Asiamoney best bank awards 2019: Thailand
Best Domestic Bank: Siam Commercial Bank
The Thai banking sector had another difficult year in 2018 thanks to a relatively slow economy, the high costs of digital rollouts and muted activity in the local capital markets.
|Arthid Nanthawithaya, Siam Commercial Bank
Choosing a domestic winner was not easy: perennial favourites Kasikornbank and Siam Commercial Bank continued to make solid gains, and even laggard Bangkok Bank flexed its muscles and improved its financial performance. But SCB, led by chief executive Arthid Nanthawithaya, wins because of its relative outperformance and its timely ability to adapt to changing market conditions.
SCB is Thailand’s oldest local bank and one of the nimblest. The Bangkok lender reported a net profit of Bt40.1 billion ($1.3 billion) in 2018, the highest in the industry. Its return on equity was an impressive 10.8%, beating both Kasikornbank (10.6%) and Bangkok Bank (8.7%): SCB also beat its rivals in terms of return on assets.
Then there is the bank’s ambitious digital transformation. It aims to slash the number of branches from the current network of 1,019, raise productivity and position the bank for the new digital era.
Analysts certainly like what they see.
“We believe SCB is well positioned to benefit from branch rationalization,” says one Bangkok director of research. “Revenue could accelerate as the bank tries to monetize investments it has made in the past two years.”
SCB’s proven investment banking capabilities also played a part in winning this award. The bank has a team of 70 bankers providing investment solutions for its clients.
Best Bank for SMEs: Bank of Ayudhya
Thailand has roughly three million small and medium-sized enterprises that account for about 40% of GDP and employ a disproportionate share of the workforce. It is no surprise then that local commercial banks fight hard for a share of the SME market.
Bank of Ayudhya, known locally as Krungsri, ranks fifth in terms of assets, but when it comes to SMEs, it packs a fair punch.
|Seiichiro Akita, Krungsri
Krungsri’s loans to SMEs grew 16.6% in 2018, the highest level of any bank, while its supply chain loans rose 17.5% from a year earlier. Other metrics look good, with non-performing loans for the SME segment falling from 4.2% to 3.8% over the review period, despite the challenging business environment and fierce competition.
The outstanding results reflect the bank’s core strengths, its track record on innovation and efficient asset management. Of course Krungsri, led by chief executive and president Seiichiro Akita, has one very big advantage over peers: its big shareholder is Mitsubishi UFJ Financial Group (MUFG), which acquired a 72% stake in the bank back in 2013. This has given Krungsri the edge when it comes to establishing close links to Japanese companies, not only in Thailand but also in the neighbouring countries of Cambodia, Laos, Myanmar and Vietnam. MUFG’s global network enables Krungsri to enhance supply-chain services and upgrade the efficiency of trade-finance services.
The Bangkok lender continued to develop its blockchain Interledger technology to support Thai entrepreneurs, reducing international money transfer times to just a few seconds, rather than days.
The new financial technology not only increases efficiency and transparency, but also provides better access to financing for small businesses.
Best Corporate & Investment Bank: Bangkok Bank
Bangkok Bank has a long history as a big player in Thai banking, with an impressive roster of corporate clients and an unrivalled international network of 32 international offices spanning 15 countries.
|Chartsiri Sophonpanich, Bangkok Bank
While it has been overshadowed by its nimbler rivals Kasikornbank and Siam Commercial Bank in some areas, when it comes to capital markets and corporate business, Bangkok Bank is still at the top of the game.
Under its veteran president Chartsiri Sophonpanich, it ranks second in Thailand’s debt capital markets, according to Dealogic, with 46 deals worth $3.8 billion in the 12 months from June 2018 to May 2019. It was also firmly positioned in the top tier of the ECM league with four deals worth $281 million.
The bank featured in several standout transactions. It was joint lead arranger for a Bt13.6 billion ($440 million) bond offering by EDL-Generation Public Company, the leading electricity producer in the Lao People’s Democratic Republic. This was the largest-ever and the longest-ever tenor debenture issuance for a big hydropower project in Lao PDR.
Through its subsidiary Bualuang Securities, Bangkok Bank also made its mark in equities, despite relatively poor sentiment. In October, Bualuang acted as financial adviser and joint lead manager for the IPO of Osotspa PCL, a manufacturer of consumer products, with a total offer size of Bt15.1 billion.
Building on its reputation as one of the best ECM houses, Bualuang Securities completed four big-lot transactions, with a combined offering size of Bt9.5 billion and an average price discount of only 2.6%. These four transactions represent 38% of the total value of all accelerated placements during the period under review.
For its financial and advisory work, its big-ticket investment deals and presence in the corporate market, Bangkok Bank is a worthy winner of the best corporate and investment bank award.
Best International Bank: Citi
Thailand has never been an easy market for foreign banks to crack: just witness the sale by Standard Chartered Bank of its retail lending business to Tisco Financial Group at the end of 2016. So all the more credit to Citi, which not only stayed for the duration, but has transformed itself into a powerhouse.
|Tibor Pandi, Citi Thailand|
With only three full-service branches in the country and a further 31 Citi network branches, the bank was able to notch up a net profit of $142 million for the 2018 financial year. Return on equity was an impressive 16.8% at the end of the year, the highest in its peer group. Citi can justifiably claim to be the only foreign bank with consumer banking businesses and a leading position in credit cards and digital banking.
“Citi (Thailand) has shown that it is possible for a well-disciplined and well-managed bank to operate extremely profitably despite the regulatory challenges faced by all the foreign banks,” says one senior bank analyst in Bangkok.
Citi’s 2,200 local employees provide banking solutions to more than one million customers. Its formidable network of clients includes the government and related entities, global multinationals, leading local corporates and financial institutions, as well as globally minded consumers.
Led by country head Tibor Pandi, Citi has plenty of other strings to its bow. During the awards period, it served as joint dealer-manager for PTT Global Chemical Public Company’s inaugural liability management transaction targeting its $1 billion 4.25% notes due September 2022.
And Citi showed its colours by acting as joint global coordinator and joint lead manager for Bangkok Bank’s successful issue of $1.2 billion of senior unsecured notes, split equally across 5.5-year and 10-year tranches.
Best Digital Bank: United Overseas Bank (Thai)
United Overseas Bank Thailand is something of a minnow in the local banking scene. It has total assets of Bt557 billion ($18 billion), less than one fifth of the size of Siam Commercial Bank and Bangkok Bank, and 150 or so branches. Under chief executive and president Tan Choon Hin, the bank is blazing a trail on the digital front.
|Tan Choon Hin, UOB Thai|
Earlier this year, it rolled out TMRW, the first mobile digital bank in Asean as part of its strategy to target Thailand’s digital generation. This new market segment, the bank says, accounts for roughly one third of the country’s population.
TMRW makes banking simpler, more transparent and more engaging. For a start, customers can open a bank account and authenticate their identities without even having to visit a branch. It’s as simple as uploading a photo ID-card and filling in a few online forms.
Then there is TMRW’s intuitive and frictionless app that is personalized to each customer’s needs. The ground-breaking system is powered by next-generation artificial intelligence with data analytics. UOB expects between 500,000 and one million Thai users to sign up by the end of the year.
Thailand’s hip digital generation is not the only market that UOB is targeting. The bank also wheeled out BizSmart, a cloud-based digital solution that helps small and medium-sized enterprise customers to reduce routine administrative tasks such as accounting, payroll and employee management. In just a few months, over 4,000 customers have taken advantage of BizSmart, proving that the lender can match the best in the business.
Best Private Bank: Phatra Securities
Private banking is one of the sweet spots in Thailand’s banking industry. The combined wealth of the nation’s richest people is expected to top $400 billion in 2020, yet this pool of high net-worth individuals still remains relatively untapped.
|Aphinant Klewpatinond, Phatra Securities
Several big foreign names have come knocking on the door. Swiss private bank Julius Baer formed a joint venture with Siam Commercial Bank in 2018, while Lombard Odier has a partnership with Kasikornbank.
Then there is Credit Suisse, which has raised the bar with its outstanding onshore and offshore private banking services.
That has done little to rein in industry leader Phatra Securities, part of the Kiatnakin Phatra Financial Group. A full-service investment bank, Phatra ¬– under chief executive Aphinant Klewpatinond – continues to go from strength to strength.
During the last 12 months, despite not-so-favourable market conditions, Phatra Wealth Management achieved new milestones on several counts. Assets under management hit a high of Bt525 billion ($17 billion), an 11% increase from the previous year. For 2018, Phatra notched up total revenue of Bt1.1 billion, a rise of 19.1%.
To help its clients navigate increasingly volatile markets, while with a vast selection of products, Phatra Wealth Management has expanded its advisory scope to cover global markets across all asset classes.
The firm benefits from full access to the resources of long-time research partner, Bank of America Merrill Lynch. Moreover, with multiple global product partners, ranging from fund houses to investment banks willing to provide market and investment views, Phatra prides itself on being able to form its own views and come up with high conviction calls more efficiently.
Best Bank for CSR: TMB Bank
|Piti Tanthakasem, TMB
TMB Bank is in a class of its own when it comes to making a difference to the lives of under-privileged children and communities in Thailand. Led by chief executive Piti Tantakasem, TMB ranks as the seventh-largest commercial bank by assets. It launched a programme known as Fai-Fah (‘the power of giving’.) in 2009, with the aim of helping poor community children to unleash their full potential.
The first Fai-Fah Learning Centre was established in Bangkok in 2010. The TMB Foundation has since opened another three learning centres across the capital. Children aged between 12 and 17 can sign up for arts and life skill classes such as music, singing, taekwondo, painting and cooking for free. TMB employees and professionals train and coach the children, helping the most vulnerable in society.
In 2018, this outstanding programme inspired approximately 150,000 community kids, reached through Fai-Fah learning centres as well as hundreds of other schools.
The Fai-Fah programme has since been extended to include other community projects. Last year, more than 3,000 TMB employees nationwide volunteered to join 37 community projects. The focus of these projects ranged from promoting improved health and environment to better education and a better life for disabled and elderly people.