Best Domestic Commercial Bank: Bank Central Asia
Selecting the best bank in Indonesia is not a task for the faint-hearted. We have chosen Bank Central Asia, which in some respects is not a bank at all but rather a huge vehicle that holds government bonds. The bank's portfolio is 94% in government bonds and only 4% in loans. But that is why we like it.
Investors tend to agree, as is indicated by the success of its $114.9 million privatization in May. Around 30% of the placement was with international investors who view the former Salim-family bank as a good vehicle. Given that its balance sheet is relatively clean - non-performing loans only account for 10% of its loans - it can start afresh and lend to the best credits and help finance a resurgent Indonesia. It has a decent brand and a capital adequacy ratio of over 40%. No wonder Indonesian retail investors bought half of the 22.5% that was privatized.
Best Domestic Securities Firm: Danareksa
With its 350 dedicated staff, Danareksa is a leader in what remains of the local Indonesian capital market. Its market share in debt underwriting is 70% - having led deals for Sampoerna, Astra Agro Lestari, Jasa Marga, Astra Sedaya Finance and Bahera Adimina. With a profit of Rp72 billion ($8.3 million), it has a 20% market share in equity underwriting and was notably involved in the successful listing of Bank Central Asia this year as a joint-coordinator.
Best Foreign Commercial Bank: HSBC
When FinanceAsia called up a major global clothing retailer as part of its research process, we were impressed by what we heard. The client told us that HSBC had constantly impressed throughout the crisis with the innovative ways it found to finance the exports of its suppliers - many of whom still had excellent businesses, but had found that domestic banking lines had shrivelled. That's the kind of praise that really counts.
HSBC has seen a few crises in its time, and that's why it tends to approach these matters with a cool head. It has been in Indonesia since 1884, operates seven branches, and has 1,100 staff.
While it is nowhere near as good as Citibank in penetrating the consumer market (Citi has used a very clever kiosk strategy), it has done enormously well on the corporate side. It signed up 28 new customers in 1999 as Trade Solutions users, and has 32% of total foreign invested assets under custody (although one suspects that is 32% of not very much these days).
HSBC has also won over 400 cash management mandates from local, regional and global firms working in Indonesia since 1999. Included in its presentation was also a glowing testimonial from one of Indonesia's best companies, and that was given due credit.
Best Foreign Investment Bank: CSFB
CSFB is the premier restructuring house in Indonesia. It has three professionals on the ground, plus coverage from Singapore and New York. As a result, it has done two of the largest restructurings to date - for Sampoerna ($257 million) and Satelindo ($749 million). Its equity research is excellent and covers 60% of the country's total market cap. In July 1999 it led the $285 million equity placement for PT Indofood Sukses Makmur, which is still the largest to be done since the crisis.
CSFB has also advised the likes of Sampoerna on its debt repurchase programme, and is currently advising six well-known Indonesian firms (including PT Bimantara Citra) on their debt restructuring exercises.
As a mark of its standing in Indonesia, it took the government and the Indonesia Bank Restructuring Agency (IBRA) on a non-deal roadshow in June and organized a conference with investors. In former times such a roadshow would have been organized by Warburg, Lehman or Lazard - the so-called Troika that has advised the government for 30 years.