Asiamoney best bank awards 2019: Hong Kong
Best Domestic Bank: HSBC
In Hong Kong, HSBC is the bank others are measured by and, in many cases, aspire to be, notably the big Chinese state banks in their forever-quest to usurp it. Yet again, ‘The bank’, as it’s known, led the Hong Kong market in all the key measures: overall customer accounts, mandatory provident fund accounts and mortgages, in a market where property is paramount.
|Diana Cesar, HSBC|
It sold the most insurance, made the most loans and advances of any bank to Hongkongers and financed the biggest share of trade in the entrepôt. And lest anyone think that Hong Kong chief executive Diana Cesar’s operation was simply a domestic retail powerhouse, it also dominated the debt and capital markets. Despite its London domicile – hardly a convenience these days – HSBC is very much a Hong Kong bank, as the calendar 2018 numbers reveal.
HSBC Hong Kong’s profit before tax in 2018 was 65% of its Asia-Pacific take, and 58% of worldwide HSBC group profit. And this last year, it grew even more, with HSBC Hong Kong’s revenue up 14%.
Those state-owned Chinese and even Japanese aspirants for HSBC’s mantle – we’re looking at you MUFG – have clearly still got some work to do.
Best Corporate and Investment Bank: HSBC
Such was HSBC’s supremacy across Hong Kong’s investment banking sector that some of its competitors for our awards left the bank off their self-promoting submission tables, arguing (unconvincingly) that HSBC was a local bank and thus doesn’t qualify in Hong Kong’s international capital markets.
Note to HSBC’s foreign competitors: it does, providing the heft from both its domains, offshore and local. And, further note, that would be Hong Kong-based Deborah Leerhsen and Wallace Lam, HSBC’s joint co-heads of global banking, sitting opposite you at the deal-bidding table, competing with, indeed often besting you for some of the territory’s chunkiest mandates.
HSBC was Hong Kong’s leading debt and capital markets house in 2018. It dominates G3 (dollar/euro/yen) fundraising in Hong Kong, bringing the most Hong Kong issuers across various business sectors to the market and nailing landmark transactions that HSBC says have set new benchmarks in terms of size, structure and execution.
During the award period, HSBC achieved 12.5% market share, which was nearly double that of its closest rival, and acted as bookrunner for Hong Kong borrowers in 16 out of 26 transactions.
HSBC led the league tables for G3 bonds, Hong Kong dollar bonds and offshore renminbi bonds by some margin. It snared 12.5% of all G3 bond issues, well ahead of Paribas at 7.5%, and took 23.3% of the renminbi bond sector, putting it well ahead of Standard Chartered at 19.5%; it also snatched 32% of the Hong Kong dollar bond market, almost three times the share of runner-up StanChart. Notable deals included three Eurobonds for Li Ka-shing’s CK Hutchison Holdings, a €1.25 billion duo in April 2018 that were followed up by a €500 million issue in December.
In equity capital markets, HSBC raised over $18 billion for Hong Kong clients in 15 deals, and was particularly active among Chinese issuers, notably getting a piece of the huge Xiaomi and Ping An floats. It helped to bring Chinese property management company A-Living Services to market, marking Hong Kong’s first H-share listing to be spun off from a red-chip listed parent, the Guangdong-based property giant Agile, which went public in Hong Kong in 2005.
Best Private Bank: Credit Suisse
In Hong Kong’s buoyant, brand-conscious private-banking sector, inevitably it’s a tussle between the Swiss: Credit Suisse and UBS. UBS has the bigger operation, with nearly double the headcount of relationship managers, according to industry data – or 1,138 at UBS versus 586 at Credit Suisse – in the Asia-Pacific region.
|François Monnet, Credit Suisse|
But under François Monnet, head of north Asia, Credit Suisse has done more with less this year, by some measures. Credit Suisse reported net revenues of SFr1.6 billion ($1.5 billion) through its private banking arm in calendar 2018, and pre-tax income (PTI) that was almost 4% higher on 2017.
Its chief rival UBS showed a 5% drop in PTI on net revenues of SFr2.4 billion. In its 50th year in Hong Kong, Credit Suisse claims that more than half the billionaires on the Forbes Hong Kong List are its clients. And it continues to migrate and service clients via its digital offerings, such as its proprietary ‘Canopy’ platform, contributing to a 2% improvement in its cost efficiency ratio, to 64%.
Best bank for SMEs: Hang Seng Bank
Hang Seng Bank’s chief executive, Louisa Cheang, has just come through her second year of running Hong Kong’s quintessential grassroots bank, and things seem to be going swimmingly for the former head of retail banking at HSBC. Small and medium-sized enterprises are Hang Seng’s core business, particularly the aspiring stallholders, traders and shopkeepers that line Hong Kong’s teeming streets. As they – and Hong Kong – have grown bigger and richer, Hang Seng has helped them along that prosperous journey to China and beyond – and this last year was no exception.
|Amos Chan, Hang Seng Bank|
Hang Seng’s commercial banking division, which includes SME banking and is led by Amos Chan, reported a 35% leap in operating profit to HK$8.57 billion ($1.1 billion), while the bank approved 90% of SME loan applications.
Net interest income rose 33% to HK$9.33 billion, reflecting balanced growth in average customer loans and deposits. This lending expansion drove a 33% increase in credit facilities fees, while insurance income and remittance fees rose 24% and 16% respectively. From its new tech centre at its head office in downtown Central, Hang Seng has substantially upgraded its clients’ digital reach, launching its SME-facing channel BERI – Business/Efficient/Responsive/Interactive – which has been widely adopted in the market.
Best International Bank: Citi
Angel Ng’s nimble Citi Hong Kong operation was busy – and profitable – in 2018, her first year in charge as chief executive, thanks in large part to Chris Laskowski’s investment banking division.
|Angel Ng, Citi|
Laskowski’s team topped the foreign bank league tables for fixed income and mergers and acquisitions this last year, and ran Morgan Stanley a close second in wallet terms on equity deals.
Laskowski’s highlight was arguably the $4.3 billion deal to take private Gordon Wu’s property and infrastructure group Hopewell Holdings, the largest ever such deal for a local property company. Citi was also lead financial adviser and sole underwriter for Wu’s related $2.7 billion in acquisition financing.
The bank also had a hand in South African tech investor Naspers’ $9.8 billion sell-down of Chinese technology group Tencent, part of a stake in Tencent that Naspers had held since 2001. Citi says the deal was the largest non-privatization block trade in history.
Citi handled China Evergrande’s $2.3 billion convertible bond offering, the largest such deal in Asia outside Japan in 18 years, and was financial adviser in the Tung family-led $8.4 billion sale of their Orient Overseas shipping group to China’s state-owned Cosco Shipping and Shanghai International Port Group. Beyond the corporate and investment bank, Citi’s domestic consumer banking had a tidy year, with a 42% year-on-year rise in mobile-active card customers. It all helped total revenues for Citi’s Hong Kong franchise to leap almost 15% to $2.27 billion, with pre-tax profit a healthy 25% higher at $1.43 billion, while Citi Hong Kong’s total assets climbed 12% to $50 billion.
Best Digital Bank: Standard Chartered
With its nifty ‘SC Keyboard’ application, Standard Chartered Hong Kong has solved those tricky problems many of us have when dining out with friends – the embarrassing lack of actual cash for the bill.
|Vicky Kong, Standard Chartered|
This is how it goes: a friend picks up the tab for dinner. As you make your way home, you inevitably chat through your smartphone with your friend from within StanChart’s multi-lingual keyboard, which also enables you to pay for your share of the meal. If the friend is also using the SC keyboard, he/she can see the transaction whizz into their account instantaneously. It’s done fast and fuss-free, and has proved one of Hong Kong banking’s most popular additions since StanChart rolled it out this year across its 1.7 million customer base – that’s one quarter of Hong Kong’s bankable population.
Standard Chartered has won widespread plaudits for the instinctive ease and use of its digital offerings in Hong Kong, which is proving a model for similar rollouts in the bank’s other big markets around the region, including Taiwan, Singapore and China.
Best Bank for CSR: Bank of China (Hong Kong)
When super-typhoon Mangkhut roared through Hong Kong in the middle of last September, the most intense such weather vent to strike the territory since records began 73 years ago, it devastated the MacLehose Trail, the much-loved track that traverses 100 kilometres across Hong Kong’s New Territories.
|Gao Yingxin, Bank of China (Hong Kong|
Within hours of the tempest abating, teams of Bank of China volunteers were out braving the end of Mangkhut’s wrath to restore the devastated track: clearing paths, cleaning up debris, unblocking drains. It was a smart initiative, a savvy example of the soft but highly visible energy China’s state institutions are deploying in Hong Kong and across the region.
In 2018, BOCHK, whose CEO is Gao Yingxin, focused its CSR effort on youth development, poverty alleviation and support for the disadvantaged, donating to 25 charities covering these areas. Volunteers summoned team friends and family members to serve in more than 100 events through 2018, giving a total of 50,000 man- (and woman-) hours to serve community initiatives.
In line with directives from Beijing, BOC also stepped up its green credit efforts, claiming to underwrite about 30% of the so-called green bonds issued in the Hong Kong market in 2018.