The International Banker 2016 Asia and Australasia Awards Winners

In both Asia and Australasia—collectively known as the Asia-Pacific—economic growth is slowing. In turn, the region’s banks are now having to settle for thinning margins, moderately declining profitability and increasing competition, originating from the burgeoning fintech sector in particular. An increase in the volume of nonperforming loans (NPLs) is also putting pressure on Asian lenders, as interest-coverage ratios continue to fall at large companies throughout the region. China and India are especially considered vulnerable at present.

China’s prospects continue to remain at the forefront of global economic concerns. One of the biggest banking issues in the country at present is the lack of clarity surrounding its bad-loans problem. Investors remain concerned about the conflicting reports surrounding NPL ratios in particular. While the government asserts it to be no more than 1.75 percent of total lending, recent analysis from Japanese broker Daiwa suggests that it is more likely to be between 6 and 18 percent. The encouraging news that seems to be emerging from the country, however, is that it may already have started to clean up its banking sector.

One of Asia’s biggest banking and financial centres has also come under the spotlight recently. The outlook for Singapore’s banking system has been downgraded by ratings agency Moody’s from “stable” to “negative”, again as a result of slowing economic and trade growth in Singapore and Asia. Real gross domestic product (GDP) growth is expected to cool from the 2 percent achieved last year to 1.6 percent in 2016 and 1.5 percent in 2017.

India’s largest lender, State Bank of India, meanwhile, has recently approved a merger that will see it acquire assets of three of its subsidiaries, as well as Bharatiya Mahila Bank Ltd, as part of the government’s push to consolidate its fragmented banking sector. As is the case with many Indian banks, State Bank of India is struggling to deal with an increasing level of NPLs, more so since the Indian central bank, the Reserve Bank of India, made it compulsory for all banks to count up the toxic assets on their books.

Over in Japan, banks are struggling to deal with the spectre of negative interest rates, which now loom heavily over the sector and Japanese economy. Lenders were recently given a modicum of breathing space after the Bank of Japan decided against lowering rates further below zero in early August, having first started in February to charge them 0.1 percent on some of their reserves. Nevertheless, as an industry group, banking has been the worst equity-market performer in Japan this year. The biggest banks have had to sell down a portfolio of Japanese government bonds in order to generate income, although this supply of debt now seems to be dwindling. With the central bank mostly purchasing the bonds as part of its monetary-easing efforts, it is now finding that there are fewer left to trade. Mizuho Bank’s government-bond portfolio, for example, has shrunk by 52 percent since March 2014. As banks reach the limits of what they can sell, the Bank of Japan now must look elsewhere for bond-sellers; as such, it may well begin to run out of tools available to bring Japan’s economy back to life.

The share prices of Australia’s biggest four banks are also under strain, currently trading at near their lowest in 20 years. A weaker outlook for economic growth, slowing credit growth and declining asset quality are all now combining to drag banking stocks down to multi-year lows. As is the case with Singapore, Australian banks have also been recently downgraded to “negative” by Moody’s on the back of an expected deterioration in operating conditions for the remainder of the year and beyond. In particular, low interest rates are expected to persist in Australia, meaning that banks’ profit growth is likely to be constrained going forward. Strong house-price inflation and rising household debt are also raising concerns regarding the extent of the Australian banking sector’s exposure to its domestic-housing market.

 >>>ASIA AWARD WINNERS  

               BANKING CEO OF THE YEAR                  
Asia
Dato’ Sri Zukri Samat

Bank Islam Malaysia Berhad

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BEST CUSTOMER SERVICE
PROVIDER OF THE YEAR

Asia
Land Bank of the Philippines (LANDBANK)

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Best Banking Group China
Bank of China

Best Banking Group India
ICICI

Best Banking Group Japan
Mitsubishi UFJ Financial Group

Best Banking Group South Korea
Hana Financial

Best Banking Group Taiwan
Taishin

Best Investment Bank Of The Year China
China International Capital Corporation

Best Investment Bank Of The Year India
Kotak Mahindra Capital

Best Investment Bank Of The Year Japan
Mizuho

Best Investment Bank Of The Year Taiwan
CTBC

Best Investment Bank Of The Year Thailand
Kasikorn Bank

Best Commercial Bank Of The Year Cambodia
Vattanac Bank

Best Commercial Bank Of The Year China
Agricultural Bank Of China

Best Commercial Bank Of The Year India
Punjab National Bank

Best Commercial Bank Of The Year Indonesia
PT. Bank Rakyat

Best Commercial Bank Of The Year Mongolia
Golomt bank

Best Commercial Bank Of The Year Philippines
UnionBank of the Philippines

Best Commercial Bank Of The Year Sri Lanka
Sampath Bank PLC

Best Commercial Bank Of The Year Thailand
Kasikorn Bank

Best Commercial Bank Of The Year Vietnam
VPBank

Best SME Bank Of The Year Vietnam
VPBank

Best Private Bank Of The Year Hong Kong
Hang Seng Bank

Best Private Bank Of The Year India
Kotak

Best Private Bank Of The Year Japan
SMBC Trust Bank

Best Private Bank Of The Year Singapore
Bank of Singapore

Best Private Bank Of The Year South Korea
Shinhan Bank

Best Private Bank Of The Year Sri Lanka
Commercial Bank of Ceylon

Best Innovation In Retail Banking Cambodia
Vattanac Bank

Best Innovation In Retail Banking China
Bank of China

Best Innovation In Retail Banking India
ICICI Bank

Best Innovation In Retail Banking Indonesia
PT. Bank Rakyat

Best Innovation In Retail Banking Japan
Japan Post Bank

Best Innovation In Retail Banking Malaysia
Bank Islam Malaysia Berhad

Best Innovation In Retail Banking Mongolia
Golomt Bank

Best Innovation In Retail Banking Philippines
UnionBank of the Philippines

Best Innovation In Retail Banking South Korea
KB Kookmin Bank

Best Innovation In Retail Banking Sri Lanka
Sampath Bank PLC

Best Innovation In Retail Banking Thailand
TMB Bank

Best Islamic Bank Of The Year Indonesia
BRISyariah

Best Islamic Bank Of The Year Malaysia
Bank Islam Malaysia Berhad

Best Islamic Bank Of The Year Pakistan
Meezan Bank

 >>>AUSTRALASIA AWARD WINNERS  

BANKING CEO OF THE YEAR
Australasia
Bruce McLachlan

The Co-operative Bank (New Zealand)

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BEST CUSTOMER SERVICE
PROVIDER OF THE YEAR

Australasia
National Australia Bank Limited

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Best Banking Group Australia
Commonwealth Bank

Best Commercial Bank Of The Year Australia
Commonwealth Bank

Best Commercial Bank Of The Year New Zealand
Bank of New Zealand

Best Private Bank Of The Year New Zealand
ANZ

Best Innovation In Retail Banking Australia
National Australia Bank Limited

Best Innovation In Retail Banking New Zealand
The Co-operative Bank