A report recently published by Global Finance shows that despite the present difficult external environment, banks within the Asia-Pacific region have recorded stable performance, supported by sufficient capital buffers, low price of credit, financing mainly from deposits moderately than capital markets, and a willingness to meeting digitalization challenges through innovation.
Some keen observers say this bodes well for the post-Covid-19 era.
The report quoted Graeme Knowd, managing director of Moody’s Financial Institutions Group in Hong Kong, as saying that banks within the Asia-Pacific region are well prepared to weather the crisis.
“We believe that after the crisis, most of Asia’s top-rated banks will return to profitability and continue to merit high ratings,” he said within the report.
In Southeast Asia, CB Bank was the primary bank in Myanmar to speculate in digital infrastructure, launching its mobile banking app and CB Pay wallet in 2018, making a mark on its fame as a mover by launching the country’s first bank cards that 12 months earlier and the primary ATMs in 2011. In 2019, the bank was the primary in ASEAN to launch an innovation laboratory on the Apix platform, the aim of which is to support cooperation between banks and fintech. Deposits and loans increased by 32% and 19%, respectively, last 12 months.
Indonesia’s 60% government-owned Bank Mandiri impressed with a ten% increase in net income and consolidated assets in 2019, while reducing gross non-performing loans by 40 basis points to 2.4%. The bank raised the biggest sum ever raised by an Indonesian bank in overseas primary bond markets, pricing a $750 million global medium-term bond last 12 months, and continues its rapidly expanding digitalization program. The bank leverages synergies with its subsidiaries in areas similar to Islamic banking, multifinance, insurance and area of interest banking.
In the Philippines, BDO Unibank impressively executed its long-term growth strategy in 2019, leveraging its strong business franchise, wide distribution network and solid capital base, while taking note of underserved and underbanked markets. BDO boasts a formidable share of the domestic market, with 22% of loans and 19% of deposits and a major 37% of trust assets. It also ticks the boxes in private and investment banking, money transfers, bank cards and rural banking.
Bangkok Bank of Thailand has a broad reach each domestically and internationally, with an in depth distribution network of 1,148 domestic branches and 117 business centers, in addition to mobile and online banking platforms under the Bualuang brand. Bangkok Bank has the biggest international network amongst Thai banks, stretching from Southeast Asia to China, the US and the UK. Late last 12 months, it reached an agreement to amass an 89% stake in Indonesia’s Bank Permata, giving it access to ASEAN’s largest economy.
Vietnam’s MSB recorded a major increase in assets last 12 months by 13% with solid growth in deposits and loans, which translated into an 18% increase in profits with a rise in ROE of 1% to 7.3%. Corporate deposits rose 39%, reflecting Vietnam’s growing economy, which has benefited from the US-China trade war. MSB opened 10 recent branches, bringing its number to 280 within the country, and have become the primary bank in Vietnam to use artificial intelligence to issuing bank cards.
Once again, Cambodia’s ABA Bank had an excellent 12 months, recording a 60% increase in total assets in 2019 due to significant growth in its deposit and loan portfolio. The growth was made possible by a $120 million capital injection from National Bank of Canada, which owns 100% of ABA. The bank continues to implement its strategy of specializing in digital financial products, maintaining a strict risk management policy. Net profit increased by a formidable 54% in 2019.
Hana Bank is the first distribution channel for South Korea’s Hana Financial Group’s quite a few business lines, which include credit and debit cards, life insurance, mutual funds, savings and alternative investment asset management. There is important synergy between these endeavors. Hana reported a flat net interest margin of 1.5%, and delinquent loans continued their downward trend together with the cost-to-income ratio, which fell by 10% within the second quarter of 2019.
Maybank is Malaysia’s largest financial services group, with a presence in ASEAN, Greater China and as distant because the United States and the United Kingdom. The bank offers conventional and Islamic banking services in the sector of economic and investment banking and insurance, in addition to wealth management, mortgage loans, automotive financing and bank cards. Meanwhile, Maybank Group’s brokerage arm, Maybank Kim Eng, deals with equity and bond underwriting, mergers and acquisitions, project financing and syndicated loans. For the sixth consecutive 12 months, Maybank has received an A rating from MSCI ESG Research. In 2018 and 2019, it was the one Malaysian organization included within the Bloomberg Gender Equality Index.
In tiny Brunei, Baiduri Bank works with two wholly owned subsidiaries: Baiduri Finance, which focuses on consumer finance; and Baiduri Capital, specializing in capital markets and trading. The bank has a powerful international brand due to cooperation with global and regional banks and is valued for its innovation, dynamics and consistently good indicators. Profit last 12 months was once more impressive and increased by 31%, while core capital increased by 5.4% in comparison with 2018.
