AUSTRALIA
BEST DOMESTIC BANK
Australia and New Zealand Bank
Australia's four biggest banks certainly enjoy a privileged position in their local market. But this enviable situation cannot be said to have led to a lack of innovation. Australian companies have been able to enjoy a range of funding options in the domestic market, and a bold approach to securitization has long been a stable source of funding in the country.
There is one bank, however, that stood out over our awards period of April 1 2014 to March 31 2015 for its keen eye for exploring new opportunities wherever they may be. ANZ may have received a lot of positive attention for its bold approach to expanding its business in Asia, but the bank is also backing this up by showing it still has potential to expand in the domestic market.
ANZ has worked to grow its home loans business, as well as its commercial and small-and-medium enterprise lending. All of this helped has ensured impressive growth in its domestic market.
The competition between Australian banks is always tough, something that surely helps encourage innovation in the local market. But after a relatively disappointing year for shareholders in Australian banks, ANZ stood out as the most impressive domestic bank in the market over our awards period.
BEST DOMESTIC EQUITY HOUSE
Macquarie
There are few banks that can boast such an impressive list of domestic ECM deals that Macquarie managed during our awards period. From the A$2.255bn IPO of Healthscope to Medibank Private's mammoth A$5.679bn listing, the house was there for its clients in some of the most eye-catching deals the market has seen in years.
But despite these impressive achievements, it is perhaps the breadth of Macquarie's business that makes it stand out from the crowd. The firm has clearly invested in this market. Macquarie says it has the biggest ECM team in the country. That has ensured that it is able to close more deals than its rivals, adding a host of smaller transactions to the big, landmark deals that tend to dominate the headlines.
Australian equity arrangers face a lot of competition from foreign banks, which can often top the league tables in the country by bringing their global expertise to bear on local market transactions. But Macquarie has made sure foreign bank executives know they will have to fight hard if they want to win market share in the country. It is little wonder that many regard it as the best ECM house in the country.
BEST DOMESTIC DEBT HOUSE
Australia and New Zealand Bank
Australia and New Zealand Bank has a well-earned reputation in its local market as a bank that is able to skilfully execute deals for companies across the credit curve: from small corporates to blue chip companies, from debut issuers to those savvy, frequent names that make up the bread-and-butter of most large banks' debt capital markets business.
This was clearly on display over the last year, when the bank not only helped the Australian government close a A$7bn ($5.4bn) 30 year issue, but also brought record-setting deals from corporates Aurizon and AGL Energy. This steady hand in public transactions, as well as a sure-footed approach to flow business, ensures that bankers at ANZ are kept busy throughout the year with a diverse spread of small and large transactions alike.
Australia and New Zealand Bank does not stop at being just the busiest debt house in its local market, however. The bank's management has long made clear a desire to expand in the overseas market. That not only helps ANZ attract a growing client base from outside its borders but, more importantly for its domestic client base, it gives it a head start in bringing Australian borrowers to the overseas investor base.
CHINA
BEST DOMESTIC BANK
Industrial and Commercial Bank of China
The reforms sweeping across Chinese capital markets, motivated in large part by the government's urgent renminbi internationalisation agenda, are opening up opportunities for China's banks even as conditions in some sectors weaken. That ought to allow for a greater differentiation in quality, and so it has proved. Industrial and Commercial Bank of China (ICBC), as last year, is our pick as China's best domestic bank.
Analysts like its strong return on equity, its conservative approach to capital and impairments and the way in which it has responded nimbly to some of the biggest concerns in certain of China's debt-heavy sectors. In 2014 alone, the bank cut loan balances to local government financing vehicles by one third, and its property developer NPL figures were low, at 0.6%.
Overall, too, its exposures are relatively benign. Its 1.13% NPL ratio for 2014 was lower than both Agricultural Bank of China (by 41bp) and Bank of China (by 5bp).
The bank's active involvement in the RMB internationalisation project will see its international scope broaden over time — it is now the official clearing bank in five offshore RMB clearing hubs. But domestically it has big opportunities too. One route frequently mentioned by analysts is to build up its asset management operation. According to Credit Suisse, doing so would transform it from "a big asset owner into a powerful asset manager".
BEST DOMESTIC EQUITY HOUSE
Citic Securities
In what has been an astounding year for domestic equity capital markets business in China — with volumes almost doubling to $84bn — one firm has transformed its market share to leap up the rankings into first place.
Citic Securities saw its apportioned credit from domestic equity deals rise from $2.4bn in the 12 months to April 2014 to a staggering $7.1bn for the following year, according to figures from Dealogic. It also topped the rankings by the number of deals, with 33.
Chinese domestic ECM business has changed in the wake of the lifting in late 2013 of a regulatory moratorium on IPOs, and firms have rushed to take advantage. But it was not this alone that explained Citic Securities' dramatic improvement — only five of its deals were IPOs.
Follow-ons and a few chunky convertible bonds — notably the $1.6bn CB for Zhejiang Zheneng Electric Power Co, which it led together with CICC and Morgan Stanley — accounted for the vast bulk of its work. And it was sole bookrunner on fully 21 of its total of 33 transactions.
The result is a testament to the work the firm has done to build its distribution platform. The house also ranked as the second best local brokerage in Asiamoney's Brokers Poll 2014 results for China, just a fraction behind rival CICC.
BEST DOMESTIC DEBT HOUSE
Citic Securities
Citic Securities' position in Chinese domestic debt activity in the period under review was not quite as comprehensive as its dominance of the equity capital market rankings. But its improvement from the previous 12 months was no less remarkable.
The firm topped activity by volume, with almost $55bn of deals for a market share of 9.3%. Its deal volume rose about 160% year on year, against a backdrop of overall industry volumes that were up 80%.
It did not complete the biggest number of deals — there were four others in the top 10 volume rankings that completed more transactions than Citic Securities. But it was on the trades that counted, making its average deal size a whopping $390m, compared to China Development Bank's $206m and ICBC's $238m, second and third, respectively, in the volume rankings.
Its roster of transactions spanned most sectors, but it was notably prominent in financial institution deals, including two $6bn-plus trades from Agricultural Bank of China. The perennially huge issuer China Railway Corp also brought it a large slug of apportioned credit, its eight deals for the name bringing it 6% of its total.
With reforms poised to pave the way for increasing international participation in China's credit markets over the next two years, from both issuers and investors alike, firms consolidating leading positions now stand to gain handsomely. Citic Securities will certainly be in that number.
HONG KONG
BEST DOMESTIC BANK
HSBC
The last year has not been the easiest for HSBC, Hong Kong's leading banking franchise. It has struggled to win over shareholders with either the way in which it is tackling legacy issues that have been the focus of regulators or through its efforts to improve returns and create a more streamlined organisation.
Those difficulties have been reflected in the bank's share price, which fell by 5% over the 12 month period to April 2015. But pre-tax profits rose by that amount in 2014, and revenues by 7%.
The year ahead will be dominated by talk of the bank moving its London headquarters, with the exception of a ringfenced UK retail bank, to Hong Kong. But away from that distraction is the reality of an entirely dominant position in the banking of Hong Kong clients.
HSBC is the top G3 debt house for Hong Kong issuers, as well as being mandated on more equity deals for Hong Kong clients than any other franchise. It leads the way in Hong Kong dollar transactions and offshore renminbi bonds.
Its diversified business — its investment bank does not dominate the firm in the way that it does at some rivals — ensures it stays nimble. And its much-trumpeted collaboration initiative is seeing success as clients from the commercial banking division are increasingly brought over into the realm of global banking and markets. It is hard to see any competitor approaching its scale in Hong Kong any time soon.
BEST DOMESTIC EQUITY HOUSE
HSBC
While it is the pre-eminent equity capital markets franchise of local origin in Hong Kong, HSBC is perhaps not as dominant as might be expected when it comes to the international competition in Hong Kong. It only ranks sixth in the bookrunner league tables, despite its extensive banking coverage and debt work for clients.
The bank's equity capital markets business has never had quite the profile or heft of its financing and DCM franchises. But it nonetheless performed well in overall ECM, rights issues and equity-linked.
Rights issues have always been an important part of HBSC's ECM offering, being the part of an ECM franchise that is most aligned with an overall financing focus rather than pure execution. Balance sheet commitment is the key, and the bank was there for clients including HKT ($1bn), PICC P&C ($1.2bn) and New World Development ($1.7bn).
IPO credits included GF Securities ($4.1bn), Fuyao Glass ($952m), Dalian Wanda ($4bn), BAIC Motor ($1.5bn) and CGN Power ($3.6bn). It was on five of the seven Hong Kong IPOs of more than $1bn in the period under review.
BEST DOMESTIC DEBT HOUSE
HSBC
There are few franchises under assessment in this awards process that so overwhelm a market as does HSBC in local currency bonds in Hong Kong. The bank's market share fell slightly in the year to April 2015, but at 42%, it is still about four times bigger than any other.
But local currency debt just scratches the surface of HSBC's credentials in the city. It also leads the way for G3 debt for Hong Kong issuers, with nearly $4bn of apportioned credit in the period under review.
Standout transactions included the Hong Kong SAR's landmark $1bn debut sukuk, the first anywhere in the world by a triple A rated government. Hutchison Whampoa's dual tranche dollar/euro deal was the biggest ever corporate bond from Asia, at $5.4bn, while CLP Power's perpetual issue showcased the firm's ability to deal with more structured trades.
That was also illustrated by its continued championing of hybrid and bank capital deals. The bank is widely recognised as a global leader in bank capital transactions, and in Asia it has led every inaugural offshore Basel III transaction from each jurisdiction where there have been deals.
During the awards period bank capital trades for Hong Kong names included Bank of East Asia's $500m tier two and China CITIC Bank International (HK)'s $300m perpetual additional tier one. In the corporate hybrid space the bank's deal roster includes trades for Noble Group and CLP Power.
INDIA
BEST DOMESTIC BANK
Axis Bank
Axis Bank has continued its recent derisking efforts, and the strategy is paying off, with the institution now looking better placed than rivals to weather any slowdown in corporate growth.
But even while it wants to continue to tighten its lending quality on the corporate side, it is continuing to push into riskier areas of retail lending. More broadly, it has also further expanded its offering to capture more of India's unbanked population.
This strategy mix is what analysts expect will drive a strong financial performance in the future — and lower credit costs. Its numbers are already strong: revenues and net profits were up 17% in the financial year 2015. Net interest income was up 20%.
Analysts also like Axis because of its capital strength and efficiency. Tier one capital of about 12% and return on equity of around 18% are factors that will help support a 20%+ rate of loan growth in the next three years, says Credit Suisse.
In addition, the bank's assets are well diversified and it continues to develop its already strong retail franchise. It was retail fee income — which grew 30% in the financial year 2015 — that drove Axis' overall fee income growth of 13% and now accounts for 38% of group fee income.
BEST DOMESTIC EQUITY HOUSE
Kotak Mahindra Bank
India's equity capital markets had a rampant year by recent standards, with volumes soaring from just $6.5bn in the 12 months to April 2014 to more than $15bn one year later.
It is not that more deals are happening, though: they are just getting bigger. The 138 deals that made up the total volume in the period under review was in fact five fewer than in the previous year, according to Dealogic.
That made getting on the deals that counted ever more important, and Kotak Mahindra Bank once again made sure it did, completing more trades than any other competitor, including among the foreign banks active in the market.
Kotak Mahindra is the only Indian firm in the top six bookrunner rankings — it is placed fourth, behind Deutsche Bank, Goldman Sachs and Bank of America Merrill Lynch. But it is comfortably ahead of JM Financial and State Bank of India, the only other home-grown franchises in the top 10.
A big chunk of its result this year was down to securing a role on the follow-on of Coal India, a whopping $3.7bn privatisation block that all three of the leading Indian ECM houses were on, alongside some foreign institutions.
Missing out on that would have seen it lose out sharply to rivals in the rankings. But away from that juggernaut it also completed a string of smaller deals for the likes of Tata Power, Steel Authority of India and IDFC, as well as some small IPOs, such as the $58m listing of Adlabs and the $27m flotation of Ortel Communications.
BEST DOMESTIC DEBT HOUSE
Axis Bank
In stark contrast to its equity capital market volumes, where a surge of government driven activity has boosted deal flow, India's local debt capital markets saw overall volumes fall some 13% in the year to April 2015.
Despite that, some firms managed to increase their market share. Axis Bank did so, and maintained its lead at the top of the rankings. It is our pick for Best Domestic Debt House.
Its deal volumes fell slightly, from $6.2bn-equivalent to $5.9bn from an identical number of deals, at 138. But market share rose from 16% to 17.4% and it remains well ahead of ICICI Bank in second, which saw $4.6bn of volume from 104 deals.
Indian DCM is dominated by a number of very regular issuers, and Axis completed no fewer than 14 transactions for Power Finance Corp, including one for more than $1bn. Rural Electrification Corp also features 14 times on Axis's deal roster.
But that is not to say the franchise is reliant on just a few top names. The bank also completed a host of high yield bonds from lesser known credits, and its ability to capture diverse business looks to have stood it in good stead.
The market may have grown this year, but it is still tight at the top between Axis and ICICI. In the year to come, a handful of big mandates could swing the balance the other way.
INDONESIA
BEST DOMESTIC BANK
Bank Rakyat Indonesia
Bank Rakyat Indonesia has impressed analysts recently, increasing its full year profit in 2014 by 14% year-on-year and continuing to push profits up in the first three months of 2015. This was all the more impressive given the slowing economy in Indonesia, as well as rising bank funding costs near the end of our awards period.
The bank has partly achieved its impressive results by sticking to what it is good at, according to a Jakarta-based analyst. Bank Rakyat Indonesia has been boosting its fee pool, particularly by taking fees on electronic banking transactions. It has also made sure to invest in the bread-and-butter business of retail and transaction banking.
“They have invested heavily in their payments and transaction banking business and that has started to pay dividends,” says the analyst. “They now have the largest ATM network in the country.”
But Bank Rakyat Indonesia is not just relying on retail banking clients. The institution increased its lending to state-owned enterprises by 19% year-on-year in 2014, and loans to other corporations by 20%. Bank Rakyat is not a major player in either the bond or equity markets. But this strong retail presence, alongside an increasing focus on corporate clients, gives it a clear advantage over its rivals in the country.
BEST DOMESTIC EQUITY HOUSE
Danareksa Sekuritas
The reasonably small volumes in an equity market like Indonesia's mean that league table places change hands quickly, and should not be relied upon too much by corporations looking at who should manage their next IPO or follow-on offering.
It is Danareksa's strong brand reputation, rather than its numbers, that come up in conversations with analysts following the banking sector in the country.
But during our awards period the bank managed to make those numbers fit the reputation, becoming the top bookrunner of equity transactions with $823m of business, according to Dealogic. That represented an impressive increase from the $160m the bank managed in the same period last year. It also helped steal the limelight away from some of the foreign banks that are vying for business in the country.
On most IPOs in the country, Danareksa can be expected to play a role, according to an analyst in the country. The same can be said for awards looking at the country's financial system. The work it has put in over the last year makes it seem certain it will be a name that stays on people's lips ever more over the following years.
BEST DOMESTIC DEBT HOUSE
Indo Premier Securities
Indonesia's debt market is clearly an attractive area for foreign banks. European and US banks, as well as Asean banks, fight for as much business as they can get from the local market. That often leaves little room for Indonesian players to capture all the business they otherwise could.
It is little surprise, in this context, that four of the top five debt capital markets banks in the country are from overseas. But above all of these banks, with not just bigger volumes but more deals than any of the foreign institutions, sits Indo Premier Securities. The firm had a market share of less than 10% during the period of April 2013 to March 2014, according to Dealogic. But during the following year, it improved dramatically.
The $260m of debt business the firm handled in our awards period was around 182% more than Bank Mandiri, the next best Indonesian debt arranger, managed during the same 12 month period. It surely will come as little surprise to market participants that Indo Premier is the clear winner of best domestic house in Indonesia.
JAPAN
BEST DOMESTIC BANK
MUFG
Japan's biggest bank, Mitsubishi UFJ Financial Group (MUFG), has got where it is after many years of mergers that have now given it one of the biggest universal banking platforms in the world. All Japanese banks struggle to shine amid a moribund domestic market, but MUFG is our choice as Best Domestic Bank in Japan for its continued strength and ambitious strategy.
Analysts like its aggressive approach to improving its domestic retail business, but also believe that the bank is best positioned for the next few years, particularly because of the large contribution made by its non-Japan businesses.
MUFG's most recent full year net profit of just over ¥1tr was a record for Japan, but a big contribution to this was the bank's Thailand subsidiary, Bank of Ayudhya. Revenue from MUFG's non-Japan Asia operations is now larger than its European or US businesses, and bigger than Mizuho and SMFG combined, notes CLSA.
MUFG's broad international presence, which it uses to best advantage by muscling in on syndicated lending even where other banks may be reining in lending, sets it apart. It also gives the bank more scope to offset disappointing conditions at home.
BEST DOMESTIC EQUITY HOUSE
Nomura
Nomura last year proved itself again to be the pre-eminent equity franchise in Japan, with its 36% market share in equity capital markets bookrunning more than double that of second placed SMFG.
The firm's credentials accumulate to include most areas of the business. Nomura was a bookrunner on the 10 biggest deals in the period under review (including three where it acted as sole bookrunner).
Its equity-linked market share was even more dominant than in straight equity, at 57%, and also in equity-linked it sold 98% of the total issue amount to international investors.
Standout deals across its equity and equity-linked business included the country's largest in the 12 months to April 2015, the $3.3bn-equivalent follow-on offering for Mitsui Fudosan. But it also led the biggest IPO, a $2bn deal for Recruit Holdings, as well as the largest convertible bond, a $1bn dual tranche offer for Lixil.
Other highlights include the $2.7bn follow-on of Dai-ichi Life Insurance and the $1bn follow-on of Electric Power Development Co.
Its equity franchise may be utterly dominant in Japan, but its convertible bond business has global clout. It is regularly recognised in international surveys for its liquidity and research coverage, and its team spans London, Tokyo, Hong Kong and New York.
BEST DOMESTIC DEBT HOUSE
Mizuho
Mizuho continued to lead the Japan debt landscape in the 12 months to April 2015, with a market share almost double that of its nearest rival. Its 446 deal credits gave it an apportioned credit of some $56bn and a 28.5% share of the market.
The bank, which is increasingly spreading its wings elsewhere in the world too, having snapped up parts of the US operations of RBS, for example, is seen all over Japanese bond market activity, whatever the asset class or sector.
Its credentials in SSA issuance, whether for collective local government financing or through its string of deals for individual prefectural governments, are vast. It also did its fair share of ABS.
On the corporate bond side, four of its five biggest deals were for Softbank, two for ¥3.8bn each, the third for ¥3.3bn and the fourth for ¥2.9bn. Other names to feature among the bank's largest transactions include Panasonic, Nissan Motor, Central Nippon Expressway, Fujitsu and Mitsubishi Heavy Industries.
Mizuho's presence is all-encompassing, and with a strong balance sheet that it is also not afraid to deploy abroad to secure relationships and subsequent capital markets business, it stands as the franchise to beat.
MALAYSIA
BEST DOMESTIC BANK
Public Bank
The story of Malaysia's banking system over the last year has been the mega-merger that didn't happen — the attempt to bring CIMB together with RHB Capital and MBSB, a mortgage bank. The deal eventually foundered as market conditions meant it no longer offered the kind of value proposition it once had.
In the wake of that, CIMB ended up rescaling its businesses dramatically, cutting staff and business lines to focus more on its core franchises. That will open up opportunities to rivals, but one firm was serenely out of the fray and continued to make its slow and steady progress in Malaysian banking. Public Bank is once again our pick as the country's Best Domestic Bank.
Profits rose 9.5% in 2014, with return on equity of 20%. Analysts like the fact that the bank's domestic loan growth has been outpacing the overall sector's, and that its cost to income ratio has been improving — and was down to just 30% by the end of 2014, compared to an industry average of about 45%.
The balance sheet remains in good shape, partly a function of the bank's conservative approach to what it does. Its gross impaired loans ratio was just 0.6% at the end of 2014, compared to an industry average of 1.6%. Its loan loss coverage ratio is higher than average.
It simply does more with what it has than many others do. Productivity is a virtue often neglected by financial institutions. Not so at Public Bank: in 2014 its gross loans per employee stood at MR13.5m and deposits at MR15.2m, 26% and 16% higher than the industry, respectively. No wonder that profits per employee of MR320m are 25% above average.
BEST DOMESTIC EQUITY HOUSE
Maybank Investment Bank
Maybank's improvement in market share of primary equity capital markets activity in Malaysia as overall volumes stayed flat and the league table leader lost ground have secured it our selection as Best Domestic Equity House this year.
The bank doubled its roster of deals over the period, to 14, while also increasing its market share to 17% from 11.5%. At the same time, first placed CIMB saw its market share plummet from 30.5% to 18.2%.
Maybank's credentials over the period under review included working on the three biggest IPOs in Malaysia — Boustead Plantation, Icon Offshore and 7-Eleven Malaysia. On two of those, Icon and 7-Eleven, it allocated more than its fellow lead banks.
But it was also on the four biggest rights issues, showing it can commit balance sheet alongside its new listing expertise.
Deals it led were not just plain vanilla, either. The 7-Eleven trade was not only the largest retail sector IPO in Malaysia, but was also notable for the lack of any lock-up on the eight cornerstone investors that were brought in.
CIMB's retrenchment in certain areas of its business ought to offer more scope to its rivals to narrow the gap. Maybank is well on the way already.
BEST DOMESTIC DEBT HOUSE
CIMB
In spite of a year of upheaval, as first a three way merger with RHB Capital and MBSB failed to be consummated and then a new three year strategy plan saw a reorganisation of the bank's capital markets business, CIMB has retained its leading position in local currency bonds in Malaysia — by a whisker.
The bank has long been a leading player in Malaysian bonds — not just in volumes but also in structuring expertise, innovation and a diverse client base. In the period under review it brought 48 local bonds to market, according to Dealogic, for apportioned credit of $4.68bn, putting it just ahead of Maybank, on $4.2bn from 39 deals.
But the bank is also very active in issuance for Malaysian clients in foreign currencies, and CIMB is usually to be seen on the landmark trades from the best quality clients. Last year these included a simultaneous conventional and sukuk deal for Petronas that totalled $5bn, and a $500m exchangeable sukuk for Khazanah. The MR1bn perpetual sukuk that the bank led for Malaysia Airports Holding was another landmark, being the first ever rated sukuk perp in the world.
Among CIMB's roster of qualities are its structuring expertise, its regional distribution, its commitment to market making, its restructuring work, its derivatives prowess and its willingness to commit balance sheet.
Last but not least, it energetically plays the role of regional leader in the development of the broader market, whether in promoting Islamic finance or cross-border Asean bond markets.
PAKISTAN
BEST DOMESTIC BANK
Habib Bank Ltd (HBL)
"If I rank on all metrics then I would say that Habib Bank has really come of age," says one analyst covering the sector in Pakistan. It's a verdict that others share, and the bank is again our pick for the Best Domestic Bank in Pakistan.
The bank is the biggest in Pakistan in terms of assets, deposits and advances. HBL has been a sleeping giant for a long time, but analysts say it has upped its game in terms of innovation in branch banking, mobilising deposits aggressively, as well as pushing further in structured finance.
It helps that it is profitable, but also in its favour is a management team that is regularly identified as the best in the country. The bank's asset quality has been improving in recent quarters, with non-performing loans now at levels not seen since 2008.
Just how strong that story is was illustrated clearly in the Pakistan government's exit of its holding in HBL earlier in 2015, when it sold its entire 41.5% stake for about $1bn through a three day bookbuild in April — the country's largest ever equity capital markets transaction.
The response to that deal shows also that investors consider HBL to be a story with potential, not one that has already run its course. Analysts agree. "They are already ahead of anyone else, but in three years they will increase the gap they have," says one.
BEST DOMESTIC EQUITY HOUSE
Elixir Securities
The paucity of primary equity capital markets activity out of Pakistan means that our choice of Best Equity House has to place considerable importance on equity brokerage work. There are a vast number of brokers in the country, but a handful of names that are regularly identified as being the most respected. Our choice this year is Elixir Securities.
Competition, in particular from firms such as Topline Securities and KASB Securities (the winner of this award last year), remains strong. KASB's breadth and internet platform are praised, while Topline scores for its entrepreneurial approach and the quality of its research service.
But Elixir just shaded it this year, with clients of the firm lauding its overall service. The company, formerly Indosuez WI Carr Securities, has activities spanning portfolio management, equity advisory and execution, research, and has equity sales and trading, money market and FX desks.
Much of the infrastructure is what it inherited from WI Carr Securities, giving it a technological and reliability edge over many rivals.
But the firm also boasts a primary ECM prowess that not all others can claim to share. It was a domestic joint lead on three bank privatisation trades during the period under review: a $142m sale of Allied Bank, a $388m disposal of United Bank, and then the giant $1bn exit by the government from Habib Bank.
BEST DOMESTIC DEBT HOUSE
JS Global
JS Global, which traces its history back to 1970 and whose parent group now employs 23,000 people and has interests spanning real estate, transport, resources and industry alongside its core financial services operation, is the clear leader in Pakistan's small bond market, where it provides brokerage services and is thought to be the biggest trader.
It is seen as a carefully managed operation, with local rating agency Pacra noting the firm's prohibition on the proprietary trading of equities as a bulwark against over-exposure to market risk.
The firm has been increasing its corporate and foreign customer base, says Pacra, and is also continuing to build out its retail presence, partly through JS Bank branches.
Its investment portfolio, notes Pacra, "is dominated by high-yielding fixed income securities which provide a stable, indeed growing, stream of income. The investment book also remains a source of liquidity amidst inherently volatile brokerage industry."
PHILIPPINES
BEST DOMESTIC BANK
BDO Unibank
It came as little surprise to analysts that BDO Unibank managed to post record profits over the course of 2014, earning Ps22.8bn ($503.5m) off the back of an impressive growth in net interest and fee income. But although the numbers alone are impressive, BDO's ambitious approach to revenue generation is what really turns heads among analysts and investors.
BDO is not only the largest depositor in the country; it also has a strong wholesale division that is constantly looking for new ways to make money. The bank's approach has, in fact, had a large impact on the operations of the whole banking sector in the Philippines.
“BDO has innovated the way banks do business in this country,” says Alfred Dy, head of Philippine research at CLSA. “Banks are now trying to do much more cross-selling of their different products from different divisions. This goes back to the retail DNA of the bank.”
That retail DNA comes from BDO's part of the SM Group, a widespread conglomerate owned by Henry Sy. The company has a diverse range of interests, but it is perhaps best-known in the Philippines for the number of SM Malls around the Philippines. Those malls are large, diverse and highly profitable. Just like BDO Unibank.
BEST DOMESTIC EQUITY HOUSE
Metropolitan Bank and Trust Company
Metropolitan Bank and Trust Company, better known as Metrobank, has managed an eye-popping turnaround in its equity capital markets business over the last few years. The overall ECM market contracted during our awards period, but no-one appears to have told executives at Metrobank.
The bank closed just two deals between April 2013 and March 2014, according to Dealogic, leading to business of just $57m. But a year later, the bank has managed to push its way close to the top of the league table, closing three deals worth $593m. That made it the best-performing Philippine ECM house during our awards period, earning it a rank only behind UBS on the league table.
The small number of deals during both awards periods shows that, in the Philippine market, banks can see a rapid rise or fall in their market share based only on a few deals. The market is, after all, host to only around 25 deals a year, most of them small.
But that makes each deal all the more important — and clearly, Metrobank reaped the rewards this year from adding one more transaction to its roster.
BEST DOMESTIC DEBT HOUSE
BDO Unibank
Primary bond issuance in the Philippines tumbled during our awards period, but that was only one bit of bad news for local banks working in the market. Amid the slower deal flow, foreign banks also appeared to set their sights more firmly on winning business from the Philippines. Standard Chartered, Deutsche Bank and HSBC, respectively, held the top three spots on the league table during our awards period.
There was still room for Philippine banks to show their abilities in the domestic market, however, and BDO was a case in point. The bank's overall bond business dropped heavily from the year before, but the four deals it helped close were still more than any of its local rivals.
BDO Unibank is among the most aggressive banks in the domestic capital markets, working hard to make sure that any time its clients want to raise money, it is the first institution they will call, says an analyst in Manila. The bank may have lost some business to its foreign rivals over the last year, and bank executives will certainly be looking to improve in the future. But they can take pride that in a slowing market, they still managed to stand out from the crowd. That surely puts them in a favourable position for the years to come.
SINGAPORE
BEST DOMESTIC BANK
DBS
Singapore's big three banks — DBS, OCBC and UOB — face a common challenge. The local market is highly competitive and it is saturated. But DBS has traditionally been the most ambitious of the three in its regional aspirations, and its strong performance over the last year, coupled with a structure that means it is well positioned for a changing global macro environment, has help to secure it this year's best bank award.
Its financial performance has been impressive. It racked up profits of S$4.05bn in 2014, a record for the firm. And it is the biggest player by several measures, including having the largest consumer bank. Additionally, its dominance among local houses for domestic debt and equity capital markets activity is total. That position also exposes it more to market conditions, but its rise in profits even as local bond and equity issuance activity have fallen illustrates well the diversity of the bank's earnings streams.
It's a position that equity investors recognise, helping to push the bank's stock up nearly 25% in the period under review, the 12 months to April 2015. And analysts like the story, too. Moody's notes in particular that the bank is better positioned than its competitors for a rising global rates environment, because of a funding structure that the agency describes as superior. The bank has a higher share of low-yielding customer deposits, meaning that it will be shielded from climbing wholesale costs more than others.
DBS is Singapore's premier franchise. That it will be soon be the pioneer for Singapore's new covered bond regime is no surprise, but serves to underscore the firm's market-leading — and market-defining — position.
BEST DOMESTIC EQUITY HOUSE
DBS
Equity capital markets activity in Singapore is going through a rough patch. Poor liquidity in the domestic market is hardly encouraging investors to participate, and their reluctance creates a vicious circle whereby issuers hold back in the face of the formidable competition for buyside attention that is presented by soaring indices elsewhere.
But of the activity that did take place in the year under review, one bank dominated — as it did other asset classes too. DBS is again the only possible choice of Best Domestic Equity House for Singapore.
The statistics are almost irrelevant. DBS completed 18 transactions for league table credit of $873m and a 13.4% market share, with only JP Morgan notching up a bigger volume — but from just three deals. The nearest Singapore competitor to DBS was PrimePartners, an asset management and corporate finance advisory firm, with just $164m of volume.
With such dominance of the deal flow, it is inevitable that DBS has worked on the most important transactions. For the 12 months to April 2015, these included the IPO of Keppel DC Reit, Frasers Hospitality Trust and IReit Global — the last of those being the first ever European Reit to be listed in Asia.
But overall Singapore ECM activity fell again this year, by 24% to just $6.5bn. DBS is by far and away the leader, but it will be hoping that it can convince more clients to tap investors in the year ahead, not just continue to lead a shrinking market.
BEST DOMESTIC DEBT HOUSE
DBS
DBS faces more competition in the Singapore debt capital markets business than it does in equity capital markets — but not very much more.
The bank has once again dominated bond rankings, racking up no fewer than 70 bookrunner mandates for Singapore dollar deals in the period under review for apportioned credit of $5.9bn and a 37% market share. That places the bank comfortably ahead of second placed OCBC.
It shone in bringing debut issuers to market, with no fewer than 20 domestic and international names choosing the bank to lead their first foray into Singapore dollars. International issuers included Trafigura, Far East Horizon and Pacific Andes Resources Development.
Structuring is another area of expertise, with secured issuance, green bonds and offshore renminbi deals all featuring in the bank's broader regional credentials.
But in its core Singapore dollar sector, perpetual deals for names such as Frasers Centerpoint, Trafigura and Hyflux stood as testament to the bank's leadership of the perpetual market. In FIG, deals included a triple tranche renminbi deal for ICBC Singapore that featured a Lion City local listing.
And although the bank acts for the very biggest names, it has also built a reputation in shepherding small and medium sized enterprises to market too. It has been busy establishing SME MTN programmes and also led debuts for a clutch of such issuers.
With the bank's regional strength underpinned by a rock solid Singapore dollar franchise, it is hard to see another house threatening DBS's position for a long time to come.
SOUTH KOREA
BEST DOMESTIC BANK
Shinhan Bank
Shinhan Bank is "still the leader" among Korea's banks, in the words of one credit analyst who studies the sector, and our pick for the Best Domestic Bank in South Korea has now racked up that feat for five consecutive years.
Analysts like the bank's strong ratios but also its profitability metrics, some of which are the highest among the four major banks in the country.
Its market funding ratio has improved since the local regulator imposed its 100% loan to deposit ceiling in 2011. Shinhan now relies on the market for just 11% of its funding, compared to 13.5% in 2011. And its ratio of liquid banking assets to tangible banking assets stood at 20.2% at the end of 2014, above the 17.7% average for Korean banks.
As a result, its profitability ratios surpass others, with average net income to tangible banking assets at 0.6%, above the other big banks.
Moody's has recently upgraded the bank's foreign currency long-term deposit and unsecured debt ratings to Aa3 from A1. In addition to the strength of its funding position and profitability, the agency also likes the look of Shinhan's balance sheet, with "the strongest asset quality among Korean banks, with the lowest problem loan ratio and credit costs".
A diversified approach to lending has helped create that, as well as a conservative take on risk management — a sensible formula in many markets, but particularly Korea.
BEST DOMESTIC EQUITY HOUSE
NH Investment & Securities
In the wake of the acquisition of Woori Investment & Securities by NH Financial Holdings, it is no surprise that NH Investment & Securities has blown away the competition in the South Korea domestic equity capital markets business, making it our choice of Best Domestic Equity House for another year (Woori won in 2014).
Its market share in the period under review was almost a full 10 percentage points ahead of its nearest domestic rival, Korea Investment & Securities, suggesting that its lead is secure for some time to come. But the second placed firm can take heart from the fact that it completed only one deal fewer than NH, marking a big improvement from its previous year's ranking.
NH certainly nabbed its share of chaebol restructuring activity, of which plenty more is expected to come in the years ahead. Topping its deal roster in terms of size were the $1bn IPO of Cheil Industries, the de facto holding company of the Samsung conglomerate, as well as the $1bn follow-on of Hyundai Glovis.
Deals for Kepco, Korean Air Lines and Korea Gas Corp also feature among the firm's top mandates.
The Cheil deal is one of only a handful of sizeable IPOs, with the remainder of activity in the country dominated by follow-ons. But smaller listings have featured too, and NH has been efficient at ensuring it is present on the lower end of business — it led six IPOs of less than $200m.
BEST DOMESTIC DEBT HOUSE
KB Financial Group
In a year that once again saw South Korean local DCM issuance shrink again in total size, KB Financial Group has maintained its position at the top of the bookrunner rankings, and extended its market share.
Its $15.3bn of apportioned credit represented an increase of 17% over the previous year, in spite of the overall market falling 8%. And its market share increased from 12.8% to 16.2% over the period under review.
Its deal roster was again impressively varied, spanning the usual large and regular issuers but also smaller, less frequent names. And while it was certainly present on a good chunk of Korea's typical asset backed securitization, these by no means swamped the corporate bond business.
Its biggest deals included issues for LG Electronics, Lotte Chemical and KT Corp — and most of the biggest names of Korea Inc are represented. Almost 30 transactions for Hyundai entities are just one example of its coverage.
KB Financial was not the only firm to improve its market share in a falling market, however, suggesting that the Korean DCM business is becoming more concentrated. KDB Daewoo Securities and Korea Investment & Securities are formidable competitors, and could well overhaul KB Financial in the future.
TAIWAN
BEST DOMESTIC BANK
E.SUN Financial Holding
Taiwan's banks are under increasing regulatory pressure to moderate their exposure to Chinese risk. For a bank like E.Sun, which had already slashed its exposure, this is hardly a problem.
It now has one of the very lowest exposures to China as a percentage of net assets, at below 60%, and has cut that in the 12 months to the end of 2014 by far more than any other, down from something around the mid 70% area.
That approach is why the bank regularly attracts compliments from credit and equity analysts for its prudent risk management and its diverse and balanced portfolio. The bank has avoided the big defaults of recent years — not because it could not have participated in the original lending, but rather because it turned them down.
It also benefits from a supportive parent, as analysts point out. E.Sun Financial Holding does not demand aggressive upstreaming of dividends from the bank, so E.Sun Bank gets to keep most of its profits.
That helps it invest for development, and it has aggressive plans for boosting its operations on the Chinese mainland, from where it will be able to take an even more informed view on Chinese risk than it already does. It's expanding elsewhere, too, and has applied to open a branch in Sydney.
BEST DOMESTIC EQUITY HOUSE
Fubon Securities
Fubon Securities cannot boast a league table-topping market share of Taiwan's primary equity market business — that honour still belongs to the combined forces of KGI Securities and Grand Cathay, which merged in 2013 and are subsidiaries of CDIB Capital International Corp.
But where Fubon stood out in the 12 months to April 2015 was in its astonishing improvement in market share and deal volume. At a time when leader CDIB and second placed Yuanta Securities both lost market share, Fubon raised its game to climb from 15th place in the bookrunner league tables in the year to April 2014 to third place in the period under review, according to data from Dealogic. That is a big achievement in a market that fell in total volume by 7%.
A big contributor to this result for Fubon was its sole bookrunner mandate on the IPO of Aerospace Industrial Development Corporation for more than NT$6.5bn ($192m), by far the biggest IPO of the year, being more than three times the size of the next largest. But being the culmination of extensive preparatory work by Fubon with the company and the Taiwan Stock Exchange, the deal was a perfect example of the firm's increasingly competitive offering across documentation, due diligence and execution.
And the franchise went well beyond one deal. A well diversified selection of convertible bonds and follow-on deals, as well as its market making activities on the Emerging Stock Market all contribute to its growing clout. It remains to be seen if the momentum can be maintained, but if it can then the volume leaders have a strong competitor to fend off.
BEST DOMESTIC DEBT HOUSE
Yuanta Securities
As with last year's rankings, Yuanta Securities finished the 12 month period to April 2015 in second place in the domestic currency bookrunner league tables for Taiwanese bonds, according to Dealogic, behind the combined KGI-Grand Cathay operation.
But, as with last year, we have chosen Yuanta as our pick for Best Domestic Debt House in what is becoming an increasingly tight decision. But when factoring in the financial debenture market, Yuanta leads in market share for the period under review.
As previously, the firm underwrote the biggest portion of many of the deals where it was a lead. Particularly notable as a demonstration of Yuanta's structuring and execution prowess was the Nan Ya Plastic Corp deal, a NT$10bn issue that featured an unusual 15 year maturity, with Yuanta underwriting some NT$7.5bn.
It is too early to see what the long term development of the renminbi-denominated Formosa bond market will hold, but this year has seen a flurry of activity there. The data sample is too small to allow meaningful conclusions to be drawn at the moment, but as deal flow increases, this may well prove to be the aspect that takes KGI back to an unassailable position in future.
THAILAND
BEST DOMESTIC BANK
Siam Commercial Bank
Thailand's economic growth has stagnated in the last few years, culminating in a rise of only 0.7% throughout 2014. The nature of the equity markets means that, in this context, banks are rarely given a pass to stagnate until the growth engine kick-starts again. They are, naturally, expected to search high and low for the most exciting sources of profit available in the country.
Siam Commercial Bank (SCB) has done just that. The firm has long boasted a strong retail bank, according to analysts. But the bank has worked hard to improve its investment banking business, including making major inroads into mergers and acquisitions business. That has helped the bank create synergies with its impressive debt business.
That does not mean the bank has been able to push ahead of the crowd in pure profit growth terms. A one-off impairment payment has certainly hit the bottom line, and net interest margins have fallen along with other banks in the country.
But analysts argue that by most metrics, SCB looks more impressive than its peers — and its ambition to use its strong retail deposit base to grow into other areas means that it is likely to impress even more in the years ahead.
BEST DOMESTIC EQUITY HOUSE
Bualuang Securities
Bualuang Securities, the equity brokerage subsidiary of Bangkok Bank, is a name thrown into the ring by analysts whenever equity awards are being decided for Thailand. The firm has an impressive ability to bring corporations to the equity market, and it was this area where Bualuang really shone over our awards period.
The bank managed to capture a market share of more than 21% in the domestic ECM market between April 2014 and March 2015, a major improvement from the 14.4% share it managed to win during the same period last year. That was more than enough to ensure that it won the top spot on the league table during our awards period.
That was particularly impressive given the attempts of foreign banks to win ever more business from the country. Malaysia's Maybank is one of the busiest ECM banks in the country, but Credit Suisse, JP Morgan and Morgan Stanley are all attempting to capture some of the limited business available in the country.
These banks can certainly offer something to their Thai clients, and they will be important in making sure the market grows in the years to come. But, for now, they cannot compete with the impressive strength of Bualuang Securities in Thailand's ECM market.
BEST DOMESTIC DEBT HOUSE
Siam Commercial Bank
Some banks win their awards by grabbing the biggest share of a fast growing market, but others stand out because they managed to beat their competitors to the punch in a market that is, at best, stumbling forward. Siam Commercial Bank was clearly in the latter camp this year.
Thailand's poorly performing economy has led to a sharp contraction in the bond market, but Siam Commercial Bank made the most of a depressed market environment over our awards period. Between April 2013 and March 2014, there were around $22.28bn of bonds closed in the Thai baht market, according to Dealogic. But over the next year, that had fallen to $17.9bn – and despite its own bond business falling on the year before, Siam Commercial was able to take the top spot.
It should be little surprise that the bank has pedigree when it comes to finding strong demand for bonds, according to analysts. Several of the most senior bankers at Siam Commercial Bank came from Standard Chartered, a bank that clearly knows a thing or two about bringing emerging market borrowers to the debt market. But no bank can be successful without creating the right culture among the troops on the ground, and analysts say that Siam Commercial Bank has done just that with its capital markets team.
VIETNAM
BEST DOMESTIC BANK
Vietcombank
Vietnam's banking sector has had another challenging year, but at last there is some hope for the future, with consolidation finally on the cards following the introduction this year of a law that restricts cross-ownership to just 5% in a maximum of two other institutions.
Mergers are planned or under way involving a host of institutions, including Sacombank with Southern Commercial, Vietnam Maritime Commercial and Mekong Development, and BIDV with Mekong Housing Bank.
The sector, then, is being shaken up, and with non performing assets continuing to be bought up by a state-backed asset manager, the climate is ripe for good firms to shine.
Military Bank, our pick for Best Domestic Bank in Vietnam last year, continues to perform well, and is still one of the names that analysts like. But on balance we felt this year that Vietcombank stood out a little more.
"It is well organised, has good management, is well capitalised and is at the forefront of moving towards newer services," summarises one analyst who specialises in Vietnam. "From an investment point of view, it is expensive, but from a general banking point of view, it is clearly the best bank."
VCB had its origins in financing and facilitating foreign trade, but it has broadened its offering considerably since its establishment in 1963. It was the first state commercial bank to be privatised by the government, listing through an IPO in 2008.
Growth has been aggressive: assets rose 23% in 2014 and profits were up 2.3%, just ahead of target. It is looking for consolidation candidates and is disposing of its crossholdings in other firms in line with the new regulations.
Analysts at local firm SSI Research like VCB because of its diverse income streams (non interest income was 32% of profit in 2014), high efficiency and aggressive provisioning. Its provision coverage ratio by the end of 2014 was 94.4%, well above the listed bank average of 78%.
Duxton Asset Management, which has a focus on Vietnam, comments that "well known for its transparency and modernity as well as fast adaptability to changes in the business environment, VCB is our top pick in the sector".