Asiamoney best bank awards 2020: Hong Kong
Best Domestic Bank: Hang Seng Bank
|Louisa Cheang, Hang Seng Bank|
Hang Seng, led by chief executive and vice-chairwoman Louisa Cheang, pays close attention to customer behaviour, and this has helped it to prosper in Hong Kong’s highly competitive retail banking market.
Last year, for instance, the bank unveiled digitally enabled branches in Hong Kong. These provide e-ticketing for counter services so that customers do not need to queue up inside the branch, and digital service bars where they can get help moving more of their banking online.
Those efforts worked in its favour this year when social distancing measures were enforced after the coronavirus outbreak and numerous branches were shut for months.
The bank takes customer feedback seriously. Hang Seng’s survey of about 1,000 Hong Kong customers showed that the majority still used a notebook or a computer spreadsheet to manage their personal finances, mainly because of a lack of user-friendly digital book-keeping tools.
In March, Hang Seng held a soft launch of an in-app savings and budgeting tool, linking its clients’ income and savings goals directly with their Hang Seng bank and credit card accounts, thus saving them the job of manually entering each of their expenses. This has been a particular benefit for the bank’s army of small and medium-sized enterprise clients and entrepreneurs, offering them an efficient way to manage their finances.
Hang Seng’s overall business fired on all cylinders in 2019. Operating profits rose 2% last year to HK$28.6 billion ($3.7 billion), while earnings per share were up 2% as well to HK$12.77. Net operating income jumped 6% and net interest income 7%. Wealth and personal banking grew, as did commercial banking and global banking.
The bank’s capital levels are in decent shape too. Common equity tier-1, tier-1 and total capital ratios stood at 16.9%, 18.7% and 20.8% respectively, in 2019, putting Hang Seng ahead of its peer, Bank of East Asia, which reported ratios of 15.6%, 18.4% and 20.4% respectively.
Best Corporate and Investment Bank: HSBC
|Deborah Leerhsen, HSBC|
HSBC excelled in corporate and investment banking in 2019, despite a particularly difficult year for the local market, with daily demonstrations that not only brought the city to a halt but also derailed many transactions.
Under the leadership of Deborah Leerhsen, head of global banking for Hong Kong, HSBC dominated the G3 bond market, running deals for the likes of AIA, CK Hutchison Holdings, Sun Hung Kai & Co and the Hong Kong sovereign, as well as infrastructure credits such as NWS Holdings and Road King Infrastructure.
During Asiamoney’s awards period, the bank took the top spot in the G3 bonds bookrunner league table, with apportioned credit of $3.7 billion from 29 deals for Hong Kong-incorporated issues, giving it an 8.5% share of the market.
This put it ahead of Bank of China, with $3.2 billion and 7.4% market share, and well ahead of Crédit Agricole in third place, with $2.9 billion and a 6.7% share, according to Dealogic.
HSBC’s equity capital markets franchise also performed well, thanks to Alibaba Group Holdings’ jumbo secondary listing in Hong Kong, as well as the bank’s role in the listing of Budweiser Brewing Apac for close to $6 billion.
Among the global coordinators and bookrunners of Hong Kong equity capital markets transactions, HSBC came in fifth, taking a 7.3% share of the market, compared with top-ranking Morgan Stanley’s 15.3% share, according to Dealogic.
Last year was undoubtedly difficult for Hong Kong and for banks operating in the city. This year will be no different, after countries that were locked down for months due to Covid-19 take baby steps towards reopening. But HSBC’s global banking and markets business will face even tougher times, given a restructuring in the works for a group-wide reduction in risk-weighted assets by $100 billion and plans to shed 35,000 jobs.
Best International Bank: Citi
|Angel Ng, Citi|
Citi’s importance to Hong Kong and its standing among the city’s largest corporations and families is well established. After all, the US bank has a 118-year presence in Hong Kong. Under Angel Ng, who has been Citi’s Hong Kong chief executive since May 2018, the firm has only cemented its position further.
The numbers tell one side of the story. Citi’s Hong Kong franchise reported revenues of about $2.4 billion between April 2019 and March 2020. Profits before tax were $1.45 billion, while net income was $1.2 billion. Its total assets were $56 billion, while the return on the assets was 2.2%.
Then there is its enviable roster of corporate and investment banking clients, tended by Hong Kong division head Christopher Laskowski. Citi works with blue-chip names such as Li & Fung Group, CK Hutchison Holdings and the Swire Group, as well as financial issuers such as insurance firm FWD and local banking group Bank of East Asia.
Last year, for instance, the bank helped CK Hutchison with a restructuring that involved the creation of CK Hutchison Group Telecom Holdings as well as the issuance of a chunky €4.25 billion and £800 million multi-tranche bond. It was a financial adviser for the $4.3 billion deal to take infrastructure and property firm Hopewell Holdings private, and provided a $2.4 billion acquisition loan for the purpose.
Citi worked on some of Hong Kong’s landmark transactions in 2019, including e-commerce firm Alibaba Group Holdings’ $12.9 billion secondary listing in the city, brewer Budweiser Apac’s $5.7 billion IPO and logistics real estate developer ESR’s $1.8 billion listing.
Its strength is not only limited to commercial and investment banking. With 18 retail branches in Hong Kong and an impressive digital offering, Citi has boosted its retail banking initiatives and, in turn, its financial performance.
Qualified Citigold clients – those with assets under management of $200,000 or more – grew 16% in 2019. About 47% of its credit card accounts were acquired digitally last year, with Citi reporting a 26% year-on-year increase in the number of mobile-active card customers.
Best Digital Bank: Standard Chartered
|Vicky Kong, Standard Chartered|
The digital offerings of banks in Hong Kong have faced two big tests over the last 12 months.
One came from the middle of 2019, when pro-democracy protestors took to the streets nearly every day for months, often clashing with armed riot police. Workers around the city’s central business district also joined in during lunch hours, bringing the business area to a halt on multiple occasions.
The second came this year, when Covid-19 led to a partial lockdown of the city and strict social distancing measures. Both events forced banks to respond to a dramatic change in customer behaviour, in particular greater online engagement. Standard Chartered showed its agility during both periods.
Vicky Kong heads up retail banking for Hong Kong, while Annie Chen leads Standard Chartered’s digital banking and personal segment business. They worked together to ensure the bank’s digital active client base rose 56%, versus average growth of 47% in Hong Kong.
After Covid-19 struck, the use of Standard Chartered’s faster payment system spiked by about 30%.
The bank had also launched remote account opening services for its wealth management clients. Its use jumped 30% in the first quarter compared to the fourth quarter last year.
One notable service to improve customer engagement was My RM, introduced at the end of February. Through this feature, clients could speak to their relationship managers remotely. That proved extremely popular during the virus-linked lockdown.
An additional win was its move to launch QR Cash in early 2019, which allows customers to make cardless cash withdrawals by simply using a QR code. This has gained plenty of traction, with usage growing 38% since kick-off.
Best Bank For SMEs: DBS Bank
Singapore’s DBS Bank has made great headway among small and medium-sized enterprises in Hong Kong. The bank’s offerings for SMEs are not all unique, but their implementation and success stand out.
One way it has achieved this is by opening up DBS BusinessClass, its hugely popular initiative in Singapore, to Hong Kong SMEs and startups. By using BusinessClass, SMEs have a chance to network and expand their businesses.
In March, the Hong Kong unit also launched an online SME academy series, which offers training to SME owners.
DBS, under Hong Kong chief executive Sebastian Paredes, also kicked off a new online loan application system for its SME customers, even conducting online credit checks for urgent financing requirements.
Companies needing trade financing support have something from DBS too. The bank offers an online portal where clients can upload all their supporting documents and applications for everything from letters of credit and trust receipts to bank guarantees.
DBS upped the ante this year as the Covid-19 outbreak hit Hong Kong’s SMEs hard. In February, it launched a number of relief measures for SMEs in line with other banks, including principal-repayment moratoriums on term loans, maturity extension for trade facilities, as well as flexible funding and interest rate discounts for businesses focused on producing medical resources during the pandemic.
In April it also started a fast-track, fully virtual and contact-free account-opening process for SMEs, with video conferencing options available with relationship managers. DBS also tied up with Chinese electronics company Haier Group in April to offer digital financing to distributors in a bid to provide liquidity support for SMEs during the crisis.
Best Bank For CSR: Bank of China (Hong Kong)
|Gao Yingxin, Bank of China (Hong Kong)|
A bank’s corporate and social responsibility effort should start from within.
This was evident in the way Bank of China (Hong Kong) tackled the spread of Covid-19 in the special administrative region this year.
It quickly closed a handful of its branches, implemented work-from-home measures for its staff, gave them special subsidies for travel and virus prevention and boosted their medical coverage. It also promised not to lay off any employees or freeze their salaries in order to help them pull through the economic slump hitting Hong Kong.
BoCHK took an equally rapid approach to helping its customers – both personal and commercial – ride out the challenges posed by the pandemic.
It launched numerous financial support initiatives, including a principal moratorium for mortgage loans, fee concessions and waivers, fully guaranteed loans to local enterprises impacted by Covid-19 and a new loan scheme for small and medium-sized enterprises (SMEs).
The response was immediate. BoCHK, led by chief executive Gao Yingxin, received about 14,000 enquiries by early May for its offerings. It approved 2,200 applications, of which half were from customers seeking a moratorium on their mortgage principal.
BoCHK’s CSR efforts during the crisis were not limited to its staff and clients. It donated HK$15 million ($1.9 million) to local non-governmental organizations, including a hospital group, while also sending medical protection gear to southeast Asian countries.
Away from Covid-19 relief measures, BoCHK has continued to emphasize environmental protection through paperless services and use of renewable energy. In 2019, the bank received a green loan certification from Hong Kong’s Quality Assurance Agency.
BoCHK’s proportion of green and sustainability linked loans rose 7.8 times last year versus 2018.