Asiamoney Best Domestic Bank Awards

The region’s leading banks, equity brokers and debt houses possess a combination of clear strategy, strong market appeal and good leadership, which has helped see them through a sometimes turbulent year. Asiamoney reveals the standout institutions across the region.

  • 05 Aug 2014
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AUSTRALIA

BEST DOMESTIC BANK

ANZ

ANZ's Asia revenues will eventually equal those of its Australia or New Zealand businesses, according to ANZ's chief executive officer Mike Smith in Asiamoney's 25th anniversary edition in May. Smith doesn't put a firm timeframe on that prediction, although if he were to do an acquisition he thinks it could happen within 10 or 15 years.

Whatever the timetable, the scope of the ambition is what has driven ANZ's strategy in the region and is what sets it apart from its domestic competitors. Others certainly look at Asia — analysts at Moody's note that Commercial Bank of Australia, National Australia Bank and Westpac Banking Corp. have all engaged in targeted investments in China, with CBA also active in Indonesia. But only ANZ has a broader strategy of taking a diverse spread of business to Asia as a whole.

It's not the biggest bank in its own country: CBA and NAB trumped its total assets of A$738bn ($690.8bn) as of the end of Australia's financial first half ending March 2014, although ANZ was second only to NAB in terms of risk-weighted assets, with A$361bn. Its profit growth of 9% was the second biggest for that period, and in absolute terms profits still lagged those at CBA and Westpac. It's no minnow, though — and its New Zealand business is about double the average size of its competitors.

But analysts like the diversity of its business mix and its unique positioning that is designed to allow it to take advantage of Asian growth. Moody's notes that this strategy exposes the bank to risk: some 13% of its gross loan exposure is to credits outside Australia and New Zealand. But at the same time, its analysts say that the risk is contained by a focus on trade finance.

Standard & Poor's is of a similar view, saying that ANZ “has managed its expansion strategy well to date, and execution risks are manageable”. Most importantly, it says this has been achieved through a focus on vanilla products and on business that has links back to the firm's home markets. The bank is ambitious, but cautious too.

BEST DOMESTIC EQUITY HOUSE

Macquarie

Once again no firm among Australia's domestic banks can come close to Macquarie's dominance of the country's equity capital markets business.

The statistics are overwhelming. It is the only domestic firm in the top seven Australia-listed ECM bookrunner ranking for the period of these awards, April 2013 to April 2014, and overall it is second only to UBS, according to Dealogic.

The 40 deals that it completed in the period gave it an apportioned credit of $4bn and a market share of nearly 15%.

And those deals included some of the biggest: it was on four of the top 10 Australia-listed equity capital markets (ECM) deals, including the two largest, the $1.6bn initial public offering (IPO) of Meridian Energy, where it worked alongside Deutsche Bank and Goldman Sachs, and the $1.4bn flotation of Mighty River Power, together with Credit Suisse and Goldman Sachs.

That the bank was on the biggest IPOs was important at a time when that business returned to the Australian market after some lean years. It notched up an extraordinary 58% market share of the $11bn of IPOs that listed in Australia in the year to April 2014 — the previous year had seen IPO volumes of little more than $1.5bn.

Macquarie also continues to lead the secondary business, too. It is the number one broker of the ASX300 and likes to boast of the sophistication of its Macquarie Dark Pool — which is notable for its lack of high frequency clients or aggregators. The firm polled top in best local brokerage for Australia in Asiamoney's Brokers Poll in 2013 by a country mile, and was also ranked first for country research.

BEST DOMESTIC DEBT HOUSE

ANZ

Having been a tight decision last year, the choice of Australia's best domestic debt house was perhaps even closer to call in 2014. But we felt that ANZ just shaded Westpac again, partly for its market share gain over the period.

ANZ ranked second for Australia domestic currency debt deals in the period under review, according to Dealogic, just behind Westpac and well ahead of the rest of the field.

But its market share rise from 14.6% to 18.6% (climbing from fourth spot in the previous year) was the largest of any major domestic firm, and its league table volume increase of 50% dwarfed the 17% rise in the size of the overall primary market between the two years.

That overall market increase came even though the number of deals barely budged, but ANZ was able to secure mandates on enough of the bigger deals to drive its market share up. The bank also completed the biggest number of deals, at 71 to Westpac's 63.

Westpac was the only other big Australian bank to register a market share gain, from 18.7% to 20.5%.

Among ANZ's DCM highlights for the period were its joint lead role on the A$500m Driver Australia One ABS for Volkswagen, a heavily oversubscribed deal that was a landmark for the asset class. Together with holding its own among sovereign and top corporate issuance it joint led a A$525m deal for ‘BBB’ rated Aurizon, the biggest ever single tranche corporate bond in the currency.


CHINA

BEST DOMESTIC BANK

ICBC

In a country where one Hong Kong-based banks analyst observes “without your glasses on you can’t tell one bank from another,” many are reluctant to name China’s best bank. But when pressed for a standout candidate – and using criteria such as brand recognition, balance sheet strength and profitability, and corporate and customer satisfaction – Industrial and Commercial Bank of China (ICBC) emerged the winner.

“It may not be the most innovative bank, but ICBC has the best operating metrics and profitability, it has strong brand recognition, and it has integrity,” said one Hong Kong banks analyst. “It won’t tick all the boxes, but you won’t find a bank that will.”

Another analyst praised ICBC for striking a prudent balance between risk-taking and traditional conservatism and also gave the bank high marks for transparency versus the other state-owned behemoths that still dominate the banking sector. 

Where ICBC falls down, argues one analyst, is its 25.6 % increase in bad loans in the past year. Indeed, two analysts think that China Construction Bank, sharpening its domestic focus, may soon challenge ICBC, which has been pushing its brand overseas.

Still, none of the big state banks has yet been able to replicate the corporate and customer satisfaction of the smaller operators, namely China Merchants Bank and Minsheng Bank.

For the time being, though, “ICBC continues to take advantages of its strengths: scale, reach, and clout within central government; it’s the big player that you can’t ignore, be it as a competitor or a counterparty,” says another Hong Kong-based China bank analyst.

BEST DOMESTIC EQUITY HOUSE

CICC

China International Capital Corp. (CICC) boasts the strongest equity pedigree of any local institution over the past 20 years, yet in recent times the likes of Citic Securities and Shenyin & Wanguo Securities have raised their distribution and deal-making capabilities.

However, CICC has performed strongly ever since Beijing re-opened the IPO market for China at the end of 2013. It was the largest bookrunner of equity deals between April 1, 2013 and March 31 this year according to Dealogic – a period effectively spanning just three months of IPO activity due to the moratorium the securities regulator had on new deals last year.

CICC was involved as a senior participant in 10 deals, and $5.3bn of deal volume in total. These deals included China Merchant Bank’s $5.5bn follow-on offering of shares in Hong Kong and Shanghai on September 23, 2013, Ping An Insurance’s $4.4bn convertible bond issue on November 27, and the $657m IPO of Shaanxi Coal Industry on January 16. The bank’s primary pipeline was both varied and broad.

It is well regarded in secondary activity too. In Asiamoney’s Brokers Poll 2013 it was ranked top for sales/trading and events and conferences in China, and was voted the most improved brokerage in the country.

However bankers note that its competitive advantages – scale, balance sheet, and robust links with state-owned companies – may soon be eroded as the market shifts.

“We are on the cusp on a shift toward private enterprise, and the brokers that sit in better positions around private enterprise are probably not the likes of CICC, which is tied in with state-owned enterprises,” says a Hong Kong-based China banks analyst.

CICC’s future success will depend on its ability to navigate these shifting tides.

BEST DOMESTIC DEBT HOUSE

Citic Securities

China’s bond market continues to be a space regarded as having more potential than performance. But after years of relative neglect the government and regulators see the benefits of having liquid bond markets that can incorporate private corporate as well as state owned borrowers. Citic Securities stands to do well from this.

The bank ranked well in the country’s bond issuance tables between our period of coverage, being responsible for the equivalent of $20.09bn of deals via 134 transactions, making it the third-largest bookrunner of renminbi bonds according to Dealogic. Standout deals in which Citic Securities played a key role included five multi-billion renminbi bonds from China Railway Corp, which constitute half the top-10 deals issued in terms of volume in China.

The brokerage has strong favourites among market observers too. “Citic Securities has the best institutional sales and distribution team in the industry and its underwriting is the best; all in all it has the most balanced business,” says a Shanghai analyst, who also praises Citic’s strong institutional relationships with the commercial banks and insurance firms. 

“If you have a big bond issuance, people will always go to Citic Securities,” adds a Shanghai-based trader, adding that Citic’s research department is also widely viewed as the market leader.


HONG KONG

BEST DOMESTIC BANK

HSBC

HSBC has continued to grow strongly in all areas of Hong Kong banking, which combined with a set of impressive financial results help the bank retain hold of the best domestic bank award for the territory.

Its reputation and standing is undisputed: “It is the deposit franchise bank in Hong Kong,” says one analyst.

It helps that HSBC can lean on its global business, even as its nearest domestic competitors suffer from higher levels of exposure to China’s mainland credit risks and a less diversified business model.

Broader trends in Hong Kong have not helped domestic contenders either, with rating agencies concerned about the persisting low yield environment and the potential for Hong Kong’s real estate market to pop, given the record prices and likely US interest rate hikes next year, which Hong Kong would have to emulate given the currency peg.

Despite these challenges, HSBC is transitioning well to the Basel III world. It boasts a commercial banking business that spans the full range of clientele, from small local enterprises to the large multinationals. As an example of the recent positive results, its loan and advance business to corporate customers reached a solid $74.1bn by December 31, 2013, up 18% on the previous year.

This contributed to a buoyant financial performance: the bank’s operating profit rose by 6.1% to HK$59.3bn ($7.65bn) in the 2013 calendar year, with an earnings per share gain of 13.5%.

BEST DOMESTIC EQUITY HOUSE

HSBC

A rising tide lifts all boats, but that did not stop HSBC from flying its banners higher than the rest in Hong Kong’s equity market.

The territory enjoyed a robust pipeline of IPOs under the period of coverage, with over 60 companies launching new listings from the fourth quarter of 2013 to the end of March, according to data from Dealogic. HSBC made the most of the bullish conditions, coming out ahead in all categories.

On an apportioned basis, the bank closed on top of the volume league tables in terms of new listings, being responsible for 10 deals and $2.6bn of league table ranking, $673m-worth of rights offerings, and $861m of equity-linked deal flow via five issues.

All-told, HSBC was responsible for a total of 26 equity deals worth a grand total of $4.38bn, representing an 8.2% market share, according to Dealogic data. This put it second overall in the ECM league table for Hong Kong, and well ahead of closest domestic rival Bank of China, which was eighth with a total of 24 deals and $.195bn.

Notable deals for HSBC included HK Electric Investments’ HK$24.13bn IPO on January 22, Sinopec Engineering’s the HK$13.94bn listing on May 16, 2013 and Huishang Bank’s $10.61bn listing on November 6, 2013. Investors also recognise the bank’s trading and brokerage capabilities, with HSBC being voted top Hong Kong’s best local brokerage and top for Hong Kong sales trading in Asiamoney’s 2013 Brokers Poll.

BEST DOMESTIC DEBT HOUSE

HSBC

To complete its winning streak, HSBC also wins the best domestic debt house for the fifth consecutive year. Its key strengths of dominant market share, deal count, volume and variety in currency denominations for new debt deals, continue to persist.

In the April 2013 to March 2014 period HSBC was ranked the top G3 bond bookrunner for Hong Kong and Chinese borrowers according to Dealogic data. It was also the most prolific US dollar bond arranger Chinese high yield issuers and ranked first for Hong Kong dollar and offshore renminbi bonds. The bank helped lead all benchmark G3 transactions over $200m in size.

Impressively, HSBC enjoyed a 54.8% share for Hong Kong dollar bonds, closing 72 deals worth $28.2bn in total – over twice the number of deals of the nearest competitor and three times the deal volume.

The bank also contributed to market innovation, working for example on the Basel III compliant US Dollar denominated bonds for the likes of Dah Sing Bank, China Citic Bank International and ICBC Asia.

Among other notable deals, HSBC represented investment grade issuer IFC Development on its HK$2.5bn 3.4% six-year bond in March, the largest local currency deal of the period under examination. Plus the bank gains praise for its dim sum bond business, where it closed 47 deals worth a total of $20.69bn, representing close to 20% of the market.


INDIA

BEST DOMESTIC BANK

Axis Bank

Analysts and investors have tipped HDFC as the best-run bank in India’s system for years, and it continues to set the pace. But over the past two years competitors Axis and ICICI have regained their footing, closing the gap on their market-leading rival. Meanwhile HDFC’s financials, while still strong, have slipped slightly as it runs out of financial tricks to bolster its bottom line.

“HDFC used to have extra provisions on their balance sheet which they wrote back to maintain smooth profits growth, but this has been exhausted over the past two to three years. We think their earnings growth will drop to 18%-20% in coming years, from 24%-25%,” says the head of research at a prominent local brokerage.

Axis Bank’s momentum is surging as HDFC’s wanes. India’s third-largest private bank used to suffer asset corporate quality issues following the global financial crisis of 2008. In the years since, it has shifted its liability model from relying on wholesale deposits to gaining more fund deposits, made a concerted effort to build its retail deposit base and stripped dead wood out of its lending book. Over the past year or so Axis has also begun lending into slightly riskier areas, which has worked out well, and it is well poised to benefit from a much-anticipated economic rebound on the back of India’s new business-friendly government.

“HDFC is still growing rapidly and I’ve no doubt it will continue, but the delta is in Axis, given where it is today compared to where it was a year ago,” says an equity strategist at an international bank. 

Axis Bank’s latest 2013-2014 fiscal results underline this confidence. The bank reported a 20% rise in net profit to Rp62.18bn ($1.04bn), the first time it had ever breached $1bn, while savings deposits rose 22% year on year and retail term deposits rose 37% in the fourth quarter of the fiscal year.

BEST DOMESTIC EQUITY HOUSE

Kotak Mahindra Bank

India’s leading local investment bank continues to enjoy strong performance even in a lacklustre year for the country’s primary markets.

It only stood in fifth place in terms of equity capital markets bookrunner league tables, behind rivals State Bank of India (SBI) and ICICI, but its $492m in volume through 11 deals was not hugely behind SBI’s $543m via the same number, and SBI only did so well because it self led a Rp80.32bn follow-on offering on January 30. 

Kotak, in contrast, participated in the second-largest deal during the April 2013-March 2014 period, a Rp69.59bn follow-on offering for Power Grid Corp. of India on December 10, 2013, while it was also present on DLF’s Rp18.63bn follow-on on May 13, 2013, and was sole bookrunner for Godrej Properties’ Rp7bn offering of shares on September 12, 2013.

In addition to enjoying solid primary market presence, Kotak continues to impress its investor base. The bank was voted best local brokerage in Asiamoney’s 2013 Brokers Poll, second-best for country research and top for most independent research, while Kotak analyst Sanjeev Pradsad was voted the second-best analyst in the country.

India’s stock market has surged upwards since the country’s elected the Narendra Modi-led Bharatiya Janata Party to government in May, and a slew of new deals is likely. And Kotak, with its solid investor trust and investment banking credentials, is likely to do well out of this renewed market faith.

BEST DOMESTIC DEBT HOUSE

Axis Bank

“There are three local private sector groups that are good in bonds, with enough balance sheet power to create large deals,” says the head of rates and debt at an international bank operating in India. “Axis is the number one, second is ICICI and HDFC is third.”

Axis has long been well regarded for its ability to bring its balance sheet to play in India’s slowly expanding local bond market. It is willing to embrace levels of risk on these deals to support key clients, helping transactions get done.

The bank’s capabilities are revealed in Dealogic’s league tables. Axis Bank sits in second position, with $5.19bn of deal volume through 126 deals, or a 15.8% market share. That’s only behind Trust Investment Advisors. It boasts a presence on every top 10 deal during the period that wasn’t a sole-led mandate, including a Rp80bn 9.95% eight year bond for Food Corp. of India on March 7, and acting as a bookrunner on Power Finance Corp.’s Rp43.51bn two tranche bond issue on May 6, 2013.

These deals have huge bookrunner groups, but Axis is no passenger on them. “Axis has a larger risk appetite and is willing to put balance sheet to work on larger deals,” says the international rates and debt banker. “It has power in terms of holding and pricing debt; we’ve seen it willing to write cheques for half a billion dollars over the last five to 10 years.”


INDONESIA

BEST DOMESTIC BANK

Bank Rakyat Indonesia (BRI)

Bank Rakyat Indonesia (BRI) returns to the top of Indonesian banking this year due to a sterling effort expanding its banking capabilities.

BRI is the second largest lender in Indonesia by assets, loans and deposits, and its microfinancing focus has stood it in good stead amid a robust economy and a banking market expanding to more portions of the country. Among other achievements, the bank reported an 11.8% jump in its workforce to surpass 80,000 personnel in 2013.

Despite a turbulent currency market for the Indonesian rupiah over the past year BRI weathered the difficult market conditions well, with one analyst praising its performance and stating that the bank had shown “resilience during market fluctuations”.

BRI's statistics underline this resilience. The bank saw its total loans jump by 23.7% in 2013, with microfinance still constituting the largest part of the loan portfolio. In the same period, BRI also saw its deposit base grow by 11.5% and its total assets by 13.3%. Its net profit reached Rph21.16tr ($1.83bn), also a healthy 14.2% above the previous year.

The bank, which reported a Tier 1 capital base to total assets ratio of 10.8%, the highest among peers, will have no difficulty adjusting to Basel III reserve ratio requirements. It also brought down bad loans from 1.78% in 2012 to 1.55% by the end of the 2013 financial year.

BEST DOMESTIC EQUITY HOUSE

Mandiri Sekuritas

As the brokerage operations of Indonesia’s largest bank, Mandiri Sekuritas boasts some natural advantages. But it has parlayed these into a steady flow of business that overcame some marked mid-year fluctuations as foreign investor capital fled the country amid fears of the end of US quantitative easing.

While primary deal flow proved relatively thin during the period of April 2013-March 2014, Mandiri was on a large chunk of the deals that were done, participating in seven overall for a total of $294m in league table ranking, leaving it second behind Credit Suisse.

Notable deals included the largest transaction of the period, a $289m follow-on offering for Jardine Matheson Holdings on May 28, 2013, for which Mandiri Sekuritas was a joint bookrunner with HSBC and UBS. It was also a bookrunner on the second-biggest, PT Telkom’s $234m follow-on share offering on July 30, 2013.

Mandiri Sekuritas’ biggest primary market weakness was a relative dearth of participation on local initial public offerings. However on the secondary market front it was far better recognised. It was ranked as both the best local brokerage and the most improved overall brokerage in Indonesia in Asiamoney’s 2013 Brokers Poll.

BEST DOMESTIC DEBT HOUSE

Mandiri Sekuritas

In addition to its equity capabilities, Mandiri Sekuritas also takes home the best domestic bond house for the year. When discussing its debt capabilities, one analyst puts it simply: “Bank Mandiri is the best”.

Mandiri had a stellar year in the debt capital markets, both across traditional bond issues as well as Islamic bond financing. In the calendar year 2013, it built a 16.3% market share working on debt deals worth a total of Rph9.067tr.

Among the crown achievements, the team worked as sole underwriter on the sizeable Rph2.1tr bond by infrastructure company Jasa Marga in September 2013, the largest underwriting portion for the research period. The deal had a one, a three and a five year tranche, which priced respectively at 8.4%, 8.7% and 8.9%. It came at a time of great currency volatility in the market, making the successful closing even more impressive.

Its great performance in the primary markets did not end there. Mandiri was also one of the bookrunners on Agung Podomoro Land’s Rph1.2tr investment grade bond from June 2013, a five-year single tranche deal that priced at par with a 9.25% coupon. Additionally, it acted on the June and November 2013 bonds by Indonesia’s electricity monopolist Perusahaan Listrik Negara.

The firm also shone in the secondary markets, recording a trading volume worth Rph60.58tr in 2013, or 15.58% of the total market share. That share makes Mandiri Sekuritas the most active among the Indonesia Stock Exchange member brokers.


JAPAN

BEST DOMESTIC BANK

Seven Bank

Ask analysts which is Japan’s best bank and the most common response is a variation of ‘they’re equally bad’.

The country’s leading three bank organisations – Mitsubishi-UFJ Financial Group (MUFG), Sumitomo Mitsui Financial Group (SMFG) or Mizuho Financial Group – are not known for their innovation or adventurism. However Japan does boast one strong success story: Seven Bank.

Strictly speaking, it is barely a bank at all. It focuses on operating extensive automated teller machine (ATM) networks, many of which are based inside the country’s extensive 7-Eleven stores (no coincidence, given the latter is the bank’s owner), charging other banks to let them provide their services through its machines. However Seven Bank offers retail customers accounts and is getting into the retail lending game. And it has a bank licence.

Seven Bank’s ATMs are ubiquitous (19,500 and counting) in an aging society. In total 736m transactions were conducted through its machines in the 2013 fiscal year, 5.3% over the previous year.

“The rapid urbanisation of Japan’s elderly is coming through, and they don’t want to walk more than 50 yards to a convenience store, which is benefiting Seven Bank and 7-Eleven,” says the head of Japan banks research at an international brokerage.  

The ATMs offer an enormous variety of service, including foreign currency transfers, bill payments and many other areas.

Seven Bank’s strategy has been so successful it has acquired two ATM businesses in the US and wants to take on Cardtronics, one of the US’ larger ATM providers. It reported ordinary income of ¥99.8bn ($984.9m) and net income of Y21.2bn for the 2013 fiscal year, up 5.7% and 2.8% respectively over the previous year – not bad in an almost stagnant economy. 

BEST DOMESTIC EQUITY HOUSE

Nomura

After a trying period in 2012 and early 2013 Nomura surged back to life during our period of coverage, taking full advantage of general investor sentiment for Japan’s equity market following the election victory of Shinzo Abe at the head of a reinvigorated Liberal Democrat Party at the end of 2012.

Abe’s ‘three arrows’ policies to fire up the Japan economy got investors excited and that helped Japanese companies raise equity. And the country’s biggest investment bank was a key beneficiary.

According to Dealogic figures, Nomura was responsible for $14.31bn of equity capital markets deal flow through 104 transactions, nearly twice the amount of its nearest rival and well above the $6.41bn through 68 deals registered by its closest local competitor, SMFG.

It enjoyed an almost unassailable level of market coverage, being chosen for eight of the top 10 deals of the April 2013-March 2014 period of coverage, including Suntory Beverage & Food’s $3.97bn initial public offering and the $3.09bn listing of Japan Display.

Nomura always fares well in Asiamoney’s Brokers Poll, being perennially voted the top overall brokerage for Japan, and last year was no different. It was voted top overall and best local brokerage, and best for country research as well.

The acquisition of Nikko Securities by SMFG in 2009 has helped that bank scale the heights of equities, and MUFG’s tie-up with Morgan Stanley has helped bolster its investment banking credibility too. But neither institution can yet compete with Nomura.

BEST DOMESTIC DEBT HOUSE

Mizuho Financial Group

While Nomura is pre-eminent in equities, it continues to have fierce competition in the bonds space with Mizuho. In fact the latter’s ability to put balance sheet to work ensured that it was responsible for almost twice the level of bonds during our period of coverage.

Between April 2013 and March 2014 Mizuho arranged $65.78bn-worth of bonds through 450 transactions, for a whopping 30% market share of yen-denominated deals. Nomura stood second, with a less impressive $33.39bn of volume through 331 deals, or a 15.2% market share.

Nomura shines in some areas, most particularly Samurai bonds – although it lies seventh in the league tables, behind a set of international banks – but in terms of overall depth and balance sheet commitment Mizuho cannot be beaten. It’s notable that while both banks were participants on the largest deal of the year, a ¥440bn multi-tranche bond for Softbank Corp. on June 3, 2013, Mizuho was also a participant on the other nine top deals, and sole bookrunner on eight of them (all for Japan Expressway Holding & Debt Repayment Agency).

This is undeniably a bank that leads with its cheque book, but as long as it proves willing to do so to a broad array of borrowers, Mizuho will continue to do well. 


MALAYSIA

BEST DOMESTIC BANK

Public Bank

At a time when CIMB and Maybank have sought regional growth, Public Bank has kept on playing it slow and steady inside Malaysia’s borders.

The institution knows its knitting – retail and small business lending – and is more than happy to stick to it. It delivers solid profits year in and out, and gives good dividends to its shareholders (of which founder and chairman Teh Hong Piow is the largest).

In 2013 the bank reported a pre-tax profit of MR5.31bn ($1.67bn) in 2013, 5.2% higher than in 2012, with profit attributable to shareholders reaching MR4.06bn, the first time it had risen above MR4bn. Its profits came off the back of 11.8% growth in loans and 11.5% in deposits, with the growth particularly coming from mortgages, commercial property loans and auto loans. Bad loans stood at just 0.7%, well under the 1.9% industry average.

“I have to take my hat off to Public Bank. It doesn’t go down the path of offering things it doesn’t understand in an attempt to build a winning model,” says a regional head of bank research at a global investment bank.

Public Bank doesn’t compete in areas such as credit cards, as it lacks expertise, instead leaving it to rivals to take on the credit risk.

“The bank has very low staff turnover which has worked well for them over many years. Clients like having the same people servicing them; it helps build trust,” adds a head of Malaysia bank research at an international bank.

Public Bank’s ability to retain its senior management stands in contrast to Maybank, which has seen the departure of several senior personnel last year, including former chief executive Abdul Wahid Omar.

BEST DOMESTIC EQUITY HOUSE

CIMB

Unlike in recent years, CIMB may have missed out as the best overall bank in Malaysia, but its equity capabilities remain unparalleled.

The banking group’s roots are in investment banking, so dealmaking very much sits in its bloodstream. To this native ability it has added the equity and M&A capabilities of several RBS teams, which is designed to enhance its pan-regional investment banking capabilities in Southeast Asia.

In its home market at least, it certainly succeeds. CIMB stood as the top overall bookrunner of equity offerings between April 2013 and March 2014, being responsible for raising $1.93bn through 15 deals. That was way ahead of rival Maybank’s $732m through seven transactions.

In truth, CIMB’s league table dominance was heavily bolstered by its self-led MR3.55bn follow-on offering on January 13, but it was also present on UMW Holdings’ MR2.72bn IPO on October 18, 2013, SapuraKencana Petroleum’s MR818.4m follow-on on February 18 and Khazanah Nasional-backed Indah Capital’s S$600m ($482.5m) exchangeable bond into IHH Healthcare shares on October 17, 3013. This array of deals demonstrates the bank’s ability to execute across the gamut of equity products.

CIMB is well regarded in the secondary markets too. Voters in Asiamoney’s 2013 Brokers Poll placed it as best local brokerage, best for overall country research, CIMB’s Terence Wong as top analyst and ranked the bank first or second in every sub-category.

BEST DOMESTIC DEBT HOUSE

CIMB

In a similar manner to its ECM capabilities, CIMB is a heavyweight institution in Malaysia’s bond markets.

The bank stood as the most prolific bookrunner of Malaysian ringgit bonds in our period of coverage, conducting 44 deals and netting $6.56bn of league table ranking, according to Dealogic. Again, its largest local competitor in this space is Maybank, and again the bank cannot match CIMB for volume or quantity of deals executed. It conducted $4.98bn of bond volumes through 36 transactions.

CIMB’s dominance is demonstrated by the fact it was picked as a bookrunner on the eight largest bond issues conducted in Malaysia between April 2013 and March 2014, including private sector utility Malakoff’s MR5.38bn 17 tranche sukuk bond on December 12, 2013, electricity company TNB Western Energy’s MR3.66bn 20 tranche sukuk on January 24, gas provider Cagamas’ MR3.8bn eight tranche sukuk on October 17, 2013, and a MR2.5bn three-tranche Islamic medium-term note (MTN) from National Higher Education Fund Corp. (PTPTN) on March 25, which was the largest such deal to be conducted during the 12 month period.

Impressively, CIMB was the sole bookrunner on both TNB Western Energy and PTPTN’s MTN issue, underscoring its debt distribution capabilities in Malaysia. The bank was present in the non-ringgit bond market for Malaysian borrowers too, albeit mainly for CIMB entities. CIMB helped arrange Indonesia affiliate Bank CIMB Niaga’s Rph450bn ($128.76m) deal on November 1, 2013, while it also participated in Export-Import Bank of Malaysia’s $300m 2.874% five-year sukuk on February 10.


PAKISTAN

BEST DOMESTIC BANK

Habib Bank Ltd (HBL)

HBL may be Pakistan’s largest private bank but it registered barely any profit growth last year. However, analysts say its meagre profitability was the consequence of some smart investing.

The lender’s total expenses rose 17.25% in 2013 over the previous year as it invested in new branches, ATMs and technology to modernise its services. This has improved the bank’s appeal.

“HBL is the most advanced Pakistani bank on the technology side; it has implemented the most advanced software in almost all branches and they are all connected on a real time basis,” says a strategist at a local brokerage. “Added to that they have the largest banking network in Pakistan and a strong presence in rural areas.”

The bank is largely believed to have finished expanding its 1,500 branch network, and expanding its ATM network by 750 to a total of 1,303 at the end of 2013. Now it wants to add customers through e-banking and in particular mobile banking.

“Nearly everyone has a mobile phone here so HBL can increase its penetration to mobile banking,” says the strategist.

Added to this, HBL is considered to have one of the most competent management in the country. The bank is in a decent position, having registered 15.3% growth in deposits to Pkr1.4tr at the end of 2013, while its pre-tax profits rose 1.6% to Pkr36.1bn. HBL is decently capitalised too, possessing a Basel III ratio of 15.39% at the end of 2013, up from 15.31% at the end of 2012.

HBL’s investments should help it reap benefits for several years to come, giving it a leg up on many of its rivals.

BEST DOMESTIC EQUITY HOUSE

KASB Securities

Pakistan’s equity market continued to suffer a dearth of primary equity deal flow between April 2013 and March 2014, with only two miniscule deals taking place. In the secondary markets three brokerages stood out: KASB, AKD and Topline. We feel KASB continues to retain the most respect of the market, by a sliver.

“In Pakistan’s equity market there are several good players, and Topline is a fast emerging contender. But of the biggest players I think KASB remains the most impressive,” says the head of equity research for Pakistan at an international bank.

The brokerage was ranked best for overall country research and taking several top analyst positions in Asiamoney’s 2013 Brokers Poll. It also impressed for its roadshows and company access and the events it put on for clients.

However, KASB should be wary of rivals Topline and AKD, both of which also won several categories in our most recent Brokers Poll. As one international frontier markets fund manager tells Asiamoney, “these are three good brokers and there’s not a lot between them”.

And with the Pakistan government likely to sell stakes in some public organisations later this year and the Karachi Stock Exchange on a roll, with the Karachi All Share Index having risen 16% 21,958.04 between January 1 and July 2, local and international investors alike will be increasingly focusing on the country. KASB cannot rest on its laurels.

BEST DOMESTIC DEBT HOUSE

JS Global

Pakistan’s bond market is small, and suffers from even less primary activity than its equity market. And unlike the country’s equity market, bond prices are not publicly available. Instead, brokers act as intermediaries between willing buyers and sellers, making their services indispensable to local fixed income fund managers.

For years it’s been a market dominated by JS Global, one of Pakistan’s largest investment banks and a particularly dominant force in Pakistan’s bond market. The organisation is believed to enjoy the largest market share when it comes to bond trading activity, using its broad array of buyside contacts to facilitate trades in both government and corporate bonds. It’s one of the few non-bank primary dealers of government bonds in Pakistan.

This activity is important for funds that want to retain any liquidity. The lack of primary corporate deal flow – the last public rupee deal to take place in Pakistan was in May 2012, according to Dealogic – means funds need brokers like JS Global for trading and investment opportunities in the secondary market.


PHILIPPINES

BEST DOMESTIC BANK

BDO Unibank

Perennial finalist for the best domestic bank title, BDO Unibank comes back to snag the title this year. The bank stands tallest for assets, loans and deposits, possessing respective market shares of 17%, 20% and 18% in the first quarter of 2014.

BDO is growing too, expanding its branches by 7% in 2013 and adding more in the first quarter of 2014 to 822. This enlarged presence helped it post Ps22.6bn ($517.9m) net income in 2013, 56% up year on year.

“Based on performance in 2013, BDO is indeed the best domestic bank,” says a Manila-based head of equity research. “BDO even managed to surprise on the upside given that they were going for a guidance on net business income of Ps20.4bn.”

Its strong performance is largely down to its 19% growth in lending last year, versus an industry average of 16%. At the same time, the bank brought down its non-performing loans ratio to from 2.8% in 2012 to 1.6% last year. Considering that BDO Unibank’s total assets surged by 35% in 2013 the results speak well of its underwriting standards, provisioning policies, and asset management strategies.

BEST DOMESTIC EQUITY HOUSE

First Metro Investment Corp.

The investment banking arm of Metrobank was in close competition with BDO for the title of best capital markets house in the equity category. Both worked on some of the top deals in the market. In the end First Metro takes both prizes.

2013 was a growth year for the bank, with assets in the trading and investment securities category increasing by 48.5% to reach Ps367.3bn. Overall, income from trading and foreign exchange transactions was a healthy Ps14.9bn, 45% higher than 2012. The boost was one of the primary pushes for the bank’s gains in terms of overall net income – which nearly quadrupled to Ps11.5bn across the group for the year 2013.

On the equity side, the majority of the top 10 new offerings and follow-on deals in the research period were captured by foreign banks, with rare exceptions. The primary market was indeed rather lacklustre for domestic banks, at least as far as the juiciest deals were concerned.

Analysts confirm that First Metro distinguished itself most on the other side of the business: “First Metro was definitely the biggest in secondary market trading last year,” says one.

The bank also worked on two sizeable deals in the reference period. It was part of the bookrunner team on the initial public offering by Asia United Bank that priced on May 3, 2013, raising Ps7.94bn.

The bank was also mandated as co-lead manager on the Ps2.37bn follow-on offering by Megawide Construction on May 20, 2013.

BEST DOMESTIC DEBT HOUSE

First Metro Investment Corp.

When it comes to bond issuance in the Philippines, First Metro really held its own during our period of coverage. One statistic shines above all others: the bank was involved in 94% of total market bond issuance for the calendar year 2013, helping to raise a grand total of Ps219.5bn for its clients.

All-told, First Metro was involved in a total of seven deals raising the equivalent of $532m, giving it a market share of 13.1%. Some of its competitors collected a few more deals, but First Metro made sure to be hired for the ones that mattered.

A coup was its bookrunner role on the high yield offering by National Grid Corp. of the Philippines, which priced in July 2013. The Ps29.5bn two-tranche deal priced with coupons of 5.25% and 5.93% respectively, and was the largest bond in the Philippines market for the research period for the power grid operator.

First Metro was also employed on JG Summit’s February 2014 bond. The investment grade issue raised Ps30bn across a five, a seven and 10 year tranches, with coupons of 5.23%, 5.24% and 5.3%, respectively.

The bank was also mandated on over half the top 10 deals conducted in our period, including a Ps15bn two tranche bond issue by Philippine Long Distance Telephone.


SINGAPORE

BEST DOMESTIC BANK

OCBC

Singapore banks dominate their home market with well entrenched positions, so their ability to execute overseas expansion strategies is normally what sets them apart. For this reason OCBC stands out for an acquisition that improved its exposure to the China market.

The bank’s ongoing $5bn bid for Hong Kong’s Wing Hang Bank underpins the importance of the China market to the bank. As Asiamoney went to press OCBC had accumulated a 67.8% stake in the Hong Kong bank, buying shares at HK$124.77 apiece.

This is equivalent to around a 1.8 times net book value for the acquisition, a level analysts considered slightly expensive, but the deal gives Singapore’s second biggest bank a much firmer footing in China. Wing Hang is Hong Kong’s eighth largest bank by assets with 70 branches in Greater China and its consolidation could boost OCBC’s pre-tax profits from the region from 6% to 16%.

Moody’s and Fitch both downgraded their outlooks on OCBC outlook to negative because the purchase pushed its common equity tier one capital ratio from 14.5% as of December 2013 to 11%. But this remains well above what is required under Basel III regulations and a few days after the purchase OCBC strengthened its capital when it priced a $1bn 10.5 year non call 5.5 year note on April 8. It is viewed as having a strong enough capital position and the experience to integrate Wing Hang.

BEST DOMESTIC EQUITY HOUSE

DBS

DBS retained its crown as the leading Singaporean bank in what was a tepid period for equity capital markets activity in the country.

That said, despite possessing a well established brokerage arm in the form of DBS Vickers, it ranked second to Credit Suisse in equity capital markets activity. The Swiss bank boasted a league table volume of with $1.19bn from six deals, while DBS was a close second with $1.17bn across 16 transactions, according to Dealogic. This included the biggest over the 12 month period – Asian Pay Television Trust’s S$1bn ($804.78m) IPO from May 2013.

Trusts products dominated Singapore’s IPO activity and this is reflected in DBS’ deals list, which includes SPH Reit’s S$554m debut – a spin-off of shopping mall properties by Singapore Press Holdings – and Soilbuild Business Space Reit’s S$479m listing, to name but a few.

The bank’s desire to expand to overseas markets was evident in its equity transactions too. DBS worked on deals in Southeast and north Asia. It completed a pair of IPOs in Indonesia for Mitra Pinasthika Mustika and Indomobil Multi Jasa as well as pricing a follow-on for Hong Kong listed Citic Telecom International Holdings.

Convertible bond issuance in Asia ex Japan also picked up over the 12 month period and DBS played its part, acting as a bookrunner for a $400m five non-call three deal from Taiwan’s Advanced Semiconductor Engineering in August and a Rmb820m ($132m) five non-call three issued by China Daye Non-Ferrous Metals Mining in May 2013. 

BEST DOMESTIC DEBT HOUSE

DBS

The traditional strength of DBS in Singapore’s debt capital markets showed no signs of waning over our period of coverage, with the bank maintaining a masterful lead over its nearest rivals for Singapore dollar bonds. Its market share was 36.3% for the period covered, raising $4.4bn for borrowers, according to Dealogic.

While that tally includes a sole self-led S$805m tier one perpetual for DBS’ own treasury on November 26, 2013, this was by no means the largest deal of the year. That title goes to the S$1.5bn and S$1.45bn bonds from Housing and Development Board in November and September 2013. DBS was a bookrunner on both transactions.  

It was also the only bookrunner to price Singapore dollar bonds for Singapore Airlines, the national carrier, which conducted a S$500m dual tranche issue on March 26.

DBS was not limited to domestic credits either. It also worked on transactions for a number overseas names, including the first Singapore dollar deal from a privately owned Indian company. Tata Communications priced a S$150m 4.25% three year bond in April 2013, which generated orders of more than S$3.5bn and for which DBS was the only Singaporean bank, working alongside ANZ, RBS and Standard Chartered.

 DBS has also made a strong push into the offshore renminbi, or dim sum, bond market. It priced 12 deals totalling Rmb18.05bn ($2.91bn) for a varied group of mainly Chinese borrowers, including property developer Gemdale, state owned lender Bank of China and toll road builder Road King Infrastructure.


SOUTH KOREA

BEST DOMESTIC BANK

Shinhan Bank

It was another tough year for South Korea's banks, struggling amid tight net interest margins and continued loan restructurings. In such an environment prudent risk controls and business diversification matter, and these qualities helped Shinhan Bank shine as the top Korean bank for the fourth year in succession.

It’s not the only good performer. Busan Bank is emerging as another name that analysts like, in part due to the potential offered by its acquisition of Kyongnam Bank, which analysts say will increase its footprint. But the purchase was only signed at the end of June and its impact is still to be seen; time will tell how it fares.

In the meantime, Shinhan is the analysts’ favourite. It is the third largest bank by assets in the country, with some W245tr ($238.46bn) in September 2013. Profitability remains above average and its “robust approach to credit risk management is indicated by the fact that its provision expenses fell 11.3% year on year in 2013, whereas the system reported a 5.9% increase,” according to a report by Moody's earlier this year.

Analysts regularly tout this quality. “It has the ability to detect risks earlier than others, and to see the sectors that have a problem,” says one, who notes Shinhan diversified away from property faster than rivals when the sector became sluggish.

That's one reason why the bank's credit costs are lower than most — around 30-40 basis points (bp), says one analyst. The policy banks pay about 80bp.

BEST DOMESTIC EQUITY HOUSE

Woori Investment & Securities

Equity issuance volumes stayed well off their high volume of two years ago in the year to April 2014, with almost $9bn-equivalent of volume, up from the $8.1bn of the previous 12 months but still far below the nearly $16bn that was raised in the year to April 2012.

In that year it was Woori Investment & Securities that topped the table, beating even the foreign houses that tend to loom large in Korean ECM. The following year it came third overall but was the top-ranked domestic firm. In the most recent period it finished second.

It has been a consistent performer, and although it was slightly behind KDB Daewoo Securities this year in terms of league table credit (with $868m to KDB's $975m), it completed more deals than any other firm, with 16.

That result is not from a scattergun approach — Woori picks its spots carefully. It was on the two biggest deals of the year on which domestic firms acted as bookrunners: the W710.1bn follow-on offer from Korea Gas Corp on October 23, 2013 and the W622.38bn IPO of Hyundai Rotem on October 18, 2013.

This is a competitive market, however, and with KDB Daewoo Securities having recovered its form after having sunk to 10th place in the previous year, it will stand a strong chance of looking the strongest firm if it can show consistency next year.

BEST DOMESTIC DEBT HOUSE

KB Financial Group

One leading firm increased its market share in what was a falling year for volumes in domestic South Korean debt issuance in the 12 months to April 2014.

The 177 deals completed by KB Financial Group in the period under review saw the firm retain its top ranking in domestic DCM but took its market share from 10.55% to 12.62% while market volumes fell 18.6% — a remarkable achievement.

Against that backdrop, KB Financial's own league table credit fell just 2.6% and its deal count was up 36% from its second-placed 130 tally from the previous year.

South Korea local currency DCM is bolstered by a lot of big asset backed security (ABS) issues (no fewer than eight of the top 10 deals in the period were mortgage-backed securities, the other two being bonds from Posco), and KB Financial Group's ranking is certainly helped by its activity in that segment.

But its breadth goes much further. Stripping out all ABS issuance, the firm was a bookrunner on nine of the top 20 biggest debt issues. Only one other player — Korea Investment & Securities — did better, completing ten of those deals but still ranking third overall, well below KB Financial in terms of deals and volume. And KB Financial's roster of corporate clients is as strong as any: its biggest deals were for LG Electronics, Samsung, KT Corp, Hyundai and Lotte Group.


TAIWAN

BEST DOMESTIC BANK

E.SUN Financial Holding

Taiwan’s notoriously fragmented banking market makes life difficult for all participants, which struggle to earn money with low net interest margins. That’s why this year’s winner, E.SUN Financial Holding, has sought to make money elsewhere.

The bank took a leaf out of rival Chinatrust Financial Holdings’ book and focused on gaining fees through non-interest income areas such as wealth management, as well as offering credit cards. “This focus has been key to driving profitability in Taiwan,” notes a Taipei-based head of research at a global investment bank.

Analysts credit E.SUN for offering good market quality products and keeps a focus on risk management. Its financials reflect this, with the financial group reporting total assets in excess of NT$1.38tr ($45.98bn) in 2013 and revenues from non-interest areas reaching NT$13.71bn, up 38% from N$9.93bn the previous year. In contrast its interest revenue slipped from NT$22.8bn in 2012 to NT$22.54bn in 2013. 

While E.SUN bought a 70% stake in Cambodian bank Union Commercial Bank on March 22, 2013, it has mostly focused on making its money in Taiwan.

“E.SUN is principally SME-focused but it’s building a retail franchise and it’s building a fee income base that isn’t dependent on credit spreads,” says a regional head of bank research at an international bank.  “The bank has enjoyed fantastic 20 plus percent growth by creating a Chinatrust-like model domestically.”

E.SUN’s domestic focus on making money through interest margins, small businesses and credit cards  posted a net profit of NT$8.42bn in 2013, up 19.6% from NT$7.04bn in 2012. And it did so while keeping non-performing loans at a low 0.2%.

BEST DOMESTIC EQUITY HOUSE

Yuanta Securities

The merger of KGI Securities with Grand Cathay Securities under the identity of the former on June 22, 2013 created a brokerage well-placed to compete with traditional market leader Yuanta. However, we feel Yuanta continued to boast the best overall combination of primary and secondary business capabilities between the April 2013 and March 2014 period, particularly as its new rival was still bedding in.

Yuanta stood second in the primary deal rankings compared to its combined rival, being responsible for $1.26bn of deal flow via 50 deals, versus KGI/Grand Cathay’s $1.91bn via 65 transactions. It missed out on the largest deal of the period too, a NT$21.5bn follow-on offering for Mega Financial Holding on October 21, 2013.

However Yuanta was the sole bookrunner on the second-largest, a NT$12.71bn follow-on offering for Cathay Financial Holding on July 12, 2013, and was the sole bookrunner for a NT$6.57bn follow-on offering for construction materials company Ruentex Development on June 27 and then a NT$7bn deal for Ruentex Industries on November 21, 2013.

Yuanta impressed in the secondary markets too. It enjoyed a 12.97% equity trading market share in 2013 according to the Taiwan Stock Exchange, ahead of all rivals. Additionally, it was voted the best local brokerage in Asiamoney’s Brokers Poll 2013. However KGI enjoyed top billing for execution and was voted the most improved brokerage too. Domination of Taiwan’s equity market has turned into a two-horse race and Yuanta must dig deep to win this award next year.

BEST DOMESTIC DEBT HOUSE

Yuanta Securities

Yuanta found itself playing second fiddle to the merged KGI-Grand Cathay brokerage in debt capital markets between April 2013 and March 2014. According to Dealogic statistics, the emboldened KGI enjoyed a market share of 2.58bn via 52 deals, higher than second-placed Yuanta’s $2.1bn through 56 transactions.

There is little to call between the two in terms of the largest deals. Both were represented on most of them, including China Steel Corp.’s NT$22.9bn three tranche bond on January 10, but Yuanta was responsible for a far larger portion of the transaction. China Steel also appointed Yuanta and its arch-rivals for its NT$19.6bn three tranche transaction on June 11, 2013, which took place shortly before KGI and Grand Cathay Securities merged their operations. 

Taiwan Semiconductor Manufacturing Co appointed Yuanta and the enlarged KGI for its NT$13.7bn two tranche issue on June 26, 2013, although in this instance the just-combined operations of KGI and Grand Cathay distributed the larger portion, according to Dealogic. 

Yuanta’s sole concrete advantage over KGI lay in its exposure to one of Taiwan’s renminbi deals. It was a bookrunner on the Rmb1bn ($161.81m) 2.9% three-year deal for Chang Hwa Commercial Bank on May 29, 2013. Yuanta’s participation underscored its desire to build its capabilities in this part of the local market.

This is a slim advantage to hold over its competitive rival, but it’s one that could yet prove telling if more renminbi bonds are to emerge in Taiwan.  


THAILAND

BEST DOMESTIC BANK

Siam Commercial Bank

Thailand’s economy may have taken a hit from the country’s seemingly interminable political crisis, but the impact on local banks has been relatively small. This is especially true of Siam Commercial Bank (SCB), which narrowly edged out last year’s winner Kasikornbank to garner the top award.

By any standards, 2013 was an outstanding year for SCB. It reported net profit of Bt50.2bn ($1.58bn), a hefty 28% increase over the figure for 2012, on the back of higher net interest income and increased fee income and higher profits from foreign exchange trading. By comparison, Kasikornbank, or Kbank as Thailand’s fourth largest lender is known locally, posted a 17% increase in net profit.

Analysts point to SCB’s strong management, its universal banking franchise and its unrivalled network of domestic branches as key factors for its success. NPLs as of March stood at 2.1%, with a high loan loss coverage ratio of 148% reflecting SCB’s continued emphasis on asset quality. Costs are also under control. According to Maybank Kim Eng Securities, SCB’s cost-to-income ratio for the first quarter of 2014 stood at 37%, with stringent management of both the funding and operating side of the business helping to boost bottom line growth.

Another positive is that SCB’s capital adequacy ratio (CAR) of 15.6% (12.2% Tier-1) is high enough to sustain the bank’s expansion for the foreseeable future without any need to raise additional cash. And when the political chaos finally eases, SCB is likely to show outstanding growth.

BEST DOMESTIC EQUITY HOUSE

Phatra Securities

Total equity issuance by listed companies on the Stock Exchange of Thailand (SET) rose by 31% to reach Bt339bn in 2013, but the country’s political dispute has increasingly led IPOs and infrastructure fund launches to be put on hold. Average daily turnover on the SET has fallen from Bt48bn in 2013 to Bt30bn in the first three months of 2014.

Despite the difficult operating environment, a couple of local houses managed to shine, including Siam Commercial Bank and Bualuang Securities, the wholly owned investment and securities subsidiary of Bangkok Bank. However Phatra Securities combined strong bookrunner performance with a primary market equity deal volume equivalent to $861m, with an increase in secondary trading on the SET from 4.27% to 5.04%.

Phatra also continues to impress foreign investors with the quality of its research, aided by its long-standing collaboration with Bank of America Merrill Lynch. “Phatra is viewed as a safe pair of hands by institutional investors,” says an analyst working at a competing firm.

Since completing its merger with Kiatnakin Bank in September 2012, it is also in a strong position to leverage the commercial bank’s balance sheet to secure bigger deals.

Amongst its standouts, Phatra successfully launched the Bt9.1bn IPO for MK Restaurant group, Thailand’s number one restaurant chain operator. Phatra also assisted Charoen Pokphand Food (CPF) with the issuance of Bt9.5bn of bonds exchangeable into ordinary shares of CP All; Thailand’s first exchangeable bond.

BEST DOMESTIC DEBT HOUSE

Bangkok Bank

Bangkok Bank fights off competition from Siam Commercial Bank and Krungthai Bank to reclaim the best domestic debt house prize for another year.

Between April 2013 and March 2014 Bangkok Bank topped the league for local currency debt capital market bookrunners, according to data from Dealogic, with a deal value equivalent to $5.1bn, highlighting its participation in virtually every major baht-denominated bond issue. By comparison, SCB notched up $3.4bn of deal volumes and Krungthai $2.4bn.

Bangkok Bank boasts unrivalled placement capabilities among investors ranging from insurance companies, pension funds, government related institutions and retail investors. It also benefits from longstanding corporate banking relationships and close ties to Thailand’s Ministry of Finance.

Amongst its most notable deals for the year, Bangkok Bank acted as a joint lead arranger in the inaugural Bt50bn debenture issue for CP All, the operator of 7-Eleven convenience stores in Thailand. This transaction was the country’s largest ever corporate debenture offering in a single issuance. It also conducted a Bt3bn issuance for the Ministry of Finance of the Lao People’s Democratic Republic, marking the biggest offering of unrated and unsecured bonds in Thailand by a foreign issuer.

Bangkok Bank also earned praise for its role in boosting demand for debt offerings from retail investors. It placed approximately Bt27.4bn debentures with retail investors over the past 12 months, accounting for about 45% of its total underwriting portion.


VIETNAM

BEST DOMESTIC BANK

Military Bank

Non-performing loans (NPLs) continue to dominate the banking landscape in Vietnam, and although progress is being made in rehabilitating balance sheets, some reforms are also being delayed by this year's Circular 9 note from the central bank, which pushes back the reclassification of some NPLs by a year to mid 2015.

Many analysts would prefer reforms to be brought in sooner rather than later, but they also note that banks are managing their balance sheets and NPLs to greater or lesser degrees of success.

One most regularly singled out as a winner is Military Bank, and the bank is once again Asiamoney's Best Domestic Bank in Vietnam.

For most analysts, it is Military Bank's rigorous approach to NPLs and balance sheet discipline that marks it as their favourite. Its cost income ratio of just 36% is far below many others in the sector and well under the 53% average of its peer group.

For Saigon Securities Inc (SSI), a local research house, Military Bank is the top pick. They like its good growth potential (its loan to deposit ratio is still low, at 63%, compared to a peer average of 86%), and they note it is the biggest by assets and profits among the country's joint stock banks — and with the highest return on equity and return on assets.

It also has a lower funding cost than others (analysts reckon it is perhaps 4.5%, compared to a more typical 6%-7%), putting it in a better position to offer competitive loan pricing. Its market share in credit rose from 2.3% in 2012 to 2.5% in 2013.

Analysts at VPBank Securities are among those who like Military Bank's qualitiative approach to loan classification, a function of a management team that is seen as reassuringly conservative. The sector is in for more rocky periods ahead, but Military Bank is seen as better prepared than most. 

  • 05 Aug 2014

Panda Bonds Top Arrangers

Rank Arranger Share % by Volume
1 China Merchants Securities Co 17.33
2 Industrial and Commercial Bank of China (ICBC) 14.45
3 CITIC Securities 10.36
4 Agricultural Bank of China (ABC) 9.42
5 China CITIC Bank Corp 8.48

Bookrunners of Asia-Pac (ex-Japan) ECM

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Goldman Sachs 15,658.50 72 7.59%
2 Citi 14,036.87 89 6.80%
3 Morgan Stanley 13,925.88 63 6.75%
4 UBS 10,938.52 70 5.30%
5 China International Capital Corp Ltd 10,630.08 42 5.15%

Bookrunners of Asia Pacific (ex-Japan) G3 DCM

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 HSBC 21,505.44 181 7.68%
2 Citi 20,709.67 133 7.40%
3 JPMorgan 13,802.40 85 4.93%
4 Bank of America Merrill Lynch 12,328.25 77 4.40%
5 Goldman Sachs 11,208.75 54 4.00%

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