Best OVERALL BANK
Bangkok Bank
The embattled Thai banking sector has had a hard time recovering in recent years. But Bangkok Bank's swift revival has brought the country's largest bank substantial profits over the last 18 months. Its financial strength is underpinned by its leading market position, strong franchise value, its past record of good financial fundamentals and skilled management.
Like all survivors of the Asian financial crisis, the bank has suffered a painful period of bad debts as more than half of its major customers found themselves in financial difficulty. Despite this challenging environment, Chartsiri Sophonpanich, the bank's president and chief executive, has introduced numerous initiatives to rebuild the sound financial fundamentals of the bank and to place it at the forefront of customer service and technology innovation.
Moody's revised the bank's outlook from stable to positive at the end of last year, reflecting the bank's advances in strengthening loan-loss reserve coverage against non-performing assets and in tackling problem loans.
No other Thai bank has achieved the levels of extensive coverage that it has, with 600 branches and a number of micro-branches. Its overseas offices support an important trade-finance business. Moreover, its solid franchise generally enhances its earnings power.
Although the bank still has some work to do on the operating profitability side, particularly in terms of controlling its costs, the bank's overall performance is commendable.
President: Chartsiri Sophonpanich
Total assets: $34,382 million
Return on equity: 11.1%
Credit ratings: Baa (Moody's); BB+ (S&P); BBB- (Fitch)
BEST INVESTMENT BANK
BANK OF CHINA
Bank of China, like the other big domestic players in the People's Republic, still bears the burden of years as an instrument of government policy lending: a pile of non-performing loans. But as a conventional commercial bank, it comes out as one of the country's best. And its investment banking arm, Bank of China International (BOCI), beats the competition to win the award for best investment bank in Asia.
BOCI is one of just two institutions, along with China International Capital Corporation, or CICC, to have won permission from China's cabinet, the State Council, to engage in a full range of investment-banking activities both inside and outside China.
The Bank of China is the only Chinese investment bank that independently underwrites the overseas listing of large state-owned enterprises and actively underwrites issues by mainland and Hong Kong companies. It has acted as sponsor or lead underwriter in dozens of Hong Kong and other international equity offerings and as financial adviser for numerous privatizations and listings locally. In 2001, for example, BOCI acted as global coordinator, lead underwriter and sponsor of the CNOOC listing project, and the following year, it acted as joint global coordinator, bookrunner and sponsor of the IPO of Bank of China Hong Kong.
Under the reformist chairman, Xiao Gang, the Bank of China relaunched itself as a shareholding company in August 2004. Although it is still government owned, the bank plans to sell shares internationally as soon as next year.
Best TRADE FINANCE BANK
Industrial and Commercial Bank of China
China's largest commercial bank is also the country's best trade finance bank. Over the last year, the Industrial and Commercial Bank of China (ICBC) has cemented its status as a force to be reckoned with in an industry dominated by large international banks, especially for structured export financings. On the strength of its growing expertise in this business it wins the award for best trade finance bank in Asia.
Although structured commodity finance generally remains the preserve of overseas banks, ICBC is now making headway into the broader expanse of export and import financing. At the end of 2003, the bank lent money to a transaction that was supported by the relatively new Chinese export credit agency, Sinosure. This was also the first Sinosure-backed deal in which a major Chinese bank worked with a foreign bank, in this case SG CIB.
Many multilaterals operating in China, especially in the oil sector, prefer to have letters of credit opened by European banks, but ICBC is strengthening its position. It is now moving its product range forward having, for instance, begun using forfaiting and export factoring in 2001.
Its armoury of traded finance tools is growing, but it has also designed and executed some special finance products itself, and it has established a finance team to coordinate with foreign banks, especially correspondent banks.
Among ICBC's many advantages are its solid financial strength, extensive customer base and strong relationships with Chinese companies built over time. And foreign banks simply cannot compete with ICBC's expansive network in China.
Chairman: Jiang Jianqing
Total assets: $637, 829 million
Return on equity: 1.5%
Credit ratings: A2 (Moody's); BB+ (S&P); BBB+ (Fitch)
Industrial and Commercial Bank of China
In terms of its sheer size, Industrial and Commercial Bank of China (ICBC) emerges at the top of the People's Republic of China's banking sector. As the country's largest commercial bank with over $600 billion in assets, ICBC operates on a scale that dwarfs all but a few companies worldwide. It is also the country's best project finance bank, having participated in some of the largest and most complex transactions in the country's history.
Last year it teamed up with its local peers to put forward the largest ever commitment by a consortium of Chinese banks to a
single private-sector project: the Nanhai petrochemicals plant. The financing backed Shell's joint venture with China National Offshore Oil Corporation (CNOOC) to build a petrochemicals plant in Guangdong, at a total cost of $4.3 billion. It is the largest project finance deal to date in China, and one of the largest ever deals in Asia.
ICBC's strength is evident more generally – it is at the forefront of modern commercial banking in China. By the end of 2003, its total assets amounted to about a fifth of all domestic assets owned by China's commercial banks. ICBC has 70 sub-branches and stock-controlling banks in all major international financial centres around the world, along with internationally advanced computer networks and technology platforms. Last year it reduced its domestic branch network by 9%, and its deposits grew by 13.5%.
The Chinese banking industry still bears the brunt of years of mismanagement, and with an NPL ratio of 25.69%, ICBC still exhibits evidence of this legacy.
Chairman: Jiang Jianqing
Total assets: $637, 829 million
Return on equity: 1.5%
Credit ratings: A2 (Moody's); BB+ (S&P); BBB+ (Fitch)