The Bank of the Year winners from the Asia-Pacific region. 

Afghanistan: Afghanistan International Bank

Afghanistan remains a challenging market and Afghanistan International Bank (AIB) has continued building on the progress it has made in previous years as well as building its business since the acquisition of Standard Chartered’s operations in Afghanistan. 

Khalilullah Sediq, AIB’s chief executive, believes that the bank’s biggest challenges are the economic, political and security conditions in the country. “With the withdrawal of coalition troops, the lack of a final security agreement, and the presidential election in 2014 there has been a softness in demand for banking services as customers have become more conservative in their outlook,” he says. 

Despite this, AIB has been able to hold a strong position in the market in terms of deposits, total assets and profitability. It has also been working hard to integrate with Standard Chartered’s business in Afghanistan. The acquisition was agreed in 2012 and has broadened AIB’s customer base. 

“This project resulted in a new and significant group of international agencies and companies becoming customers of AIB. This acquisition, along with corresponding organic growth, enabled AIB to grow significantly faster than the industry overall,” says Mr Sediq.

In the past year, AIB has also increased its deposit base, which is perhaps surprising given that the bank does not pay interest and its competitors pay annual interest rates of up to 7%. While the bank witnessed an overall increase in deposits, it also lost some deposits because of the implementation of stricter anti-money laundering procedures. 

In terms of the outlook for the year ahead, Mr Sediq says: “The bank is optimistic that conditions will be more or less stable and business confidence will improve. We therefore foresee opportunities to increase our corporate business post-2014 and to build a larger position in the small and medium-sized enterprise segment,” he says. 

Australia: ANZ Australia

Aside from differentiating itself as an Australian bank with a clear Asia-Pacific strategy, ANZ has also been developing in its home market of Australia. The bank has been developing its channel management, building greater efficiencies and transforming its branch network.

The environment for financial institutions has been challenging, explains Phil Chronican, ANZ’s chief executive for Australia. “Australia’s banks have faced economic headwinds such as subdued lending demand, a high Australian dollar and strong competition for deposits,” he says.

Mr Chronican explains how ANZ has aimed to differentiate itself in the market: “In this environment, ANZ is focused on creating a sustainable advantage by harnessing digital technologies, investing in our people and delivering for customers and shareholders.” 

The bank has made significant progress in its five-year strategy Banking on Australia, an A$1.5 billion ($1.4bn) investment programme that aims to make banking easier for customers. “This includes building capabilities to deliver a more insightful and connected experience for customers and staff, as well as leveraging the connectivity and super regional advantage of ANZ to help customers access increasing trade, investment and population flows across the region. In particular we’ve rolled out new digital and mobile technologies for both our staff and customers,” says Mr Chronican.

The bank has a clear strategy of linking ANZ’s home markets of Australia and New Zealand to countries in the rest of the Asia-Pacific region. “We’ll continue our focus on deepening our relationships with customers by providing them with access to the whole of ANZ, including ANZ’s expertise and insights from across the region. Our goal is for customers to recommend ANZ as the easiest bank to do business with. Our ongoing digital investment programme is central to this,” says Mr Chronican.

Bangladesh: Standard Chartered Bank Bangladesh 

Bangladesh is a market with great potential, but its banking industry has faced a number of challenges in the past year. Jim McCabe, chief executive officer of Standard Chartered Bank Bangladesh, says that volatility and uncertainty in the external environment were just some of the challenges that the bank has had to navigate. Also, the banking sector in Bangladesh has come under and international spotlight, with some local banks being involved in a high-profile scandal. “There were instances of operational control lapses for several banks in Bangladesh, which also affected the banking industry at large,” says Mr McCabe. 

Standard Chartered, although a foreign bank, is deeply ingrained in the Bangladesh market and has had a presence in the country for more than 100 years. It continues to be a leading bank in the country and set the benchmark for the market, not just in terms of its international wholesale banking, but also in its consumer banking operations in the local market. 

Mr McCabe says on the achievements of the bank in the past year: “Standard Chartered processed and provided related financing for 5.24% of the country’s exports and 7.14% of imports. Our bank continues to be a major financier in the power sector of Bangladesh. The consumer banking business has also grown consistently in the past year. While we ensured revenue growth, we also kept on reinvesting in the country to make ourselves competitive, with a focus on customer satisfaction.” 

The Bangladesh economy is expected to grow further, says Mr McCabe, who adds that the banking industry will play a key role in helping the local companies and entrepreneurs succeed. “Standard Chartered will continue to provide innovative and customised financial solutions to our clients and customers, and as the market matures, we will try to migrate best practices here from around the world,” he says. 

Brunei: BIBD

Bank Islam Brunei Darussalam (BIBD) has had a good year and has been active in making a number of improvements to its operations. As well as increasing its Tier 1 capital and witnessing a jump in profits, the bank has also relaunched its service culture and corporate image.

The regulatory environment in Brunei has been somewhat restrictive and the regulatory authority has imposed price and rate controls on local banks, which has been challenging for BIBD as well as the other local players. The Brunei economy has also been sluggish, which dampened expectations of the bank’s performance. Despite these factors, however, BIBD has been able to perform well and has emerged as a recognised brand for both Islamic and conventional banking.

In the face of increasing competition, the bank has had to work on building its brand and making it stand out, especially when its competitors are aggressively marketing their products and services. In this environment, BIBD has worked toward building a new corporate image in the market.

The bank’s strategy has been to focus on acquiring new customers and improving customer experience of BIBD. The bank has redefined its service culture through an initiative that emphasises reliability, innovation and simplicity.

BIBD has also launched a new branch concept, made significant improvements in its IT systems, and has made improvements in efficiency and productivity. The improvements in the IT infrastructure are not just for the consumer banking segment, but also to serve the bank’s corporate customer base. Added to this, the bank has been increasing its revenue from fee income.

The bank has also paid attention to its non-performing loans, gaining new sources of revenue from transaction banking and corporate advisory services and enhancing revenue in its treasury and markets business.

Cambodia: ANZ Royal

ANZ has been bringing innovation to the Cambodian banking market and has been a pioneer in a number of areas, including ATMs and online banking. As well as introducing new instruments to the market – such as hedging instruments – the bank has been focused on staff training and has also increased deposits and its fee income.

As an emerging economy, the Cambodian market is characterised as having significant potential for foreign and local banks, but also carrying volatility and risk. Cambodia is an attractive market for new entrants, which puts pressure on the existing players to retain their staff. This is one of the challenges that Grant Knuckey, chief executive of ANZ Royal, Cambodia, has faced in the past year. “The growth potential of Cambodia’s banking sector has attracted an influx of new market entrants in the past year and this has resulted in intense competition for customers and staff,” he says.

The bank has worked hard on training its staff to an international standard, while also focusing on staff retention. This is just one of the bank’s achievements. Other successes include ANZ Royal becoming the first bank to offer commodity hedging instruments in Cambodia. “This has resonated strongly with local companies who are exposed to international price volatility,” says Mr Knuckey.

Another feature of the market is margin compression and the bank has been focused on increasing its fee and non-lending revenues. For the year ahead Mr Knuckey comments that the bank’s strategy will remain unchanged. “We see opportunities for growth in trade finance, leasing and mortgages in terms of products. In terms of sector, agriculture will be the growth standout by some distance,” says Mr Knuckey. “However opportunity can only be realised through good people and we will continue to put enormous focus on staff development and training. This is the basis of our competitive edge.”

China: ICBC

ICBC ranks highly by almost any measure – whether by the amount of loans, deposits, Tier 1 capital, profits or market capitalisation – not just in China but also at a global level. 

The bank has been expanding its global presence and increasing the network it has developed to support China’s international trade. ICBC currently has operations in 39 countries and regions and in recent months has been involved in a number of acquisitions. In 2012, the bank acquired majority shareholdings in the Bank of East Asia (USA) and Standard Bank Argentina. In April 2013, it announced plans to buy a 20% stake in Taiwan’s Bank SinoPac. 

Such expansion has been challenging, especially given the state of the global and domestic economy. Jiang Jianqing, chairman of ICBC, says of the global economy: “Over the past year, the world’s economic growth outlook has improved, but there were still many risks and uncertainties. Though China’s economic operation remained stable in general, structural contradictions were still apparent.”

At a domestic level, Mr Jiang notes that progress has been made in financial reforms, for example the liberalisation of the interest rate for lending, and new capital regulations. 

The bank has made a number of changes and has made progress, despite the challenges in the external environment. “ICBC committed itself to continue to seek steady advancement,” says Mr Jiang, adding that the bank has maintained a smooth momentum of healthy development. Looking ahead, Mr Jiang says, “The bank will enhance its capability and efficiency in serving the real economy”. 

Of the bank’s other objectives for the months ahead, Mr Jiang says ICBC will enhance its support for small and micro enterprises as well as develop its consumer credit business. “ICBC will drive transformation and development by reform and innovation. It will further shape a diversified and balanced pattern of profit growth, and push forward its business internationalisation and diversification,” says Mr Jiang. 

Hong Kong: Bank of China (Hong Kong)

Bank of China (Hong Kong) has continued to improve its performance over the past year, delivering consistent results as well as developing its transaction banking, wealth management and renminbi businesses. 

Although the bank has been proactive and prudent in its approach, the past year has not been without its challenges. He Guangbei, vice-chairman and chief executive of Bank of China (Hong Kong), says that the tough operating environment was the bank’s biggest challenge in the last year. “Interest rates stayed persistently low and competition became increasingly intense,” he says. 

The bank has performed consistently, and Mr He attributes this to the bank’s balanced growth strategy. In the past year, it has made progress in enhancing its customer experience through product and service innovation, channel optimisation and customer segmentation. The bank also developed its wealth management business and has improved its product suite in transaction banking. Its cash management platform was enhanced with new products and Bank of China (Hong Kong) built closer links with its parent bank, Bank of China. 

Mr He highlights the internationalisation of the renminbi as a particularly exciting opportunity for the bank. “Capitalising on the opportunities arising from policy relaxation, we further strengthened our renminbi franchise and expanded our business,” says Mr He. 

Bank of China (Hong Kong) is the renminbi clearing bank in Hong Kong and as such sits at the heart of renminbi transactions between Hong Kong and mainland China. Mr He says that he sees opportunities in the increasing economic ties between Hong Kong and mainland China, which has been driving more demand for cross-border banking services. 

“We see considerable growth potential given our diversified business platform and close collaboration with Bank of China,” he says. 

India: ICICI Bank

ICICI Bank has continued with its strategy that balances growth, profitability and risk management and has also invested in growing its franchise while also improving customer convenience. This strategy has helped the bank post strong financial results and has brought about an improvement in its net interest margins, a higher return on assets and a healthy loan growth despite the challenging macroeconomic environment. 

This environment has been the biggest challenge for the Indian bank, according to Chanda Kochhar, ICICI’s managing director and CEO. “We have seen continued moderation in [India’s] economic growth to under 5% currently. At the same time, inflationary concerns have persisted limiting the room for monetary policy easing during the year,” she says. 

Ms Kochhar continues: “As a result, there have been implications for credit growth and deposit mobilisation for banks that have also moderated in line with the economic environment. At the same time, given the impact of the macro on the corporate segment, banks have had to calibrate their approach as well as actively monitor existing portfolios in order to manage the risks in this segment.”

In spite of these challenges, in fiscal 2013, ICICI recorded a 29% growth in profit after tax to Rs83.25bn (1.34bn). Also, Ms Kochhar explains, this was the first year in which ICICI achieved full-year net interest margins of more than 3%. The bank has also been focusing on operating efficiency, and in fiscal 2013 it reduced its cost-to-income ratio from 42.9% in fiscal 2012 to 40.5% in fiscal 2013. 

Looking ahead, one area of focus for the bank in 2013 will be on expanding its franchise by adding to its network of branches and ATMs. “The bank is also focused on managing the risks emerging out of the current credit cycle and will continue to closely monitor its portfolio and take steps to protect its interests,” says Ms Kochhar. 

Indonesia: Bank Mandiri 

Bank Mandiri continues to innovate and execute a clear strategy. The bank has the ambition of being the most progressive financial institution in Indonesia and in the past year it has stepped closer toward that goal. 

The banking industry in Indonesia is becoming increasingly competitive and Bank Mandiri’s clear strategy is helping it stay ahead of the competition. 

The bank laid out its goals in a 2010-14 vision, but now has had to be more cautious in the second half of its four-year plan because of the increasing competition in the market. Indonesia, with its large population and growing middle class, has become an attractive market for foreign banks, meaning local players such as Bank Mandiri have had to innovate in the face of competition from foreign players with sophisticated technology platforms and product suites. 

Despite the competition, Bank Mandiri has performed well and is pushing ahead with its strategy of increasing its customer base and market share by focusing on wholesale banking, retail deposits and payments, and retail financing. 

In terms of retail financing, the bank’s plan is to increase the composition of retail lending to 36% of its total loan book and it has been increasing its micro lending business, which requires special attention to credit risk assessment and collections. 

In the retail payment business, the bank is working on developing more payment solutions and has been working with third parties – such as convenience stores – as well as expanding its ATM network. 

Bank Mandiri has also worked on its risk management and reducing its non-performing loans (NPLs). The bank aims to have its NPLs below 1% by 2014 and to have zero fraud, all through the stricter monitoring of restructured loans, maintaining credit quality, and increasing collection and recovery rates. 

Kazakhstan: Tsesna Bank

In the aftermath of the financial crisis, Kazakhstan’s medium-sized banks have replaced larger institutions as the main drivers of growth in the country. And of these banks, the most dynamic and successful has been Tsesna Bank, which wins the award for the Bank of the Year in Kazakhstan.

Tsesna Bank’s energy and dynamism are reflected in its results, which have seen its net profits more than double in a year to $72m in 2012. It has comfortably outperformed the Kazakh banking sector by profitability ratios, with a 2% return on average assets and a 25.2% return on average equity. These figures also compare favourably with those of the largest banks in eastern Europe. 

Equally impressive is Tsesna’s record on non-performing loans, which account for only 2.9% of the bank’s loans. This reflects the wisdom of the management’s decision to limit exposure to real estate and construction sectors. 

“Given that the loan quality is one of the key challenges for the Kazakh banking sector, the past year was most favourable for those banks which managed to keep a low level of non-performing loans. For us, the past year was successful as the loan quality of Tsesna Bank is one of the best in the sector,” says Dauren Zhaksybek, chairman of Tsesna Bank’s managing board.

Tsesna’s performance has been recognised by the ratings agencies, with Standard & Poor’s revising Tsesna’s outlook to positive from stable earlier this year, recognising its rising systemic importance to the country’s economy. Standard & Poor’s also affirmed its B long-term counterparty credit rating and raised its Kazakhstan national scale rating to kzBBB-. 

“Tsesna Bank is now well positioned to move forward to the next stage of its strategy to establish itself as a universal bank, with a wider product range and establishing a wider geographical presence in the country,” says Mr Zhaksybek.

The healthy funding position has been made possible by increases in capital to Tg5bn ($32m) and a rapid growth in deposits. The deposit base has increased 51% to Tg518.4bn in the past year. Customer deposits account for 90% of liabilities, resulting in a healthy 93% loan-to-deposit ratio. The bank’s gross loan book grew 42% to Tg498bn in the past year. 

Kyrgyzstan: KICB

KICB wins the award for Bank of the Year in Kyrgyzstan for the series of insurance, mobile banking and bond market initiatives that have set it apart from its competitors, as well as a 45% increase in profits to $8.636m.

“We aim to be a sustainable bank by providing innovative products to promote the financial inclusion of the large unbanked population of the country. Mobile banking is one of our main strategic products in the coming year. In addition, KICB is exploring the opportunity to establish itself as a regional bank in Central Asia, including western China,” says Kwang Young Choi, KICB’s chief executive.

The bank has acquired total ownership of a local insurance company, which has been rebranded Jubilee Kyrgyzstan Insurance Company (JKIC). The insurance company, which currently underwrites general insurance business, is extending its services to include life insurance and bancassurance business – a mix of services that JKIC alone will be offering. JKIC’s share capital is also being increased to Kgs77m, making it the highest capitalised insurance company in Kyrgyzstan.

KICB has also launched its $3m mobile financial service that will enable customers to carry out all types of financial transactions from their mobile devices. This is the first service of its kind by a bank in the country. Partnership agreements are being established with mobile operators, utility companies, international remitting companies, government and private institutions to provide financial services through mobile devices. Indian value-added services provider Comviva will provide the software. 

Another ground-breaking initiative was the bank’s corporate bond, which was the first to be issued in Kyrgyzstan’s local currency, the som. 

The bond, which is for the equivalent of $2m, has the European Bank for Reconstruction and Development as the anchor investor with participation equivalent to $500,000. 

The wider significance is that its success would allow other institutions to tap local currency funds, thereby raising money that can be lent to their business clients, enabling them to avoid foreign exchange risks.

The bank has a strong local network but its most significant development has been the opening of a representative office in Kazakhstan, which will enable KICB to tap cross-border Kazakh investment.

Laos: ANZ Laos

ANZ continues to be a pioneer in Laos and is bringing international standards to the local market by investing in local training as well as increasing its investment in agribusiness and small and medium enterprises.

Abdul Lathief, chief executive of ANZ Laos, comments that the bank has faced a number of challenges in the past year, including increased competition from the entry of new banks and tight liquidity. “Dealing in a cash-based economy also poses threats, which we addressed through automated channels and technology investments to ensure we have the highest levels of security and anti-fraud measures,” says Mr Lathief.

ANZ Laos has made significant progress in the past year, more than doubling its loan portfolio and substantially growing its balance sheet. Mr Lathief comments on how this was possible: “This was driven by increased focus in agri and SME [small and medium enterprise] businesses, the key sectors in the Lao economy. We also recorded strong growth in our global markets business and grew our transaction banking business by supporting importers,” he says.

To build on this success, Mr Lathief identifies other opportunities where the bank will invest and focus in the months ahead. “We anticipate growth in the agri, hydro power sectors and SME sectors, as financing needs in these areas rise with economic development. The integration of Laos with Asean [Association of Southeast Asian Nations] is also a positive move that will open up more opportunities for us to support customers with our Greater Mekong expertise and super-regional network,” he says.

Laos has a young population; its median age is 23, the youngest of any country in the Asia-Pacific region. With a relatively younger workforce, this presents challenges and opportunities for the bank in training its human resources. ANZ Laos has committed significant resources to developing the banking skills and capacity of its staff.

Macau: ICBC (Macau) 

ICBC (Macau) has been following the strategy of its parent company in mainland China and has been focused on building sustainable profit growth, while also benefiting from ICBC’s advantages of a broad network, strong brand and investments in technology. 

Macao has been enjoying a period of regional integration and this is one of the opportunities that Zhu Xiaoping, chairman of the board of ICBC (Macau), believes the bank will benefit from. “Macao’s economy will maintain certain growth in the process of integration of Guangdong, Hong Kong and Macau,” he says. 

While there are opportunities from the regional integration, Macao cannot escape the influence of the global economy. Mr Zhu notes that the downturn in the expectations of China’s economy has been one of the bank’s biggest challenges in the past year, as well as fluctuations in the renminbi exchange rate. 

Also, Mr Zhu says the bank has been facing increased competition in the local market. Despite these challenges, however, ICBC (Macau) was able to seize opportunities in the local market in serving the real economy. “Effective risk control also ensured our stable operation,” says Mr Zhu. 

For the coming year, Mr Zhu makes a couple of predictions of the wider trends. “China will make progress while ensuring stability in the process of structural adjustment and the internationalisation of the renminbi will accelerate,” he says. The internationalisation of the renminbi has been a trend that ICBC (Macau) has taken advantage of and the bank was the first to offer renminbi syndicated loans in Macao. 

Also, the bank has made progress in improving its e-banking capabilities and has also expanded its cards portfolio. The bank has introduced a number of card products to the market, for example, the ICBC EAC UnionPay Dual Currency Diamond Card and the ICBC Wealth Management Visa Infinite Card. 

Malaysia: AmBank Group

Malaysia’s AmBank Group has successfully completed two acquisitions in the past 18 months – KurniaInsurans and MBF Cards – which are on track to make positive contributions to the banking group as a whole. In recent months, the focus of the bank has been building economies of scale from these acquisitions and cross-selling to the new customer base.

The acquisition of Kurnia creates the largest general and motor insurer in Malaysia, and the addition of MBF Cards means that AmBank is now one of the top three of merchant acquirers in the market. The bank now has about 50,000 merchants that accept card payments, as well as 500,000 cards in issue.

Ashok Ramamurthy, group managing director of AmBank Group, says that competition is a feature in the Malaysian market, which has meant that some players have been engaging in irrational pricing. “We continue to focus on profitable segments and risk-based pricing,” he says.

In the past year, says Mr Ramamurthy, slower economic growth and rising costs have meant an increased emphasis on the flow business, cross-selling and productivity. AmBank has also accelerated growth among small business and emerging affluent customers.

One recent initiative is the introduction of the AmSignature Priority Bank solution, which targets the affluent and provides customers with the whole range of retail banking solutions, which includes a retirement scheme, bancassurance and investment solutions. AmBank has also focused on a new branding campaign that repositions the lender as a provider of diverse financial solutions.

Mr Ramamurthy says that in the months ahead, AmBank Group will focus, among other things, on integrating its acquisitions and delivering synergies as well as simplifying its business model and streamlining processes. The bank has been concentrating on customer centricity and simplifying business structures so that customer experience is improved. It is also paying attention to optimising its capital and holding company structures in the face of changing regulatory requirements.

Mongolia: XacBank

Mongolia’s economy has been undergoing changes in recent years, and one of the challenges for its domestic banks is keeping up with the pace of growth. In line with this trend, XacBank has modified its strategy to adjust to the changes in the domestic market and has been working on improving its service as well as enhancing its electronic channels. 

Commenting on the bank’s major challenges over the past year, Bat-Ochir Dugersuren, CEO of XacBank, says: “The main challenges were advancing institutional transformation in our business processes, IT infrastructure, and delivery channels.” He adds that all this was done while maintaining the bank’s market positioning. XacBank had additional challenges in the context of the slowdown in the global economy and weak investor confidence. 

The bank was able to maintain its market share in challenging conditions and maintain a higher growth in its retail deposits when compared to the rest of the market in Mongolia, says Mr Bat-Ochir. 

He says of XacBank’s plans for the coming year: “The bank wants to build scalable and efficient institutional capacity to expand both in the small and medium enterprise [SME] and corporate and retail segments.” He foresees that there will be high growth potential in the SME and corporate segment once a stable investment environment in Mongolia has been established and confidence has returned to the market. The SME sector is expected to expand alongside Mongolia’s mining boom, as it is hoped that smaller companies will benefit in the supply chain of the mining industry. In recent months, XacBank has increased its SME loan book as well as its foreign exchange trading volume. 

The bank is also notable for its emphasis on corporate governance and has a three-pronged philosophy of ‘planet, people and profit’ as well as a focus on financial inclusion. 

Myanmar: KBZ Bank

After being isolated from the international community, Myanmar is now emerging as a transition country. As one of the last frontier economies, the market has gained much international interest because of its potential both as a producer as well as a consumer with its relatively large population of 60 million.

In this changing environment, KBZ Bank stands out as a domestic bank that has grown in the past year in terms of capital base, branch network, profitability and market share.

It is expected that competition will heat up in Myanmar’s financial markets, especially with the entrance of a number of foreign players as the market opens up and deregulates. KBZ has a clear strategy of focusing on strengthening its risk management capabilities and governance with the aim of building confidence for all the bank’s stakeholders.

With the increased competition, banks also face the challenge of a shortage of staff with the right skills – a problem that is likely to intensify as the new entrants may poach the best talent. For this reason KBZ has implemented a number of initiatives to create a positive working environment and attract new talent, as well as retain staff.

The bank has worked on a number of initiatives that set it apart from its peers. For example, it has rolled out ATMs, launched a debit card, introduced cards on international networks such as Visa and MasterCard, and has entered into alliances with Thai banks to expand remittances from overseas foreign workers. KBZ has also built up its corresponding banking network, expanded its branch footprint, and introduced mini-branches that reach further into Myanmar’s rural communities.

Nepal: NIC Asia Bank 

Nepal’s NIC Asia Bank has emerged as a competitive player, following a merger that created the new combined entity. The bank was formed as the result of a merger between Bank of Asia Nepal and NIC Bank, the first time that Nepal has witnessed a merger between two successful commercial banks. 

The merger has dominated the bank’s focus since the decision was made in 2012 to combine the two banks. Sashin Joshi, chief executive officer of NIC Asia Bank, says that “the challenge was to ensure a smooth integration within six months, which involved migration to a new core banking system and closure of numerous branches without any retrenchment and ensuring staff harmony and motivation.” NIC Asia Bank began operating as a merged entity from June 2013.

Mr Joshi explains how the bank has now emerged to become a serious player in the local market. “The merger has positioned NIC Asia Bank among the top five private sector banks in the country in terms of capital base, assets, branch network, customer base, market share and profitability. The merger has also shown the regulator and the banking industry how successful mergers can be executed with finesse,” he says. 

In the coming months, the bank will continue with its process of consolidation. Mr Joshi says that the focus will be on extracting maximum value through cost management, better productivity and efficiency from the economies of scale and wider customer base that come from the merger. “We see immense opportunities in expanding our business in the small and medium-sized enterprise space and also in increasing our foothold through alternative delivery channels, in particular IT-enabled services including international payments and mobile banking.”

Retail banking is a focus for the bank and it plans to attract a larger deposit base to reduce its reliance on wholesale funding. It also has aspirations to be the preferred bank in Nepal for consumer lending.

New Zealand: ASB Bank 

ASB Bank’s strength has traditionally been in retail banking and the lender has adapted to changes in the external environment to diversify its business lines. The bank now has diversified its product mix and has reported strong results, particularly in its rural and commercial segments. One example of such a product is the bank’s Rural Environmental Compliance Loan, which was launched in February 2013. 

The bank has also increased its social media presence and has 87,000 Facebook followers and 10,600 Twitter followers, the highest among New Zealand’s banks. 

Barbara Chapman, CEO of ASB Bank, says of the challenges that competing in the market brings: “The rapid evolution of technology combined with ever-increasing expectations from customers means that banks are under enormous pressure to develop innovative products and services. In order to maintain a leadership position in the market, ASB is continually redefining its customer proposition through new innovations. This includes taking ASB’s leading sales and service capability beyond physical channels and onto digital platforms.” 

The bank has launched a number of new products and services. Its mobile app is now available. The bank has focused on making the app accessible and has introduced person-to-person payment functionality that uses mobile phone numbers and e-mail addresses. Through ASB Mobile it is also possible for customers to make payments to Facebook ‘friends’ in New Zealand without the need to exchange bank account information. 

“Multichannel banking gives customers the tools for a self-directed relationship with the bank. ASB believes that the on-going integration of channels such as the branch network, contact centre and online and mobile banking can provide customers with a satisfying customer experience while maintaining a human presence within their channel of choice,” says Ms Chapman. 

Pakistan: United Bank Limited 

Pakistan’s banks have faced a number of challenges over the past year, including declining interest rates and an increase in the cost of deposits. 

“The biggest challenge has been maintaining shareholder returns through alternate revenue streams such as fee-based income, trading gains and dividends on our diversified investment portfolios and by balance sheet growth in a slow economic environment,” says Atif Bokhari, president and CEO of United Bank Limited (UBL). 

However, UBL has been working hard to overcome the challenges and push ahead with its own strategy for the local market. In the past year, the bank has notched up many achievements. “We achieved 35% growth in non-funded income – driven by higher fee-based revenues – and attained market leadership in the home remittance business,” says Mr Bokhari. 

He adds that the bank has witnessed significant growth in UBL Omni, its branchless proposition, which has expanded in the past year. UBL has worked with the government to disburse payments through the service and has also worked with multilateral agencies such as the World Health Organisation. 

Mr Bokhari also points to other achievements: “We successfully maintained deposit growth momentum along with branch network expansion, reduced loan loss provisions and improved performance within our international business.” 

Looking to the year ahead, Mr Bokhari explains that UBL plans to leverage its expanded branch network in order to accelerate deposit growth and cross-sell products to a wider customer base. Mr Bokhari explains that there has been a renewed focus on service quality and added value through technological innovation. Also, UBL has plans for further expansion. “We envisage growth in our international business through revitalised lending in the Middle East,” says Mr Bokhari. 

Philippines: BDO Unibank

The Philippines has attained investment grade ratings and the country’s economy had been performing well until much of it was hit by the devastating effects of Typhoon Haiyan. For local banks, however, there have been challenges of increased regulation and competition in the domestic market. 

Nestor Tan, president of BDO Unibank, says one of the biggest challenges that his bank has faced in the past year has been the pressure on bank margins, which has been brought about by excess system liquidity and declining interest rates. “This will be exacerbated by the phase-out of the Special Deposit Account facility by our central bank, which can potentially increase system deposits by another 20% to 30%,” he says.

The local market has also witnessed other regulatory changes which led BDO Unibank to reinforce its capital in anticipation of the central bank’s move to Basel III capital requirements. The bank’s stock rights offer in July 2012 raised approximately $1bn in fresh capital, which pre-emptively put BDO ahead of the central bank’s requirements that will come into effect in January 2014. The offering expanded the bank’s Tier 1 capital by 74% to 141bn pesos ($3.24bn) and its capital adequacy ratio to 19.2% at the end of 2012. 

The Philippines market has witnessed increased competition, which BDO Unibank has successfully handled. “Our initiatives to bolster our presence across our markets and broaden client coverage through branch expansion continue to pay off, allowing us to achieve above industry growth rates across almost all of our business lines,” says Mr Tan. 

The bank plans to expand along with the country’s economic growth. Mr Tan says: “We need to leverage our wide geographic reach and multipronged customer approach to allow us to support both the country’s large infrastructure requirements, as well as the fast-growing consumer and small and medium-sized enterprise markets.”

Singapore: United Overseas Bank

Singapore, as an open and international economy is particularly sensitive to fluctuations in the global economy, but despite such challenges the country’s domestic banks have posted strong financial results. 

Wee Ee Cheong, deputy chairman and CEO of United Overseas Bank (UOB), says that despite the economic headwinds from the West, which have moderated Asia’s growth over the past 12 months, UOB has remained resilient. Although there have been challenges in the Singaporean economy in recent months, Mr Cheong explains says that the bank is taking a long-term view in managing its business. 

“We believe in balancing growth with stability through a disciplined focus on key drivers: preserving balance sheet strength and investing in our people and infrastructure in a region where we see much potential. We are harnessing the strengths of our unrivalled network across Asia, through an integrated platform built to deliver seamless customer service, speed to market, scale efficiencies and stronger risk management,” he says. 

One focus for the bank has been to tap into Asia’s rising affluence and intra-regional business flows. The bank has in recent years been expanding on its pan-Asian network and has built its franchise in south-east Asia. 

One notable programme the bank has set up is its foreign direct investment advisory units, which support the bank’s customers as they expand overseas. The programme was first conceived in 2011 when the bank identified the need for firms to have access to a seamless cross-border service as they expanded in Asia. Through the advisory units, foreign firms can use Singapore as a springboard for their regional expansion. The service has expanded with units in Malaysia, Thailand, China and Indonesia. 

“We don’t take our successes for granted but stay focused on doing what is right for our customers, as we pursue quality, sustainable growth,” says Mr Cheong. 

South Korea: Shinhan Bank

All of South Korea’s banks have been under pressure in the past year, with many of them suffering declines in net profits. Shinhan Bank has been able to post a smaller decline than many of its peers and has made progress in building its franchise and its brand.

The bank has been operating under the idea of ‘compassionate finance’, which means it has introduced a number of new products tailored for those with low incomes and also for small and medium-sized enterprises.

Shinhan Bank has also successfully built its own organisation through the implementation of new wealth management and corporate and investment banking business models. These models have been designed so that the Shinhan Financial Group can leverage the synergies of its various subsidiaries while also complying with regulations that keep certain activities segregated in separate entities.

Shinhan Bank has expanded internationally, acquiring a stake in Bank Metro Express. Shinhan acquired a 40% share in the Indonesian bank, a deal that was agreed at the end of 2012. This acquisition adds to Shinhan Bank’s global network of 63 branches and subsidiaries in 14 countries, among them Japan, Vietnam and China.

Indonesia is an attractive market, with its natural resources and large domestic consumption market. Shinhan Bank has plans to tap this potential of Indonesia in a market it sees as one of the most important in Asia. Shinhan has expanded elsewhere in south-east Asia, and in April 2013 it opened an office in Myanmar.

At home, Shinhan was the first South Korean bank to open a ‘smart banking centre’, an online banking branch that showcases its use of innovative technology. At the centre, customers can receive video consultation services and new financial products through the internet or smartphone apps.

Sri Lanka: Hatton National Bank

Sri Lanka’s Hatton National Bank (HNB) has a clear strategy and has been pushing ahead with its plan of focusing on new fee business, executing a cost management drive, as well as investing in technology and launching multichannel banking and introducing smartphone apps.

Such efforts have been a challenge in sluggish economic conditions, which has meant that demand for credit has been lower in Sri Lanka. Jonathan Alles, HNB’s managing director and CEO, says: “Although exports indicated a growth momentum during the second half of 2013, driven by gradual recovery of the global economy, imports remained low leading to lower than expected growth in fee income from trade.”

Despite the challenging environment, HNB has been able to notch up a number of successes. “During the past year, HNB invested heavily in technology with a view to support the business growth, improve efficiency as well as quality of analytics. Key initiatives include being the first bank in Sri Lanka to launch mobile point-of-sale technology as well as fully fledged mobile banking,” says Mr Alles.

Other technology investments include systems for credit origination, anti-money laundering and a new ATM processing system. In the coming months, Mr Alles says that HNB will focus upon improving efficiency through business process re-engineering – through centralisation, automation and the adoption of best-in-class technology – and aiming to be the best in class in terms of service quality.

“With regard to opportunities we expect small and medium-sized enterprise sector, which is the engine of growth in developing Sri Lanka, to take off in the coming year and HNB, as one of the key operators in this segment, is bound to benefit. While mainly focusing on opportunities within Sri Lanka, the bank will be open to cross-border prospects as well,” says Mr Alles.

Taiwan: First Commercial Bank

The banking industry in Taiwan is competitive, with margins being squeezed and many banks looking overseas for their growth opportunities. The past year has been difficult, not least because of the slowdown in the Chinese economy, which has had a knock-on effect for Taiwan’s banks. 

Po-Chiao Chou, president of First Commercial Bank (FCB), says: “The investment plan in China remained uncertain, particularly pending various agreements between China and Taiwan.”

On a more positive note, however, the internationalisation of the renminbi extended to Taiwan in February 2013 when renminbi payments began through Taiwan’s own clearing bank. “This was a new investment opportunity for banks and clients,” says Mr Chou. “Nevertheless, the bank had to overcome the challenge that the offshore lending demands did not pick up with the pace of surging renminbi deposits and fund flows into China were highly regulated.” 

FCB, like many other banks, has had to comply with Basel III standards. Of this, Mr Chou says: “The growth of loan volume was no longer as important as calculation of capital charges and profit making. With efforts over a couple of years, the bank successfully rearranged products bringing more commission income to the fore. The funding structure was improved by shifting more costly term deposits to current accounts. The net interest margin is enhanced by focusing more on small and medium-sized enterprise [SME] promotion rather than the conglomerates.” 

As well as building its SME business, the bank has also been focused on international expansion. FCB was the first Taiwanese bank to open a representative office in Myanmar, which was opened in Yangon in March 2013. 

Looking ahead, FCB will continue to focus on its international strategy. “Expanding overseas has continued to be FCB’s strategy in the face of narrowing net interest margins at home,” says Mr Chou. 

Thailand: Kasikornbank

Thailand’s Kasikornbank has made significant progress in the past year in a number of areas, including its Asian bank strategy and development of mobile technology. 

Banthoon Lamsam, chairman of Kasikornbank’s board, says that Thailand’s banking industry has been resilient in coping with the challenges of household debt and capital outflows, which have had a limited impact on the banking sector because of the banks’ capital adequacy. In the face of increasing competition, Mr Lamsam explains that Kasikornbank’s approach has been to be prudent and ensure customer satisfaction with customer-centric strategies. 

The bank has built on its ‘Asian bank’ strategy and Mr Lamsam says that in the past year the bank “promoted Thailand as a centre connecting western China and the Association of South-east Asian Nations [Asean]”. He adds: “Additionally, we plan to open more branches in order to cover banking activities in China.” 

Kasikornbank aims to take advantage of the opportunities presented by the Asean Economic Community’s (AEC) plan for economic integration by 2015. The bank has been preparing for this and has a strategy of being competitive in the region. “The wave of Asean economic integration would force local financial institutions to move out to gain foothold in Asean countries and become regional financial institutions,” says Mr Lamsam. 

“Besides the capital market liberalisation following the AEC framework, there has been an effort to virtually integrate capital markets in Asean under the establishment of ‘Asean exchanges’ and ‘Asean trading links’, which is for enhancing overall intra-regional trade,” says Mr Lamsam. 

As well as taking advantage of the opportunities from the AEC, the bank is also giving more focus to expanding in provincial areas outside Bangkok, which Mr Lamsam explains are also expected to experience economic growth. 

Turkmenistan: TVEB

As Turkmenistan’s economy continues to grow rapidly, its banking system is becoming more sophisticated and competitive, driving up standards to match those demanded of the international market. TVEB (TurkmenVneshEconomBank) stands out from other financial institutions for its strategy of becoming a reliable business bank, creating an enhanced brand value and constantly developing its competitive advantage.

This has already delivered a significant improvement in the bank’s performance with net profit up 113% to TMm40.44m ($2838). Lending has risen by 9.4%, mainly due to increased loans to key industry sectors, while measures have been taken to improve the quality of the portfolio to a standard where there is currently no outstanding debt.

TVEB is a universal bank providing a wide range of services and profitable products for every part of the market, from large companies and corporations, small and medium-sized businesses, to individuals. The bank is focusing on improving the quality of services and introducing new cutting-edge technologies.

The bank successfully completed the implementation of a new automated banking system, which will enable it to provide customers with online banking – the first bank in Turkmenistan to offer this service. E-business will make the bank more mobile, giving the opportunity to expand its service geography.

TVEB has continued to expand its branch network and is putting great emphasis on training staff, while offering a high-quality service.

The bank is now focusing on how to best meet the needs of its clients, implement its investment activity more effectively, while further expanding and maintaining its technological lead over competitors.

TVEB’s corporate division is planning to further expand its transactions business and increase sales of complex investment products to corporate clients. Meanwhile its retail focus is on sales of debit and credit cards, and cash credits to individual clients.

Uzbekistan: Turon Bank

The award for Bank of the Year in Uzbekistan has gone to Turon Bank, which has increased its lending while reinforcing its capital base and offering an increasing range of sophisticated services.

The bank now has more than 18,000 business and retail customers, and has also increased its capital base in the past year by 15.3% and its assets by 21.9%.

The main business development targets in the past year “have been development of programmes supporting small and medium-sized businesses, lending to the manufacturing sector and active steps to attract new clients, [which] enabled a 27.3% increase in the loan portfolio of the bank and a 33.3% increase in the balance sheet profit,” says Farkhod Alimov, board chairman. 

As well as maintaining contact with customers through the branch network, Turon Bank has been developing its electronic banking services. Its online offering enables customers to pay bills via the internet, while its mobile phone banking service allows Visa cardholders to access information about their accounts by sending a text message. In addition, customers always receive an SMS confirmation of transactions such as purchases or cash withdrawals. 

Vietnam: SeABank 

Vietnam’s Southeast Asia Commercial Joint Stock Bank (SeABank) has had a busy 2013 and has made progress in a number of areas. 

The bank has grown steadily in the last year as well as restructuring its operations. Nguyen Thi Nga, chairwoman, SeABank, says on the bank’s progress: “Our key achievements in the past year include re-organising our operation structure towards a prominent retail bank model, intensifying basic business activities and enhancing service quality commitment, all of which resulted from our financial sufficiency and advanced banking technology.” 

While the bank is focused on these goals, the domestic market in Vietnam has been challenging for all local banks. The banking sector in Vietnam has been faced with market volatility and many banks have been focused on handling bad debts. Despite this difficult environment, however, SeABank was able to keep its non-performing loan ratios relatively low in 2012, at 2.8%. The bank’s immediate goals are to maintain its impressive loan-to-deposit ratio while scaling up and ensuring credit growth with and sound credit quality. 

SeABank has a number of strategic shareholders, which include France’s Société Générale and VMS Mobifone, a large Vietnamese telecommunications company. The bank has ambitions to develop into a prominent retail bank. 

Looking ahead, SeABank has plans to take its development further. “Our ambition for the period of 2013 to 2017 is to take SeABank to the next level of a retail bank model with prudent development strategies to ensure sustainable growth. In particular, we will continue our focus on innovation,” says Madame NGA, who adds that the bank will focus on its product portfolio and advancements in technology. Also, Madame NGA notes, SeABank will expand its partnerships with large corporate clients.

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