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Best domestic bank
|Ok-Dong Jin, Shinhan Bank|
Best corporate and investment bank
KB Financial Group
KB Financial Group is not only one of the biggest investment banks in Korea, it is also the top player across the board. It ranks fourth among domestic investment banks, according to Dealogic, with a market share of 4%.
It is a leader in debt capital markets, and ranks first among both international and domestic banks in debt capital markets with a deal volume of more than $12.3 billion, or a 12% market share. It is fourth in the equity capital markets, with deal volume of $255 million and a 4% market share.
In 2018, KB Financial Group reported a net profit of W3.1 trillion ($2.6 billion) and total assets of W480 trillion. KB Securities was a standout part of the business with total assets of W45 trillion, up 20.6% year on year.
Not satisfied with being a key player in the Korean investment banking market, the company is looking overseas as well, and established a local subsidiary in Vietnam in 2018.
KB Financial’s corporate and investment banking business is helped by the strength of its subsidiaries, particularly its securities arm and KB Kookmin Bank. The company noted in its 2018 annual report that it is consciously identifying deals by joining business models and breaking down walls between the two companies. The group says that such cooperation generated W78.3 billion in CIB revenue in 2018.
Its efforts have not gone unnoticed. The Financial Supervisory Service, Korea’s regulator, has awarded KB Securities a customer satisfaction award 12 years in a row.
Kookmin Bank has been a consistent presence in the capital markets as well. The bank is a leader in offshore sustainability bond sales, going so far as to raise sustainability labelled dollars in a bank capital transaction in January 2019, and another in June. Such fund-raising will serve the bank well as it provides an example to its own clients of the benefits of green debt deals, and it gives the bank more green and sustainable money to put to work through loans to Korean companies, particularly the SMEs on which KB Financial likes to focus.
Best international Bank
|Jin-hei Park, Citibank Korea|
Best digital bank
|Daniel Yun and Yan Lee, kakaobank|
Best bank for SMEs
KB Financial Group
The last year has been an interesting one for small and medium-sized enterprises in South Korea. According to the government, SMEs account for 99% of the country’s businesses, 88% of its total employment, 38% of exports and 51% of added value. In 2018, South Korea’s Financial Services Commission announced that new rules governing loan-to-deposit ratios would go into effect at the start of 2020 for the country’s banks, encouraging more lending to small businesses. With such support, SME banking has boomed.
KB Financial Group has led the way in SME lending growth. The bank’s SME loans increased by W8.9 trillion ($7.5 billion), or 10% year on year – a higher growth rate than its peers. KB Financial also made efforts to improve its loan quality control. At the end of 2018, 74.7% of the bank’s loans were given to healthy SMEs, as opposed to 70.8% the previous year.
KB Financial has also eased the paths of doing business for its SME clients. KB Star CMS, launched in June 2018, gives corporate customers access to their funds deposited at other banks. KB OneTrade, an online trade platform for automatically processing export and import documents, and KB Seller Loan, a fast-loan product for small online shop owners, were launched in the following months.
The bank now also offers a foreign money transfer service as well, an area it has tried to market to more SMEs this year.
These initiatives accompany KB Financial’s digitalization and its efforts to streamline its business activities. The bank is ambitious about its plans to use digital approaches, including apps, to give customized services to SMEs and small business owners.
With the government prioritizing SME funding, the sector is of great importance. KB Financial is well-positioned to serve these clients, and boost its own business in the process.
Best bank for CSR
As Korea’s top domestic bank, Shinhan is in a position to lead the way for corporate social responsibility in the country. And the bank has done just that, under its motto of ‘Compassionate finance’.
Since becoming the first South Korean financial player to publish a CSR report in 2005, Shinhan has shown itself to be something of a ground-breaker.
The bank has since expanded its CSR initiatives, establishing a committee in 2015 and has been included in the Dow Jones Sustainability Index World since 2013. In 2018, it ranked first in the South Korean banking industry.
Shinhan made a bold statement by establishing an environmental- and social-risk management system in 2018, which establishes best practice by considering 12 risk industries, including forestry, mining and oil refining.
Shinhan’s efforts extend to its own fundraising. The bank sold Asia’s first dollar-denominated UN Sustainable Development Goals-linked bond in April. It went on to sell a sustainability labelled bank capital note in July, a rarity in the global market. And in October, Shinhan sold a green bond as its first euro-denominated deal.
The money raised will be put to good use: Shinhan stated in its 2018 annual report that it planned to invest W20 trillion ($16.8 billion) in green industries by 2030. The bank also said that it would reduce its greenhouse gas emissions by 20% in the same time frame.
On top of this environmental action, Shinhan has also been a vocal advocate for the social and governance parts of ESG. For instance, it has spent the last couple of years increasing female leadership at the bank, with dedicated programmes and a medium-term roadmap, such as its ‘Shinhan SHeros’ initiative that provides mentoring and leadership training for female employees.