Asiamoney best bank awards 2019: Taiwan
Best Domestic Bank: CTBC Bank
Best Private Bank: CTBC Bank
The clustered skyscrapers at CTBC’s futuristic headquarters in Taipei’s Nangang district betray the reality that the enterprise housed within is just a bank. With its shopping malls, branded stores and dedicated infrastructure integrated into Taipei’s grid, it feels more like a miniature city here, or at the very least an important government ministry complex. Which, in many respects, CTBC is.
|James Chen, CTBC Bank|
Its owners, the Koo dynasty, have never been far from the nexus of power in Taiwan, regardless of who is wielding it. The Koos’ influence derives from the money machine that is Taiwan’s most profitable bank – still widely known to Taiwanese as ChinaTrust. Though CTBC’s still-handsome returns were slightly down in 2018, then so too were Taiwan’s; the island became collateral damage in US president Donald Trump’s trade war with mainland China, which is Taiwan’s notional enemy as well as its biggest trading partner. But taxed profits of NT$35.73 billion ($1.14 billion) at CTBC, the country’s biggest privately owned bank, were solid in this tough year on the island. As Taiwan’s mature economy endures its sustained slowdown, it helps CTBC that its non-performing loans have been pushed down to an industry near-low of just 0.24% of the total domestic loan book.
Under Daniel Wu’s no-nonsense stewardship, CTBC is well-placed to sail around further ill trade winds. Across 14 countries, CTBC has built Taiwan banking’s most extensive foreign network, which contributed 38% of group profit this year. That is targeted to rise to 45% by 2021, a buffer against problems at home.
Notably, CTBC is the only foreign bank to own a standalone bank in Japan, Tokyo Star, a testimony to its regional clout and standing.
In private banking, CTBC has pushed hard to capture Taiwan’s rising wealth, particularly in Taipei, which boasts the world’s eighth-highest concentration of ultra-high net-worth individuals (generally deemed as having more than $30 million in net worth), according to the international property agency Knight Frank. In 2018, Swiss bank UBS had identified 35 Taiwanese billionaires.
CTBC launched a NT$150 million ($5 million) net wealth segment, with its Private Privilege model in 2018, serviced by a new dedicated team of relationship managers. CTBC says total assets under management for this sector doubled in 2018. Moreover, the bank boasts, its client turnover rate is below 10%, highlighting the intimate relationship between HNWIs and CTBC, an “obvious differentiation in the Taiwan market,” it says.
Best Bank for SMEs: E.Sun
E.Sun likes to cite the Taiwan government’s annual gongs honouring this heavily industrialized island’s ‘outstanding small and medium enterprises’ as validation of its SME business. The awards are assessed by the economics ministry and, since 2014, a third of the winners have been E.Sun clients.
|Joseph Huang, E.Sun|
The last awards, for 2018, marked a particularly proud year for E.Sun; nine of the 22 awardees were clients. Chief executive Joseph Huang says the SME segment is in E.Sun’s DNA because it still remembers when it was one itself, not so long ago.
Owned by its employees, E.Sun was founded in 1992 with the very purpose of serving Taiwan’s SMEs, and it has grown as its customers have, to make Taiwan a crucial cog in the global supply chain. The bank says its SME loan book in 2018 was NT$347.3 billion ($11 billion), almost 6% higher than 2017, the best sectoral growth of its peers. As of December 2018, E.Sun says credit guarantee financing totalled NT$38.6 billion, ranking it in the top five in the market.
During the year, E.Sun opened branches in Brisbane, Guangzhou and Phnom Penh, and now boasts 28 outlets in nine countries.
It has followed its manufacturing sector customers into Hong Kong, Singapore, Cambodia, Myanmar and Australia, where E.Sun’s branches are fully integrated into the parent to allow local clients to avail of financial services by deploying property held in Taiwan and sometimes in mainland China too, as collateral for locally required loans.
Best International Bank: Citi
Best Corporate and Investment Bank: Citi
With their close links to the US, Taiwanese have long regarded Citi as their go-to international bank, a status that the likes of HSBC and Standard Chartered are normally accustomed to in much of Asia.
|Paulus Mok, Citi|
The 49-branch Citi franchise on the island has always been one of Citi’s brighter lights in the region – and calendar 2018 simply confirmed that. Paulus Mok’s Citi Taiwan reported pre-tax earnings of $432 million in 2018 to be the most profitable foreign bank on the island. Citi Taiwan’s return on assets and equity came in at 1.6% and 12.36% respectively in 2018, well above the industry averages of 0.7% and 9.31%. Citi Taiwan’s retail metier has long been its credit cards business. It launched them in Taiwan and is the leading credit card issuer on the island, with the highest activation rate (85%) and much higher spend-per-card, making it the best among the top five card issuers and 20% over the market average.
Citi Taiwan launched the Citi PChome co-branded card in May 2018 through a partnership with PChome, Taiwan’s leading e-commerce site. The card helped increase Citi card spending in PChome by over 40% in the three months after launch.
That suggests a wealthier clientele, so it is no surprise that Mok has also made inroads into Taiwan’s expanding wealth market this last year; the number of Citigold Private Clients and Citigold Clients rose by 7% in 2018, with assets under management up 7.3%.
In corporate and investment banking, it’s a similar story, Citi Taiwan being Corporate Taiwan’s go-to bank for dealmaking.
In the mergers and acquisitions sector, Citi’s corporate team advised on the largest and highest-profile deals in Taiwan, ending the year top of the league table with six deals completed, worth around $10 billion in total.
Its standout deal was a joint venture worth $2.7 billion between Taiwan Cement Corp and Turkey’s Oyak group in October. Citi introduced both parties in what is the largest outbound M&A transaction in Taiwan since 2016 and the largest M&A deal in Turkey in 2018. In May 2018, City advised leading Taiwanese electronic component manufacturer Yageo Corp in its $740 million purchase of Pulse Electronics from Oaktree Capital.
Best Digital Bank: Standard Chartered
In an era when legacy banks are challenged to win Asia’s so-called K-Pop market (and in media-flooded Taiwan, that’s a bigger challenge than in many other markets), Standard Chartered thinks it may have got it right. Its smart in-app keyboard aims to extend and enhance its digital offering, providing tailored social media channels for the island’s affluent millennials.
|Anthony Lin, Standard Chartered|
Its keyboard banking and QR payment services allow customers to conduct peer-to-peer payments on any kind of mobile device, and do it all within the app, while continuing to chat without switching between messaging apps.
StanChart has partnered with the digital pay services of Apple, Google and Samsung to be the only foreign bank offering all three in Taiwan. By the end of calendar 2018, the monthly spending via the three payment systems grew 50%, and the number of active users increased by 83% since launch. Overall, StanChart’s mobile adoption rate of transaction by clients grew 59% in 2018.
StanChart has won widespread plaudits for the instinctive ease and use of its digital offerings in Taiwan and the bank’s other big markets around the region, such as Hong Kong, Singapore and China.
Best Bank for CSR: E.Sun
Corporate and social responsibility hasn’t gained much traction in industrialized, ultra-capitalist Taiwan, but E.Sun is one bank that takes it seriously. Chief executive Joseph Huang says it is part of E.Sun’s ethos.
Owned largely by its employees, E.Sun, says Huang, was started in 1992 to advance the common good by servicing the then-emerging but underbanked army of small and medium-size enterprises, and that philosophy underpins its day-to-day business today.
That’s not to say E.Sun is a charity – far from it – but Huang says its goal is to financially empower the Taiwanese and bring the country with it. This is exemplified by what it claims is the island’s first public-private partnership financial plan, developed by E.Sun with the influential Taipei city authority, the state’s small and medium-sized enterprise credit guarantee fund and the official SMECF, the Small and Medium Enterprise Counselling Foundation.
The model shortens normal bank loan application time by a third while extending facilities to enterprises that might not ordinarily qualify for conventional financing, and with the lowest interest rate – 1.6% – in the country. E.Sun has devoted around $3 million to this ‘Smile and Hope Loan’ programme.
It has also been active in extending education to some of the island’s more remote and disadvantaged regions with its ‘Golden Seeds’ project to improve literacy in such areas.
As of 2018, about 140 libraries have been built, with 240,000 books donated. The medium-term target is to add 60 more libraries. The project is supported by E.Sun’s MasterCard, which has 200,000 cards issued. E.Sun says 70% of its VIP customers took the card because of its support for Golden Seed.