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Bank on more growth
Behold 2007: the year that Asia’s banks flexed their muscles. From here on in, people from Peoria to Peru should know Asian banks as household names – be it ICBC, ICICI or Bank of China. The world is now their stage.
Consider ICBC’s announcement that it will buy 20% of South Africa’s Standard Banking Group for $5.5 billion in a deal that gives the Chinese bank a foothold on a continent emerging as a strategic trading partner for China.
Analysts commented favourably on the benefits that could accrue to ICBC from the expansion of its footprint to Africa, a country where China is looking to develop business as it seeks sources of raw materials. As long as ICBC holds 12% or more of Standard Bank, it is entitled to nominate two directors to the Standard Bank board – including the vice chair. The nominee directors will also participate in key decisions such as credit and audit.
By any standard ICBC, which tops our list by net profit, is a mega bank. It has a market capitalisation of $319 billion, more than 16,000 branches in China, nearly 100 branches elsewhere in the world and 2.5 million corporate and 180 million personal bank customers. It was publicly listed in October 2006, raising $21.9 billion in new equity in the largest initial share sale ever.
The question is “what’s next for China’s big banks?”
Will we start seeing them take more and more strategic and financial stakes in banks around the world? After all, another landmark agreement was Citic Securities and Bear Stearns’s decision to form a strategic partnership, which includes $1 billion of cross-holdings, a joint venture to service Asia and a focus on offering investment banking services in China.
Another strategic alliance of banks in the region – this one including two banks on our list – is the potential move by HSBC to buy a majority stake in Korea Exchange Bank for about $5 billion.
And when our big banks aren’t out on shopping sprees, they are raising capital. Consider India’s ICICI, which was notable for approaching the market multiple times in 2007 to raise money. While it has its critics – some say the bank effectively dried up fund-raising for others – in September, ICICI took the market by surprise when it succeeded in raising $2 billion in bonds, a significant upsize to the expected initial benchmark deal of between $500 million and $1 billion. This, during such volatile times – it was at the height of the credit crunch. The five-year transaction for the Indian bank, managed by Deutsche Bank, Merrill Lynch and Goldman Sachs, attracted $6.05 billion in demand and priced with a coupon of 6.625%, a yield of 6.645% and a price of 99.916. A total of 214 investors participated in the transaction, with 32% of the bonds selling to banks, 53% to fund managers, 12% to pension funds and 3% to retail investors. Meanwhile, bookrunners allocated 16% to European accounts, 37% to Asian buyers and 43% to US investors.
And there were other notable ICICI bonds. In January 2007, it successfully raised a record $2 billion through a new 3-year FRN due 2010, a new five-year fixed rate issue due 2012 and a 15NC10 Upper Tier II tranche. The order book totalled $8 billion with 223 accounts. Three months later, in March it became the first Indian bank to issue a benchmark sized floating rate Euro issue.
Staying with the debt capital markets theme and financials in the region, Export-Import Bank of Korea, better known as Kexim stood out with one of the largest euro deals ever done in South Korea. The issue was almost two times oversubscribed with an order book of 2.4 billion and 60 investors including more than 20 new investors.
It’s quite clear that banks in the region plan to grow – and that will keep the financial sector of the FA100 well represented.
Ranking by total assets |
| Country |
Company |
(million $) |
| CH |
ICBC |
1,008,071.00 |
| CH |
China Construction Bank |
731,478.00 |
| CH |
Bank of China |
715,253.00 |
| HK |
HSBC Holdings |
406,348.00 |
| SK |
Shinhan Financial Group |
238,213.00 |
| SK |
Woori Finance Holdings |
233,407.00 |
| CH |
Bank of Communications |
230,846.00 |
| SK |
Kookmin Bank |
212,468.00 |
| IN |
State Bank of India |
206,635.00 |
| SP |
DBS Bank |
136,284.00 |
| CH |
China Merchants Bank |
125,406.00 |
| HK |
Bank of China (Hong Kong) |
119,802.00 |
| SK |
Industrial Bank of Korea |
116,831.00 |
| SP |
United Overseas Bank |
111,385.00 |
| SP |
OCBC |
104,416.00 |
| CH |
China Life Insurance |
102,622.00 |
| IN |
ICICI Bank |
87,365.81 |
| HK |
Hang Seng Bank |
86,285.90 |
| SK |
Korea Exchange Bank |
76,454.66 |
| TW |
Mega Financial Holding |
69,053.27 |
| MK |
Malayan Banking |
67,313.30 |
| CH |
Ping An Insurance |
66,362.40 |
| TH |
Bangkok Bank |
47,591.45 |
| SK |
Hana Financial Group |
8,591.54 |
| TW |
Cathay Financial Holdings |
NA |
| |
| Ranking by assets growth |
| Country |
Company |
|
| CH |
Ping An Insurance |
54.60% |
| IN |
ICICI Bank |
37.10% |
| CH |
China Life Insurance |
36.70% |
| SK |
Woori Finance Holdings |
28.80% |
| CH |
China Merchants Bank |
27.20% |
| SK |
Hana Financial Group |
23.40% |
| CH |
Bank of Communications |
20.80% |
| SK |
Industrial Bank of Korea |
20.00% |
| CH |
China Construction Bank |
18.80% |
| HK |
HSBC Holdings |
17.90% |
| IN |
State Bank of India |
17.00% |
| MK |
Malayan Banking |
16.80% |
| CH |
ICBC |
16.30% |
| HK |
Hang Seng Bank |
15.20% |
| CH |
Bank of China |
12.40% |
| SP |
OCBC |
12.30% |
| HK |
Bank of China (Hong Kong) |
11.80% |
| SK |
Shinhan Financial Group |
11.70% |
| SP |
United Overseas Bank |
11.20% |
| SP |
DBS Bank |
9.50% |
| SK |
Kookmin Bank |
8.10% |
| SK |
Korea Exchange Bank |
6.90% |
| TH |
Bangkok Bank |
6.80% |
| TW |
Mega Financial Holding |
1.60% |
| TW |
Cathay Financial Holdings |
NA |
| |
| Ranking by net profit |
| Country |
Company |
(million $) |
| CH |
Industrial & Commercial Bank of China (ICBC) |
6,613.70 |
| CH |
China Construction Bank |
6,218.86 |
| CH |
Bank of China |
5,750.05 |
| HK |
HSBC Holdings |
4,863.14 |
| SK |
Kookmin Bank |
3,403.17 |
| CH |
China Life Insurance |
2,679.15 |
| SK |
Woori Finance Holdings |
2,233.92 |
| SK |
Shinhan Financial Group |
2,017.79 |
| HK |
Bank of China (Hong Kong) |
1,806.41 |
| SP |
United Overseas Bank |
1,774.57 |
| CH |
Bank of Communications |
1,647.82 |
| SP |
DBS Bank |
1,566.73 |
| HK |
Hang Seng Bank |
1,552.48 |
| SP |
OCBC |
1,382.37 |
| SK |
Hana Financial Group |
1,188.45 |
| SK |
Industrial Bank of Korea |
1,159.35 |
| IN |
State Bank of India |
1,151.08 |
| CH |
Ping An Insurance |
1,052.27 |
| SK |
Korea Exchange Bank |
1,022.27 |
| CH |
China Merchants Bank |
912.11 |
| MK |
Malayan Banking |
841.85 |
| IN |
ICICI Bank |
699.78 |
| TH |
Bangkok Bank |
568.92 |
| TW |
Mega Financial Holding |
510.16 |
| TW |
Cathay Financial Holdings |
331.36 |
| |
| Ranking by ROE |
| Country |
Company |
|
| HK |
Hang Seng Bank |
26.88% |
| SK |
Industrial Bank of Korea |
20.23% |
| CH |
Ping An Insurance |
19.75% |
| SK |
Woori Finance Holdings |
18.75% |
| CH |
China Life Insurance |
18.14% |
| SK |
Kookmin Bank |
18.03% |
| MK |
Malayan Banking |
17.63% |
| SP |
United Overseas Bank |
17.10% |
| SK |
Shinhan Financial Group |
17.04% |
| HK |
Bank of China (Hong Kong) |
17.02% |
| CH |
China Merchants Bank |
16.74% |
| SP |
OCBC |
16.39% |
| IN |
State Bank of India |
15.96% |
| HK |
HSBC Holdings |
15.73% |
| SK |
Korea Exchange Bank |
15.43% |
| SK |
Hana Financial Group |
15.29% |
| CH |
China Construction Bank |
15% |
| CH |
Bank of Communications |
14.15% |
| CH |
Bank of China |
14.06% |
| CH |
ICBC |
13.64% |
| SP |
DBS Bank |
12.78% |
| TH |
Bangkok Bank |
12.42% |
| IN |
ICICI Bank |
11.95% |
| TW |
Cathay Financial Holdings |
NA |
| TW |
Mega Financial Holding |
NA |
| |
| Ranking by total points |
| Country |
Top financial company |
Total Points |
| SK |
Woori Finance Holdings |
23 |
| CH |
Industrial & Commercial Bank of China (ICBC) |
20 |
| CH |
China Construction Bank |
20 |
| CH |
China Life Insurance |
19 |
| CH |
Ping An Insurance |
18 |
| CH |
Bank of China |
16 |
| HK |
HSBC Holdings |
15 |
| SK |
Kookmin Bank |
14 |
| SK |
Industrial Bank of Korea |
12 |
| SK |
Shinhan Financial Group |
11 |
| HK |
Hang Seng Bank |
10 |
| IN |
ICICI Bank |
9 |
| CH |
Bank of Communications |
8 |
| CH |
China Merchants Bank |
6 |
| SK |
Hana Financial Group |
5 |
| SP |
United Overseas Bank |
4 |
| MK |
Malayan Banking |
4 |
| HK |
Bank of China (Hong Kong) |
3 |
| IN |
State Bank of India |
2 |
| SP |
DBS Bank |
1 |
