Best Domestic Commercial Bank: DBS
Is John Olds the Steve Jobs of Singaporean banking? We think so. The remodelling of Development Bank of Singapore (DBS) that has gone on since Olds arrived is truly remarkable. After a long and successful career with JP Morgan, he came to DBS a rejuvenated man, with a mandate to convert a powerful but stuffy bank into a regional powerhouse to compete with HSBC. Until Olds arrived it looked to be one initial short of a chance. Not any more.
It has been one of the few Singaporean entities to be successful in making acquisitions around the region. In the Lion City itself it is a veritable powerhouse, especially after the integration of Posbank. Its new look and image is typified by its annual report, which far from the stuffy rubbish of old. It looks like a magazine and is actually readable û a great achievement for any annual report, given they are normally an insomniacÆs best friend.
The results speak for themselves. In 1999 the groupÆs operating profit was up a stellar 75% to S$1.9 billion ($1.09 billion), while it showed its new innovative approach as it set about restructuring its top-heavy capital base using $750 million of tier-2 subordinated debt. It has also been doing its bit to beef up SingaporeÆs claims to be AsiaÆs premier financial centre. It has been hiring treasury experts from JP Morgan and elsewhere to take its offerings to the next level. It also plunged into the new local bond market with what can only be described as gusto, topping the league table in 1999 with 14 deals worth S$2.9 billion.
With DBS Thai Danu bank in Thailand, DBS Buana in Indonesia, a 19.7% stake in the largest bank in the Philippines and DBS Kwong On Bank in Hong Kong, this is a bank with a real regional footprint. The only thing it is yet to do well is tell its regional story to those outside Singapore. It is a definite laggard in this respect. The annual report is great. But there is much more to this than an annual report.
Best Foreign Commercial Bank: Citibank
CitibankÆs excellent performance in Singapore is all the more remarkable given that it only has three branches. With its 2,800 employees, the Lion City is home to a state-of-the-art processing center. When FinanceAsia visited, it was being run by a highly driven Indian (most of the best Citibankers seem to be Indian) and left us impressed by the number of screens that told you how few failed trades there were.
As a mark of the Monetary Authority of SingaporeÆs confidence CitibankÆs ability, it is the sole settlement bank for the US dollar clearing system in the city state, and has been a primary dealer in the government bond market since 1987. Its treasury operation is bigger than the Titanic but infinitely more watertight. It contains 200 dealing positions and sees a daily forex flow of around $20 billion. In cash management operations also excel, and it has 16% of cheque flows and 18% of giro flows. Frankly speaking, need we go on?
Best Domestic Investment Bank/ Securities Firm: GK Goh
We had already decided to allocate this award to the merged GK Goh and Vickers Ballas, which promised to be something of a powerhouse. Luckily the thing unravelled before we made the award, and thus spared us some embarrassment. For those close to the deal, embarrassment is less the issue than sheer frustration that the deal did not go through and create a firm with $600 million of shareholder funds.
Of the two, GK Goh is again selected by FinanceAsia as the top securities firm in Singapore. It is still the largest by brokerage market share thanks to its previous (and successful) merger with Lee & Company. Its market share exceeds 10%. It is run by the personable, charming and capable Goh Geok Khim who founded the firm in 1979. Its independent research is what really sets the firm apart, as well as its deep penetration of the retail market. Around 220 remisiers ensure that the firm has a foothold that no one else can match. Its new website, GohDirect, will further enhance its penetration and enhance the firmÆs regional strategy.
Best Foreign Investment Bank: Citigroup/Salomon Smith Barney
Completing CitibankÆs sweep in Singapore, we give the investment banking award to the all-singing, all-dancing integrated powerhouse. It is well deserved, given the all-round capabilities the marriage has brought. With 140 professionals in Singapore, Salomon has really been beefing up its presence and brokerage turnover. Its research has soared in quality throughout the region, and Singapore has been a direct beneficiary of this.
CitibankÆs equity capital markets business has also benefited and in Singapore the deals have been flowing thick and fast. They have included: Chartered Semiconductor ($1 billion), STATS ($411 million), as well as gutsy share placements for Singapore Airlines, Delta and Sair valued at $652 million.
In July 1999 Citibank also led the deal for Neptune Orient lines, which then saw its market capitalization increase 62% in five weeks û a fact that kept investors smiling.
In the field of M&A the bank was also active, advising APP on the sale of a stake in three power plants to Singapore Power. It also advised SingTel on the sale of its 19.5% stake in NorwayÆs NetCom ASA to TeleDanmark. On the debt side, Citibank has been a major contributor to the development of the Singapore dollar debt market.
Its role as a dealer for Jurong Town Corporation and Housing & Development Board account for 59.3% of issues to date, while it also notably brought the first callable sub-debt deal to town with its S$100 million issue for SEB of Sweden. As a mark of the firmÆs commitment to Singapore it is moving its regional head of local debt markets, John Pitfield, to the city. If his business continues to kick the way his first serve does, then everyone else better watch out.