Asiamoney best bank awards 2019: Singapore
Best Domestic Bank: UOB
UOB is in the middle of a radical transformation. It is shedding its image as a cautious, conservative bank and adopting an ambitious digital strategy so that it can change with the times. And it is doing so while its financials are strong.
|Wee Ee Cheong, UOB|
Net earnings rose 18% to a new high of S$4.01 billion ($2.9 billion) for 2018; net interest income jumped 13% to S$6.22 billion, boosted by loan growth and stronger net interest margins, beating rival OCBC’s 9% growth and coming in just under DBS’s 15% increase.
UOB’s net profit before tax also rose, up 15% to S$4.83 billion.
What stands out at the bank, led by chief executive officer Wee Ee Cheong, is the balance it has maintained among its various business divisions. Total income at the retail banking arm rose 4% in 2018 to S$3.95 billion, while at the wholesale bank it climbed 11% to S$3.94 billion and in global markets it increased 6% to S$465 million. Profit before tax at the three units climbed 4%, 10% and 16%, respectively.
Return on average ordinary shareholders’ equity rose from 10.2% to 11.3% in 2018, as return on average total assets improved to 1.07% from 0.98%.
The numbers show one side of UOB’s story. But the bank also experienced internal change last year. Wee Cho Yaw, Ee Cheong’s father, stepped down from UOB’s board in early 2018 after six decades at the bank. While from an operational point of view, it was business as usual, his departure was still monumental internally; it marked the first time that Ee Cheong, who has been CEO since 2007 and is the third generation of the Wee family to lead the bank, was running the business on his own.
That coincided with the digital transformation. UOB partnered with companies such as Chinese fintech company Pintec Technology Holdings, Israeli firm Personetics, and ride-hailing service provider Grab. It also launched a new digital bank. These efforts also make it Asiamoney’s best digital bank for 2019.
The Wee family owns slightly more than 20% of UOB, and this family ownership has held the bank in good stead. Its revenue channels are sustainable, its balance sheet is robust and its liquidity position is stable. In a country such as Singapore, where the domestic market is dominated by three banks (the other two being DBS and OCBC), UOB stood out for its investment banking prowess too, working for Housing Development Board and Keppel Infrastructure Trust. It ranked sixth in terms of Singapore investment banking revenues during the awards period, earning $17 million for a 4.66% market share, according to Dealogic.
Best Bank for SMEs: OCBC
OCBC’s mission appears to be to make lives easier for the owners of small and medium-sized enterprises. That was more than evident in some of its key rollouts during Asiamoney’s awards period.
|Christie Chu, OCBC|
First was its focus on SMEs run by one or two people (seven out of 10 businesses in Singapore fall into this category). OCBC launched an instant account-opening service for these businesses, thanks to which the SMEs can complete an online application for an account quickly, know the results of their application instantly and receive their new business account number on the spot.
Since its launch in November 2018, the acquisition of clients through this online platform has doubled, and 47% of all accounts opened at OCBC are now done through digital-enabled account opening.
Christie Chu, who is head of emerging business and commercial bank cash, global commercial banking, also points to the ease with which SMEs can now get new loans. The application process for loans of under S$100,000 ($72,000) now takes under five minutes, thanks to a new online scheme that OCBC kicked off in March this year. Its appeal was instant. In just three weeks, the bank tripled the number of online loan applications, receiving more than 200 submissions.
The bank took things up another notch in August, when it said SMEs would be able to receive in-principle approval for loans within an hour, compared to two working days in the past.
Trade finance applications have also been made easier, with SMEs now able to apply online for letters of credit, bank guarantees and invoice financing, among other things.
Best Corporate & Investment Bank: DBS
DBS, led by chief executive Piyush Gupta, stands out in Singapore’s corporate and investment banking market, making it the natural winner of this award this year.
|Piyush Gupta, DBS|
First, consider the numbers. During the awards period, DBS was the market leader in Singapore in terms of revenue earned from investment banking, with $52 million and a 14.3% market share, according to Dealogic.
In the Singapore debt markets bookrunner league table, it came top in terms of volume, with nearly $7 billion in credits and a market share of about 25%. OCBC, in second place, had $3.7 billion in credits and market share of 13.2%.
It is a similar story in loans and equity capital markets, too. DBS ranked second in the loans bookrunner league table for Singapore (behind ING), with a 7.6% market share. On ECM, it also came second (after Goldman Sachs) with nearly one fifth of the volume and credits for $1.2 billion.
One of the common criticisms made against DBS is its aggressive use of its balance sheet to win business. Even so, under the leadership of Seat Moey Eng, managing director and head of capital markets, DBS boasts an enviable roster of clients. Given the Singapore market is small, Eng and her team have focused on bringing real estate investment trust assets from the US, Japan and Europe to list in Singapore. This year DBS worked on all three Reit IPOs featuring US assets in Singapore – Prime US Reit, ARA US Hospitality Reit and Eagle Hospitality Reit.
It also worked on numerous secondary share offerings, for example for Frasers Centrepoint Trust, Suntec Reit and Keppel Infrastructure Trust.
In the bond market too, DBS ran a number of deals successfully. Whether it was helping Singapore’s government-owned investment company Temasek tap the local currency bond market and the securitization market, or bringing international banks to the Singapore dollar bank capital market, or working with big companies such as China General Nuclear Power Corp, DBS was among the go-to banks.
Its distribution capabilities have gone from strength to strength too, thanks to the close collaboration between the investment bank and the private bank – something that also stands out in the way that Credit Suisse, one of the top contenders for this award, runs its business. DBS leverages its private banking clients to drum up demand for both equity and bond deals.
Best International Bank: Citi
For the third year running, Citi’s unparalleled breadth and depth in Singapore makes it Asiamoney’s best international bank for 2019.
Total net income for the three Citi entities in Singapore was S$1.1 billion ($792 million) in 2018, up about 9% from the previous year.
|Amol Gupte, Citi|
Citi Singapore Ltd, under which the firm runs its consumer banking operations, reported a 14% jump in net income to S$606 million, while at Citi Singapore, the fully licensed arm consisting of the institutional client group, it rose 16.5% to S$229 million.
But Citicorp Investment Bank (Singapore) Ltd, under which the US bank books its investment banking and capital markets deals, reported a 5% fall in net income to S$276 million. Return on assets grew to 6% last year, from 4% in 2017.
The investment banking division won some notable deals. On the M&A front, it was the exclusive financial adviser to ST Engineering on its acquisition of MRA Systems, in a deal worth $630 million, and it advised ESR-Reit on its merger with Viva Industrial Trust, the first real estate investment trust merger in Singapore.
Other deals include Mapletree Logistics Trust raising $274 million from an equity placement, Clifford Capital bagging $300 million from a RegS bond and Singapore’s government-owned Temasek raising about $1.4 billion with a 10-year bond.
Away from investment banking, Citi showed outstanding performance across various other divisions under Amol Gupte, its country officer for Singapore and head of Asean.
Trade volumes at Citi surpassed $10 trillion last year across FX spots, forwards, swaps and options. As Singapore continued to build its reputation as a wealth management centre, Citi positioned itself well to capture those opportunities, recording assets of $249 billion last year. Citi Private Bank, meanwhile, saw assets under management climb more than 32% as of December 2018.
Things were no different at the bank’s consumer banking operations. In addition, Citi’s mobile-first strategy is paying off, thanks to an increase in usage of its app. Downloads soared 100% last year over 2017, while the number of app users increased 61%.
Best Digital Bank: UOB
The best digital bank award is always hotly contested, especially in Singapore where banks are striving to be the digital champions in the face of competition from fintech firms.
UOB upped its game in 2019, making it the hands-down winner in this category. The advances really began in April 2018, when UOB launched Avatec, a joint venture with China’s Pintec Technology Holdings, a data specialist that focuses on providing credit underwriting models.
It was followed by a partnership in July 2018 with Israel-based Personetics, bringing AI-powered capabilities to the fast-growing digital bank user population. UOB said at the time that Personetics’ capabilities would “accelerate the bank’s use of AI”, and help it to anticipate what customers wanted.
UOB also started working with Grab, an online platform with services ranging from ride-hailing to food delivery, in November 2018. As part of their agreement, UOB will be Grab’s banking partner. The first of their joint initiatives kicked off in January with Grab offering UOB card services directly on its app.
Under Dennis Khoo, head of regional digital bank and digital banking, UOB has also partnered with numerous other firms, including e-commerce platforms Qoo10 and OctoRocket.asia. In addition, the bank’s investment banking team has championed CapBridge, an initiative focusing on private capital, while UOB's business banking and commercial banking teams are behind Synagie Corp, which helps SMEs expand into and manage multiple online sales channels better.
In addition to that, UOB unveiled a new digital bank in the summer of 2018, which it says will help it add up to five million new customers across five Asean markets.
UOB is certainly ambitious with its digital strategy, and it is giving recurring champions such as DBS a run for their money. For embarking on this radical transformation, and for not shying away from tying up with fintech rivals to meet its objectives, UOB stands out.
Best Private Bank: Credit Suisse
Credit Suisse has always had a strong private banking business, not just in Singapore but across the world. This year was no different, making the Swiss firm our pick for the best private bank in Singapore.
|Benjamin Cavalli, Credit Suisse|
Under Benjamin Cavalli, Singapore chief executive and head of private banking for southeast Asia, Credit Suisse’s private banking business has recorded impressive growth.
As of the first quarter of 2019, assets under management showed a three-year compound annual growth rate of 15%, while net new assets rose by a CAGR of 64% over the same period. Net revenues at the private bank in Singapore got a 13% CAGR boost over the last five years, while pre-tax income rose 14%.
Credit Suisse boasts banking more than 60% of the Forbes Singapore billionaires list and has managed to attract 11 new Forbes clients in the last two years.
When it comes to collaboration between the private banking arm and the investment bank, no bank does it better than Credit Suisse. So much so that bankers at the firm call the private banking arm their “secret weapon” when it comes to both winning mandates and executing deals.
The bank has also jumped on the digital bandwagon. In October last year, it made Apple Business Chat available to its digital private banking clients with accounts in Singapore and Hong Kong, giving them a new way to communicate with the bank directly using the messages app on the iPhone or the iPad.
That digital focus caters well to the bank’s growing next-generation clientele. Credit Suisse has a next-gen platform that supports clients in all their plans, from laying out their wealth management strategy to grooming business successors taking over the family legacy.
The Swiss bank is not resting on its laurels, however. The private banking team works closely with global markets too, say bankers at the firm. Why? When families sell their businesses and create family offices, they require prime and brokerage services as they seek opportunities in the market. Credit Suisse is well positioned to cater to their demands.
Best Bank for CSR: DBS
Corporate and social responsibility is not simply about supporting the issuance of green bonds or loans. It goes far beyond that – something that DBS has understood and has worked towards.
|Mikkel Larsen, DBS|
The bank focuses on three pillars around sustainability: responsible banking, responsible business practices and creating social impact. For starters, DBS has extended its participation in sustainability linked loans to more than S$600 million ($432 million). It began with agribusiness Olam, which bagged Asia’s first such club loan in March 2018, to eventually working with the likes of Wilmar and CapitaLand, as well as Taiwan’s AU Optronics and Singapore’s Chew Agriculture. Chew’s financing was the first sustainability linked loan to an SME in Singapore.
What differentiates DBS from its peers is the breadth of its CSR efforts, led by Mikkel Larsen, its chief sustainability officer.
While traditionally, banks tend to focus on wholesale banking when it comes to CSR, DBS has gone a step further by also pushing on sustainability in retail banking, helping customers understand how much carbon emissions are produced from their use of banking services.
When it comes to its business practices, it has turned its attention to improving gender diversity in the technology sector. Even within the organization, diversity is a key focus, with more than 50% of DBS’s total workforce, and 40% of senior management jobs, held by women at the end of 2018. Its environment footprint is also carefully monitored.
DBS also finds ways to create social impact, for example by providing mentorship programmes for SMEs, giving migrant workers easier access to banking, and organizing volunteering events for its staff.
Its efforts have paid off many times over. In October 2018, DBS became the first southeast Asian bank to be included in the Dow Jones Sustainability Index for Asia Pacific. In March this year, it was the first Singaporean bank to issue a standalone sustainability report.