60% of the billionaires on the Forbes Singapore list, you know it is doing something right.
Young Jin Yee
The numbers tell the story. Credit Suisse private bank’s assets under management grew at a compound annual growth rate of 14% over the last five years, jumping 23% year on year as of the first quarter of 2018.
About a quarter of the asset growth has come from existing clients, with the remaining 75% from new customers – an impressive feat.
Net new assets jumped a whopping 124% year on year in the first quarter of 2018, with momentum largely steady also over the past four years with a 12% CAGR.
Bankers at the firm say the team in southeast Asia has successfully managed to combine the Swiss tradition of private banking, rooted in Credit Suisse’s DNA, with local Singapore knowledge to create a dominant franchise.
The bank’s private banking offerings span financing capabilities, alternative investment solutions across hedge funds, private equity and real estate, as well as wealth planning and family office services. Its close tie-up with the investment banking division also ensures that Credit Suisse’s private banking clients have an opportunity to look at equity and debt capital markets transactions for investments. To cater to those needs, Credit Suisse has a specialized private bank syndicate team in charge of distribution of ECM and DCM products.
Best digital bank: DBS
DBS’s digital prowess has been remarkable since it decided to focus on reinventing itself over the last three years. But the rewards it has reaped from that journey only became clear in November 2017, when DBS decided to quantify the financial benefits of digitalization.
According to the bank, a digital customer brings in twice the income, 1.5 times the deposits, twice the loan and 3.6 times the investment balances when compared with a traditional customer. A digital customer also costs 57% less on average to acquire, and is more engaged, with 16 times more self-initiated transactions.
What does all this mean? It means that DBS has shown that being truly digital involves a complete revamp of the bank’s infrastructure, from the front to the back end; that being digital is key to delivering simple, fast and contextual banking to customers; and that having a culture and mind-set inspired by startups allows a firm to learn by doing and by partnering with third parties.
By the end of last year, a chunky 85% of DBS’s technology, hardware, data centres, network management and app development, were sourced internally, demonstrating that revamp and change in mind-set.
Through its digital strategy, DBS has managed to deepen its wallet share of consumer and institutional customers in its main markets of Singapore and Hong Kong. In Singapore, this approach has propelled it to top positions in mortgages, auto loans, cards and bancassurance. The digital focus has helped bump up income from this segment from S$4.1 billion ($3 billion) in 2015 to S$5.22 billion today.
DBS offers its clients a plethora of products, including DBS PayLah!, a personal mobile wallet that boasts more than 785,000 users, DBS iWealth for its wealth management customers, and POSB Smart Buddy, the world’s first in-school wearable tech savings and payments programme.
Best bank for SMEs: OCBC
OCBC Bank is a repeat winner of this Asiamoney award. But it is a repeat winner for many reasons, not least of which is its continual efforts to improve its offerings to its small and medium-sized clients – efforts that have paid off many times over.
In January this year, OCBC, whose head of emerging business and commercial cash is Christie Chu, launched the Business Revolving Short-Term Loan – the first of its kind in Singapore catering to SMEs’ short-term working capital requirements. This serves as a combination of a flexible short-term loan and an overdraft facility. Thanks to this loan, businesses can draw, repay and redraw funds any number of times at their convenience, with interest only paid for the amount used. It has been a hit. Since the launch, OCBC has put in place S$15.6 million ($11.5 million) of loans. Disbursement grew by seven times during a three-month period.
It also claims to be Singapore’s only bank to offer the Business First Loan to SMEs as young as six months in a bid to help early-stage companies. It has a virtual account opening service available to its SME clients, due to which the bank has managed to cut its turnaround time for opening and processing applications by half, and seen its market share jump by 5%.
All its efforts are reflected in its financials. Pre-tax profits for the year to March rose by an astounding 163%, while return on equity rose to 11.8% from 9.6%. Total loans increased by 11%, deposits by 9%, while its SME customer base rose by 3%.
Like so many banks around the world, and specifically in Singapore, OCBC has realized the growing importance of fintech in banking and in catering to its SME customers. To that end, it has launched voice banking capabilities, through which clients can send money to other OCBC accounts, or make account balance enquiries.
It has also put in place the Emerging Enterprise Award, which targets SMEs that are less than 10 years old and have less than S$20 million in annual turnover. UOB and DBS are undoubtedly ramping up their SME-targeted efforts, and giving rivals a run for their money. But it is OCBC that has continued to capture the most opportunities among SMEs.
Best bank for CSR: DBS
DBS doesn’t just talk the talk when it comes to corporate social responsibility. Singapore’s largest bank also walks the walk. And since establishing a sustainability council and appointing a chief sustainability officer in 2017, that has become all the more evident.
The bank manages sustainability across four pillars: responsible banking, responsible corporate citizenship, creating social impact and being the employer of choice. With that in mind, DBS focuses on four of the 17 sustainable development goals – affordable and clean energy, decent work and economic growth, responsible consumption and production, and climate action.
After making its commitment towards addressing climate change public in January this year, DBS held its inaugural in-house climate week in March. It is also an active part of the BCA building retrofit energy efficiency financing scheme and the Economic Development Board’s energy efficiency financing pilot programme, which help SMEs offset the high upfront costs associated with energy efficiency improvement works. As of the end of 2017, DBS’s outstanding loans under these schemes amounted to S$3.67 million ($2.7 million), supporting retrofits that resulted in a reduction of over 6,000 megawatt hours of energy consumption.
In September 2017, DBS became the first Asian bank and Singapore company to join the global renewable energy initiative, RE100. It has given itself a target to power 100% of its operations in Singapore using renewable energy by 2030. In 2017, it reduced carbon dioxide emissions by 4,118 tonnes and achieved cost savings of S$3.8 million.
Away from its climate focus, DBS has also shown its environmental, social and governance credentials in the capital markets. In July 2017, it brought to the market the world’s first listed social sustainability bond, called the Women’s Livelihood Bond, which provides loans to social enterprises and microfinance institutions that impact the livelihoods of more than 385,000 women in Cambodia, the Philippines and Vietnam. In the same month, DBS became Asean’s first bank to issue a green bond.
In March this year, it was one of the arrangers of Singapore agribusiness Olam International’s $500 million sustainability-linked club loan, the first of its kind in Asia.
Its support for social enterprises is also notable, thanks to the DBS Foundation that was established in February 2014. Last year, the foundation reached more than 4,800 social enterprises through local forums and workshops.
Its own employees are also not forgotten, especially at a time of digital revolution. In August 2017, DBS committed to invest S$20 million over five years to improve the skills of its employees, enabling them to thrive in the digital economy.