Best domestic bank
Siam Commercial Bank
Siam Commercial Bank (SCB) and Kasikornbank (KBank) put up a spirited fight for the spoils, with both showing impressive gains. KBank, which has focused on boosting its loan portfolio, posted strong first-quarter results thanks to major inroads into the small- and medium-sized enterprise (SME) sector, higher investment income and accelerated lending.
But it is SCB that continues to impress analysts most with its improved profitability, continued leadership in the fast-growing consumer banking sector and aggressive market share growth across all segments. SCB now operates the largest number of branches and ATMs in Thailand. During 2006, it also dominated key retail product areas such as mortgage loans, credit cards and bank assurance.
In a year which saw the bank celebrate its 100th anniversary and bank chairman Vichit Suraphongchai win an award for leadership, SCB increased its operating profit by 20.5% to Bt25.4 billion (US$779 million). The bank's total loan portfolio surged 22.2%. Even the stepping down of veteran SCB president Jada Wattanasiritham in favour of little-known Kannikar Chalitaporn did nothing to dampen investor enthusiasm. "Kannikar's expertise in marketing is one of the major reasons behind SCB's current success in consumer banking," says one local fund manger. "We expect her to squeeze more value out of other core operating businesses."
Best domestic equity house
It's been a year of slim pickings for Thailand's domestic equity houses, squeezed by pitifully low stock market trading volumes, a dearth of privatisation issues and a small number of IPOs. Phatra Securities still performed despite political uncertainties and a slowing economy.
The securities house managed the two largest IPOs of the year – Thai Beverage's US$979.1 million issue and Rayong Refinery's US$690.8 million listing. The two transactions accounted for 57.1% of total equity offerings out of Thailand between May 2006 and April 2007. That Phatra was able to push ahead with the issues in the face of a strong regional market downturn and unfavourable sentiment towards Thailand is testament to the firm's strong advisory capabilities and the depth of its management team. Phatra also acted as lead manager for the US$41.1 million private placement of Central Pattana Public Co. and as co-manager of the US$88.5 million private placement of True Corp.
Although Phatra cannot match Kim Eng Securities in terms of trading volumes in the secondary market, the firm has seen its market share rise from 5.67% in the 2005/2006 period to 6.93% in April 2007. To top this off, Phatra research group won three out of the five best analyst awards from Thailand's Securities Analysts Association.
Best domestic debt house
The imposition of draconian currency controls, together with weak foreign investor confidence, made for a turbulent 2007 for Thailand's domestic bond houses. Following the 30% reserve rule on capital inflows introduced on December 18, 2006, volumes and new issues in the domestic bond market virtually dried up. However, the prospects of further cuts in interest rates and a spate of high-grade issues breathed some life into the market.
Phatra Securities won praise when it advised Krung Thai Bank on the issuance of the US$220 million hybrid tier-one security. Although the initial offering was retracted following the military coup, which sent the Thai market reeling, the deal was re-priced less than a month later and its size increased from the original US$200 million.
In recognition of its debt capital market issuance, however, the award goes to Kasikornbank (KBank). Not only did it rank number one domestically in the volume of domestic bond issues for which it was bookrunner, but according to Dealogic it also had the highest transaction value at US$613 million, representing an 18.1% market share. KBank acted as joint-bookrunner for the US$464 million corporate bond issue for Siam Cement in April and the US$319 million issue for state-owned energy giant PTT last October.
Article as appeared in Asiamoney's June 2007 edition.