The Asian Banker Journal 1

2 The Asian Banker Journal

The Asian Banker Journal is published six times a year by
Trendwatch
Strategic thinking for Chinese banks is less diverse than it appears.
TAB INTERNATIONAL PTE LTD
Incorporated in Singapore
Noteworthy 8
A selection of comments made by protagonists in the industry as it faces new challenges
and further consolidation.

Current Account 10
• Merger activity takes off in Taiwan
• Many banks still seen missing ISO15022 deadline

Bank Notes 12
• DBS TD Waterhouse expands in China
• GE Capital’s latest acquisitions

Personal Account 16
Dr Rozali Mohamed Ali, managing director and CEO of Bumiputra-Com-
Founder and Editor-In-Chief
Emmanuel Daniel l edaniel@asianbanker.com.sg merce Bank discusses the benefits of outsourcing operational functions.
General Editor
Matthew Taylor l mtaylor@asianbanker.com.sg
Online Editor
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Senior Researchers, Research
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Li-May Chew l lmchew@asianbanker.com.sg
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Chen Yih Lin l ylchen@asianbanker.com.sg Operations & Technology 64
Regional survey finds that most banks in fact treat CRM as a ‘nice to have.’
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w w w. t h e a s i a n b a n ke r. c o m The Asian Banker Journal 5

TRENDWATCH

China’s convenient conundrum

In the past year alone, I must have met CEOs of about 12 Chinese banks and countless senior
executives, and the one significant observation that I would make is just how synchronized the
motivation of so many bankers in China appear to be these days.
All Chinese banks CEOs tell me that they are committed to adopting IAS accounting stand-
ards, if they have not already done so. All are committed to transparency, shareholder value,
corporate governance and all those darling phrases for investor confidence.
To a standard question in my interviews and conversations, “which bank do you admire
most?” the answer from bankers, whether from Beijing or Shanghai or Shenzen was unequivo-
cally, “Citibank.”
Before any Citibanker uses this to flutter their feathers, let me just say that my suspicion is that
many Chinese bankers are spouting safe received opinion rather than bestowing considered
admiration. It’s the same thing as associating the pianist Richard Clayderman to good music.
A convenient name to swirl a decent conversation around in a pub without the inconvenience
of the facts.
However, if the Chinese are still developing their perception of global issues, they are learning
and learning very fast. I have seen a greater desire and even ability amongst Chinese bankers
to develop proper “domain capabilities” in critical areas such as treasury, risk management and
operations than I have ever seen in non-China Chinese communities
The non-state banks in China are very profitable like Hong Kong and Taiwan.
these days (ROEs of Chinese businesses 2001) I have watched the Chinese take the time to learn, to send their
staff for training, to aspire to global best practices and to execute as
quickly as their own regulators will allow them to.
In many cases, I have come away awed that many of the same CEOs
of many Chinese banks who are so committed to market principles
today were just a decade ago languishing as _’professors’ in state-
owned universities or civil servants in a very socialist society.
In the development of my own assessment of the quality of Chinese
banks and businesses, I am currently straddling two realities. On the
one hand, I see the Chinese propensity to be a shameless consumer
of global ideas - especially if they are branded ideas from America. To
borrow from the title of a V.S Naipaul novel, they are “the mimic men.”
On the other hand, I see the ability and the energies for the Chinese
to create world class institutions, if they really wanted to.
There is no reason that we should not see such Chinese institutions
within the next ten years. The current ambition of ICBC Bank, the
Source: State Statistical Bureau, Asian Banker Research
country’s largest, to consolidate 1000 data centers into two within
the year is a feat that has never been achieved anywhere else in the
world, but symptomatic of the kind of energies that banks in China are exhibiting.
But there is the big ‘ what if’. Will we find, after yet another decade of promises, the
Chinese banks in this millennium ending up similar to the Indonesian banks after the
promises of the 1990s? Both are large countries. Both lure the rest of the world on the
promise of their large population.
But understandably, both have their fair share of suave and self-serving men and
women, just like the rest of humanity, no matter what is said about their national aspira-
tions. It is a melancholy that I share with every private equity company looking to buy
into Chinese banks today.
I guess I would think differently, if I could engage with a Chinese CEO about commitment or
excellence, without referring to Citibank, or Richard Clayderman.

6 The Asian Banker Journal

 CALENDAR LETTERS TO THE EDI-

I refer to the correction printed in the the Asian Banker Journal

• CeBIT Asia Issue 35 regarding our letter (relating to the article “Singapore:
~ 2 - 5 September, Shanghai, Hannover Fairs ConsumerCreditbusinesstosharepositiverepaymentinforma-
tion”). In order to reflect the charge-off ratio for Singapore, in
• China Int’l Exhibition on Financial Banking Technology & comparison with those reported for Hong Kong, the correct
Equipment (CIFTEE) methodology would be the annualised percentage of “sum
total of bad debt written off (for the quarter) against the rollover
~ 15 - 18 September, Beijing
balance (position at the end of the quarter).
• SmartCard Expo Annabel Tan
~ 18 - 20 September, New Delhi, Electronics Today Market Infrastrusture and risk advisory
Monetary Authority of Singapore (MAS)
• Sibos
~ 30 September - 4 October, Geneva, S.W.I.F.T EDITORIAL RESPONSE:
Making cross border comparisons can be problematic because
different countries calculate ratios in different ways and it is
• Asia Pacific Financial Planning Conference important not to compare apples with pears. Our numbers
~ 10 - 11 October, Singapore, Asia Financial Planning Journal are different only because Hong Kong uses “total billings”
as the denominator and Singapore uses “roll over balance”.
• Backroom Operations For Financial Institutions We understand MAS’s rationale for using roll-over charge-off
~ 28 - 29 October, Singapore, The Asia Business Forum calculated as a flow, but, as we suggested last month, we do
not have access to figures for Hong Kong calculated this way.
• Customer Retention in Banking & Finance Because Hong Kong uses total billings, we needed to compare
like with like so we had to use sum total of bad debt against
~ 28 - 29 October, Singapore, The Asia Business Forum total billings for Singapore.
• Bancassurance Singapore’s approximate charge-off for 1Q2002 (using rollover
~ 7 - 8 November, Singapore, The Asia Business Forum balance):
= [Bad debts written off (Jan-Mar)/Rollover balance (Jan-
• CHINA Fund Management Mar)]/12 months
~ 18 - 19 November, Singapore, The Asia Business Forum =(7.8+8.0+8.1)/(2098.5+2193.6+2120.6)]/12 = 4.5%
Charge-off ratio (using total billings) - As per Hong Kong’s
method:
• 4th bank.net = [Bad debts written off (Jan-Mar)/Total card billings(Jan-
~ 27 - 28 November, Mumbai, Exhibitions India Pvt. Ltd. Mar)]/12 months
= [(7.8+8.0+8.1)/(959.8+887.7+938.8)]/12
• The Fourth Annual “The Asian Banker Summit” = 10.29%
~ 2 - 4 April 2003, Hong Kong, The Asian Banker

Visit www.theasianbanker.com for the

latest Calendar Updates. L ETTERS TO THE EDITOR:
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The Asian Banker Journal 7

NOTEWORTHY

A selection of comments made by protagonists in

the industry in the thick of battle in the past two months.

“ The sky won’t collapse. ”

- Liu Jinbao, chief executive of Bank of China (Hong Kong), shaking off thoughts that woes
in the US market could have affected the bank’s own IPO launch in July 25 this year.

“ Simply because we are the biggest bank in Singapore with the most
customers ... on a probability basis it’s the highest for DBS.
”
- Edmund Koh, managing director and head of consumer banking at DBS Bank, explaining
why the recent Internet fraud cases in Singapore involved customers from DBS Bank.

“ Banks can share their technology instead of each bank trying to re-invent the wheel.
”
- Vepa Kamesam, deputy governor of the Reserve Bank of India, encouraging banks to pool in their technology resources instead of
each putting up its own IT network

“ We are still at an early stage when it comes to co-operative ventures

with the Bank of China on the credit card business. Right now only
debit cards are in circulation in mainland China, The credit card
product as we know it, is not yet available in this country.
”
- Peter Wong, director of Standard Chartered Bank and head of Greater China operations,
explaining the status of StanChart’s discussions with Bank of China about cooperative ven-
tures, which would include credit cards. (With photo from StanChart)

“ No ... That’s why we decided to get married with a good bank first, before all the pretty girls are
married and you only have the ugly girls left.
”
- Richard Tsai, Fubon Financial co-chief executive, on whether he would be willing to buy a bad bank and restructure it to realise its
remaining value. Fubon Financial recently announced it would include Taipeibank in its holding company through a stock swap.

8 The Asian Banker Journal

The Asian Banker Journal 9
CURRENT ACCOUNT

Taiwan: Merger news raise

consolidation hopes
Fubon Financial and Cathay Financial’s merger announcements with
Taipeibank and UWCCB, respectively, signal that consolidation in overbanked
Taiwan may finally be gathering pace.

When Fubon Financial announced its cross-selling a wide range of products trols Taiwan’s biggest life insurer, said
merger arrangement with Taipeibank through Fubon Bank, which is now de- it expects to fully integrate UWCCB
last week, observers remarked that riving over 25 percent of its revenue from with Cathay United Bank by 2005, and
Taiwan had finally recommenced the fee-based products. Similarly, we see the new company will have combined
consolidation process in its financial very significant opportunities to increase assets of NT$2,100 billion ($62.2 billion).
sector, which has been seeing slow fee-based income at Taipeibank,” said The share-swap deal will also reportedly
progress of late. A few days later Cathay Richard Tsai, Fubon Financial’s co-chief create Taiwan’s largest life insurance
Financial Holdings announced its own executive officer. provider, and third-largest domestic
merger plans with United World Chinese ”Over time, we expect to be able to credit card issuer.
Commercial Bank (UWCCB), boosting increase Taipeibank’s traditional gross ”Bot h i n st it ut ion s w i l l benef it
sentiments that consolidation in Taiwan’s fee income ratios from 8 percent in 2001 from a more highly developed bancas-
banking sector was on a roll. [excluding gains] to levels more consist- surance channel, and from the ability to
The concept of financial holding ent with Fubon Bank, which posted a cross-sell products over a wider distribu-
companies (FHCs), however, is still under gross fee income ratio of 26 percent in tion platform to more retail and corporate
question - especially in Taiwan, where 2001 [excluding gains],” Tsai said. customers,” said UWCCB chairman Gre-
more than a dozen banks and insurance Taipeibank has 80 branches servic- gory Wang. Cathay Financial’s cross-sell
companies have converted to FHCs in ing 1.3 million clients, and assets of ratio per customer stands at 1.3.
late 2001 and early 2002. But not all these NT$654 billion. Doubts about the financial sector’s
FHCs have displayed the progressive The $2.4 billion deal between Fubon consolidat ion process were aired
cross-selling skills of Fubon Financial, Financial and Taipeibank was shortly fol- earlier when t he plan ned merger
which claims that it sells 2.7 products per lowed by Cathay Financial’s own merger between Taishin Financial and Shin
customer on average. If these new tales of announcement with UWCCB. Kong Financial was scrapped less
acquisition result in a new rash of such Cathay Financial’s and UWCCB’s than two weeks after its announce-
mergers, Taiwan will finally find out if merger, based on a stock swap valued at ment. In July, state-owned Bank of
the financial holding structure is the best NT$114.6 billion ($3.4 billion), will create Taiwan, Land Bank of Taiwan and
mechanism to drive consolidation. the fourth largest financial institution in Central Trust of China had also re-
”Despite the relatively small size of Asia (excluding Japan) and is the larg- jected a government-initiated merger
our existing banking platform, we have est acquisition for a corporate entity in plan, saying they would benefit mini-
already had considerable success in Taiwan. Cathay Financial, which con- mally from the consolidation.

S.W.I.F.T. creates MUG for ISO 15022 laggards

Currently only 30 percent of the world’s traffic of S.W.I.F.T. securities messages
is on ISO15022.

Too many banks will not be ready Beyond November 16, users that have to the May 31, 2003 closure date. The fee can
for ISO15022 compliance on time, so not migrated to the new ISO 15022 stand- rise to as high as 45,000 euros ($44,199).
S.W.I.F.T. have been forced to deploy ard will be charged a higher fee. The group, S.W.I.F.T., which announced this month
delaying tactics. Although there will be which will be discontinued on May 31, that it would stick to its original deadline for
a big surge as many complete testing in 2003, will be charged up to 1 euro (98 US ISO 15022 migration, has created a Messag-
the next three months, at the current rate cents) per message sent after November ing User Group (MUG) for those that have
this only looks like getting to about 50- 16 this year. These users will be charged yet to migrate to the new standard. The ISO
60 percent by the November 16 deadline a monthly fee starting from 5,000 euros 7775 MUG - a closed user group of non-ISO
rather than the 90 percent plus expected ($4,911), which will increase depending on 15022 users - will be created separate from
by S.W.I.F.T. the size of the institution and the proximity the main S.W.I.F.T. network.

10 The Asian Banker Journal

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The
TheAsian
AsianBanker
BankerJournal
Journal 1111
BANKNOTES

Online Brokerage given the still-low trading volumes and

price competition.
China in a few years, says “While we are not looking at acquisi-
tions as our main growth strategy, we’re
very comfortable valuing portfolios,
DBS TD Waterhouse given our experiences in other markets,”
he qualified. “If opportunities arise, we’ll
DBS TD Waterhouse CEO Ian Struthers thinks long-term about China, look seriously at them.”
even as he builds the franchise in Singapore and Hong Kong. When the high-profile marriage be-
tween Merrill Lynch and HSBC dissolved
in tears, sceptics were already prepar-
China is a market that online broker- base in its twin markets of Singapore and ing to sound the death knell for DBS
age DBS TD Waterhouse is looking Hong Kong. Struthers declined to reveal TD Waterhouse, which they viewed as
at, but the joint venture company be- the exact number of customers in each inhabiting a similar business model - a
tween Singapore-based DBS Bank and market, but put the total customer base view that Struthers rejects.
Canadian-based discount brokerage at 45,000 with the bulk of the customer He said, “From a business perspective,
TD Waterhouse will move cautiously to base in Singapore. the joint venture between Merrill Lynch
explore the opportunities, says its CEO “We’ve been experiencing 30 percent and HSBC failed for a simple reason. The
Ian Struthers in an interview. annualized growth in the number of premise of the joint venture was to gain
“We’re very excited about the oppor- customer accounts since the start of the access to a large number of existing custom-
tunities in China and want to explore joint venture,” said Struthers. “Experience ers, which Merrill Lynch and HSBC did not
them. However, we’re moving cautiously in other markets tells us that we need to achieve. Merrill Lynch did not afford access
and China is something we’ll build [sic] build a customer base of at least 160,000 in to its U.S. customer base, while the joint
within the next few years,” he said. the first three years to be successful.” venture competed with HSBC’s own online
Struthers said that the most obvious This growth will primarily come brokerage for business in Hong Kong.”
way to enter the China market was to organically, but he does not rule out “I don’t see how you can succeed if you
tie up with a player that already has a the possibility of acquiring customer can’t gain access to customers in your
presence and gives access to a sizable portfolios from other market players. most important markets.”
customer base. However, this was not This scenario plays itself out especially Struthers said DBS TD Waterhouse
the only way and added that DBS TD in Hong Kong, where the market is, in will continue to focus on and leverage on
Waterhouse was “looking at a few dif- Struthers’s own words, “a slow, steady its strengths - the strong presence of DBS
ferent models.” build” because of the fragmented nature, Bank in Singapore and Hong Kong, and
In the meanwhile, DBS TD Waterhouse but also in Singapore, where analysts the ability to trade in multiple markets
is concentrating on building its customer have been predicting a market shakeout with a single account.

Acquisitions customers to a broader range of consumers

and commercial finance products.”
GE Capital continues He also said GE Capital will “con-
sider acquisitions that will fast track
our growth in this promising and
expansion in Asia stable market.”
GE Capital’s business in Asia includes
GE Capital had continued to add key acquisitions to its portfolio in Asia’ consumer finance, commercial finance,
includingNPLportfolios.Itisalsoactivelyinvolvedinoutsourcingback the acquisition and restructuring of
office operations. non-performing loans, aircraft leasing
and equity business. The company has
purchased portfolios of non-performing
GE Capital, a unit of General Electric finance company SDL Leasing Singapore loans in Thailand and is looking at buy-
Co. of the US, has followed up its recent from UBS Capital Asia Pacific, and AGC ing portfolios of such loans in Taiwan,
acquisitions in Singapore and Australia from Westpac Banking Corporation. The South Korea and China.
with a reported negotiation to buy a con- deals gave GE Capital an increased foot- Elsewhere in Asia, GE Capital has
trolling stake in the credit card business print in the auto finance business in Sin- out-located its back-office operations
of South Korea s Chohung Bank. gapore, and more than doubled its pres- in India It has 9,000 employees in Delhi
A Chohung Bank official named GE ence in Australia and New Zealand. and Hyderabad, and has plans to more
Capital as being one of two parties inter- Said Steve Bertamini, president of GE than double this number to 20,000 by
ested in purchasing a controlling stake in Capital Asia: “SDL provides an established next year. GE Capital is also reportedly
the South Korean bank s credit card unit, platform for the growth of GE Capital in planning to outsource jobs such as risk
which it is planning to spin off. Singapore. We plan to continue to expand analysis, insurance accounting and bill
Last month, GE Capital acquired auto its auto finance business and to introduce payment to India.

12 The Asian Banker Journal

The Asian Banker Journal 13
PERSONAL ACCOUNT

Planning for the integration

was a major exercise
The following is extracted from an interview with Dr Rozali Mohamed Ali, managing director
and CEO of Bumiputra-Commerce Bank, Malaysia, describing how the lessons learnt from
developing e-business and outsourcing solutions have liberated the intellectual capital of
the bank.

harmonization of systems and develop-

ment of culture. It was inevitable that this
was a time of trauma. A merger event
is a dislocation in evolution. But very
early on, we felt that we wanted to do as
much as we could to transform the bank.
Now, transformation means all kinds
of things. What we really wanted to do
was to create an operating model for a
stronger bank. The short-term challenges
were indeed rather serious, but we also
strove to address the longer-term struc-
tural challenges. We had to consider the
liberalization of the financial sector in
our country, the convergence of financial
services, the entry of non-banks, some
structural shifts away from lending as far
as banks are concerned, as well as shifts
induced by demographic changes. The
merger presented us with an opportunity
to tackle these issues.
So in 1999 when we were planning
the merger, quite apart from the specific
issues of merger integration and so on,
we felt we had to do a lot more to build
the foundations of the future bank. First
of all, we needed to remove the legacy or-
ganizational structures. They were rather
traditional and had lost some shape
Dr Rozali Mohamed Ali, managing director and CEO of Bumiputra-Commerce Bank, Malaysia with the passage of time. We instituted
a complete review of all functions and a
complete reorganization of the way in
The financial crisis was a very difficult time which we did things.
Editor’s note: for the economies of the region and of this The creation of the new Islamic bank,
Bumiputra-Commerce Bank, the second country, and clearly for the banks. It also Bank Muamalat Malaysia Berhad, took
largest bank by assets in Malaysia, was provided an opportunity for the country over many of the duplicate branches. But
established on October 1 1999, as the to restructure and reinvigorate its bank- most of the operational work; such as the
result of a merger of the former Bank ing sector. Directly or indirectly, because back office, and processing was still be-
Bumiputra Malaysia Berhad with Bank of the crisis, we were able to contemplate ing duplicated. One of the major moves
of Commerce. The government also undertaking the merger between Bank in the reorganization was to centralize
Bumiputra and the Bank of Commerce. or regionalize all the processing work,
created a third entity, Bank Muamalat,
Having been presented with this op- taking away the back office from the
a new Islamic bank from some of the
portunity, we saw the merger process as branches. This process was completed
branches that overlapped when the
more than merely an aggregation of two just over a year ago.
two banks were merged. banks. Obviously, there are the standard Centralization of processing neces-
things that go into any merger - such as sitated a cultural shift, as the branches

14 The Asian Banker Journal

 PERSONAL ACCOUNT

moved away from operations towards I-Commerce Group for this purpose.
sales and service, with a greater degree Establishing a separate unit was im-
of customer orientation. Quite apart from
this cultural shift, which always occurs
portant because activity related to the
merging of the IT platforms threatened Mancano And
when two organizations merge, we saw
the need for a broader shift, towards a
more effective workforce. The typical
to submerge other initiatives. It is still a
relatively small group of people but they
are allowed and they are able to focus on
Associates
.......The best boutique search
bank worker of the future will be very, this particular area and actually, they firm on Boat Quay
very different from the bank worker of have done extremely well.
today. The modern bank worker has to The trouble, of course, with building
be able to exercise initiative much more. these kind of capabilities is that you are
He or she will be conversant with some constrained because you have to justify
rather sophisticated tools of analysis them from a business-case point of view.
and marketing as well as being versatile Many internet banking initiatives tend
and flexible. to fail because the pick-up is too slow or
As is typical in any merger situation, the performance numbers don’t really
staff morale was rather low. There was a meet expectations. We focus about 50-50
desire to maintain the status quo with the on products and delivery (like internet
least possible change because anything banking) and the other half on building
else is uncomfortable. Through discus- an Internet infrastructure. Mancano And Associates is an established recruitment
sions with our staff (and also with the Developing an e-business platform firm specializing in the financial service and
unions, which represent them) we were doesn’t make much sense if we tell eve- telecommunications industry. We are consistently retained
by Fortune 500 institutions throughout South East Asia
able to reach a common understanding rybody it’s so good but we don’t use it
for our industry expertise. Mancano And Associates
of the need to upgrade all the people ourselves; particularly now that we have discreetly researches and recommends Asian experienced
who work for us. Not just in the sense a unique and very effective integrated senior management professionals with extraordinary
of having new certificates or getting a system for procurement and inventory. qualifications.
few more dollars a month, but really So we have in fact committed ourselves
upgrade in terms of their ability and the to using this to run our own business. Our consultants have executed assignments in:
way in which they approach work and We can expect good returns from that
•Burma •Australia
the way in which they feel fulfilled at the investment purely on the basis of our
•Cambodia •Philippines
work that they do. Instituting this type own utilization. But, of course, primarily
of change is a slow process. It has to be it is for the customers, and the custom- •Hong Kong •Singapore
managed very sensitively, but basically ers are beginning to realize that this is •India •Sri Lanka
I think we’re on the right track. an extremely good way of running their •Indonesia •Thailand
Predictably, there was a fall in the businesses too. •Malaysia •Vietnam
number of staff last year when we em- Planning for the IT integration was
barked on a voluntary separation exer- a major exercise because, in banking, Assignments undertaken:
cise. We reduced staff numbers by about you’re talking about millions of ac-
20 percent. In any merger, that is essen- counts, where you cannot afford to have Banking & Financial
tial. More importantly, the age profile of a single mistake when you merge the •Investment Banking
the staff has changed. It is now a little systems. It’s particularly data intensive •Corporate Finance
younger. The profile of skills in the sense and, unfortunately for us, we merged in •Direct Investment
of higher, tertiary level skills and others 1999. So we had to take extra precautions •Corporate Banking
is also in the process of changing. Now for Y2K and couldn’t really start the inte- •Private Banking
we have a reasonably stable structure, gration process until a few months into •Banking Operations
infusing younger and different talents, the year 2000. But around the middle •Equities
which was something that was difficult of last year, we achieved full integra- •Fund Management
before the merger. It has also allowed us tion. That was another major exercise, •IT Banking System
to embrace the latest strategic thinking because we knew that sooner or later
and techniques. we would have to find a way to manage Telecommunications
The e-business is one important stra- these areas more efficiently.
•Wireless Local Loop
tegic initiative that we have been devel- In our organizational structure, the
•Private Telephone &
oping and leveraging since the date of operations and IT unit was essentially Telegraph
the merger. Our e-commerce initiative autonomous, so we began to look at he •Paging
is improving the reach and the ability to possibility of outsourcing this function, •Cellular / Satellite
deliver of the bank. It has also allowed almost immediately post-merger. There •Network Management System (NMS)
us to improve the actual running of the are many reasons why we wanted to do •Radio Network Planning
bank itself. this. One of them is obvious. Manag- •Installation Planning
We created a group with specific and ing IT is a specialist job which banks •Radio Base Station/Transmission Engineers
exclusive responsibilities called the may not be very good at doing unless
Mancano And Associates
45A Boat Quay Singapore 049834 Tel: 6533 8128 Fax: 6533 0079
e-mail: mancano@iname.com
Website: www.mancano.com
The Asian Banker Journal 15
PERSONAL ACCOUNT

they buy in skills. But another reason ment capabilities to help EPIC-I set itself process engineers, for a banker it is rather
is that, if such functions are integrated up and re-engineer its processing. At novel. Each proposal has to be extremely
within the business units, it tends to the same time, EDS has undertaken to precisely specified and measured and
be difficult to understand how much provide additional work, non-related to there are actual contractual obligations.
they cost and how well these functions the bank’s work, for EPIC-I to undertake. The bank will continue to retain con-
are being done. This information is not There was a staff transition from the op- trol of the intellectual process of speci-
measured and tends to be lost in the erations and IT part of the bank to EPIC-I fying the IT requirements. For example,
mass of a large organization. and also there is ongoing transition also the current project on decision support
In the past, different kinds of proc- to EDS Malaysia. systems is done by the bank, not by EDS.
esses were done by discrete groups in We felt strongly that EPIC-I should When the project is being implemented,
each department. The costs of those stand on its own as a positive contribu- there will come a point in time when we
processes were unknown; because all tor to the bank’s bottom line. So there is can identify which are the operational
we had were the departmental reports, a stipulation in the agreement whereby parts of that system and that will then
and the departmental reports not only costs are reduced by 5 percent the first be passed over to the outsourcer.
included the cost of Wit h i n t he ba n k
the operation proc- we have a technol-
ess, but other costs as ogy group. We have,
well. So nobody ever again, the remnants
knew in detail how of the IT crew before,
muc h t h i ngs cost so it’s sort of a tiny
except at a very ag- CIO-type function. Es-
gregate level. It was sentially a technology
difficult to recognise planner. But there is a
rising costs and diffi- contract, which binds
cult to fix them even EpicI to use the serv-
if we could identify ices of EDS. So EpicI
them. will become a Siamese
The move towards twin of EDS. In other
centralization was words, it will handle
first of all to contain the processing-type
operations and IT, area and EDS will han-
at least in terms of dle the IT-type area.
performance infor- We have created
mation, and to find a new division that
out how much it cost. manages the interface
Having determined with EpicI and admin-
how to measure and monitor costs, we year, 10 percent the second and 20 per- isters the contract. Remaining within the
then considered how best to reduce them. cent from the third year onwards. In bank are certain corporate services we
At the time, there were many other larger other words, we now have a contractual could think of outsourcing in due course;
banks that engaged very actively in out- promise that within three years, our perhaps to EpicI, perhaps to others; and
sourcing, and we undertook a special processing and IT costs go down by 20%. the three business units which are retail,
examination to see whether such a thing We also benefited from the discipline of business and corporate. These are the
would be useful for us. planning and writing the service level units where the “real” bankers live - the
We engaged in discussions with sev- agreement that governed the contract people who understand their custom-
eral possible partners, we looked at a which made us specify as precisely as ers, who think about interest rates, who
wide range of possible structures. The possible what needed to be done. manage client relationships, who have a
eventual structure that we chose and the Finalising the SLA took us quite a nose for good credit and so on. Now the
eventual partner, EDS, is an arrangement long time and it was extremely difficult. real bankers are released to do the busi-
which provides benefits from our point If you talk about a ten-step process, we ness. They don’t have to bother so much
of view and is also a viable proposition probably reached step one or two in about processing and other mechanical
from the EDS point of view. We have identifying our processes and modify- administrative tasks.
structured the deal using a processing ing them just a little bit. So, it was very Within the bank, now that the bread
company, which is known as EPIC-I. It is rudimentary. Since EpicI was established and butter stuff is dealt with, or is being
a wholly owned subsidiary of Bumiputra on January 4th this year, now we can go dealt with, a transition is occurring. It
Commerce Bank. This entity does the all the way to step ten. There’s going to should be more or less complete later
processing work for Bumiputra Com- be extensive re-engineering of processes this year. Now we are free to think of
merce Bank and it on-sources the IT work with the help of EDS, our management other important projects: such as better
to EDS Malaysia, which is a separate partners. But the SLA approach is quite risk management systems, customer
company, again wholly owned by EDS. a shock, especially to bankers. Whilst the relationship systems and client manage-
At the same time, EDS provides manage- process would be familiar to industrial ment systems.

16 The Asian Banker Journal

 Special Edition
Display until 31 December, 2002

The Definitive Annual Ranking and

Survey of Asia’s Top Banks
Special Edition

Look us up on www.theasianbanker.com
The Asian Banker Journal 17
THE ASIAN BANKER 300

2 The Asian Banker Journal Special Edition

 THE ASIAN BANKER 300

Anintensifi
An intensifi
eded
willwill to
to tackle
Asian
tacklethe
Asian
Banker
theproblems
Banker
problems
Research
Research is proud
is proud to present
to present its inaugural
its inaugural ranking ranking of the Top 300
of the region’s
region’sbanks.
commercial Top 300 commercial
In researching onbanks by asset
our story, size. In issues
two pertinent researching on our
confronting the region’s
story,institutions
financial two pertinent issues
became confronting
apparent: the region’s
the continuing financial
high levels institutions
of non performing loans
became
(NPLs), apparent:
and the ongoingthe continuing high
consolidation takinglevels
placeof non performing
within the industry.loans
(NPLs), and the ongoing consolidation taking place within the industry.

From the Editors

The editors of The Asian Banker Journal are pleased to present
what is likely the first extensive study of the balance sheet pro-
files of the Asian banking industry since the economic crisis of
the past few years.

One of the most important discoveries that we made in develop-

ing these rankings is that a ranking of 500 banks for Asia is no
longer relevant. A ranking of 300 banks is the most credible and
usable list. Many smaller banks have either been consolidated or
do not have reporting structures that are transparent enough to
validate for this study.

This year’s ranking was developed entirely by a team led by

Chew Limay, the lead data center and benchmark researcher at
The Asian Banker Research. She was of the view that the progress
being made by different banks across the region in resolving NPL
problems has received less attention than the problem itself.

Limay and her team of course expect to interact extensively with

subscribers of this report in order to further develop what has
become the most authoritative ranking of financial institutions
for Asia.

Table of Contents
The full edition of this ranking in Excel sheet format,
• Intensified will to tackle the problems w3
plus updates and analyst support are available by
• Index to The Asian Banker 300 12 a subscription of only $620 per annum. Details are
• The region’s largest banks by Assets 16 available in the related advertisement in this Journal.
• The largest banks in Greater China 28 Alternatively, please contact us at subs@asianbanker.
• The largest banks in ASEAN 29 com.sg or call 65-62957300 or visit
• Performance Rankings 30 www.theasianbanker.com
• Country Capsules 32

This Special Report was researched and written by CHEW LIMAY, CFA, manager, Asian Banker Research and published by The Asian Banker, incorporated as T.A.B. International
Pte Ltd. Worldwide Copyright Protected. All rights reserved. ISSN 02189615 Singapore permit: MITA (P) 029/10/2001 Malaysia KDN PPS 1301/9/2001. Reproduction in any
form prohibited except with permission. For reprints, please call Singapore 65-62957300. While every precaution is taken to ensure accuracy of the information in this report, The
Asian Banker does not provide warranty of any kind for suitability of use of this report.

The Asian Banker Journal Special Edition 3

THE ASIAN BANKER 300

How did the nations fare in TAB 300?

In 2001's Asian Banker 300, the region suffered a total net loss of $12.8 billion. This is at the other end of the
spectrum from net earnings of $23.8 billion in 2000. Of this, Japan's red ink stained the darkest, with losses
of $38.8 billion as against a turnround of $3 billion the year prior. There is however hope that the losses,
largely due to NPLs written off, could herald a new era with stronger recapitalisation and better lending.
Banks Assets Share Deposits Share Loans Share Net Profit Share
Country
in 300 ($mn) of total ($mn) of total ($mn) of total ($mn) of total *
Australia 11 577,939 4.9% 300,487 3.7% 351,908 5.3% 4,833 18.5%
Bangladesh 1 4,014 0.0% 3,364 0.0% 1,706 0.0% 2 0.0%
China 16 1,828,192 15.5% 1,448,789 17.7% 1,017,522 15.3% 4,226 16.2%
Hong Kong 18 503,111 4.3% 339,538 4.2% 219,990 3.3% 6,234 23.9%
India 30 259,725 2.2% 212,414 2.6% 106,043 1.6% 1,884 7.2%
Indonesia 8 66,499 0.6% 50,801 0.6% 14,762 0.2% 454 1.7%
Japan 109 6,904,320 58.4% 4,619,305 56.5% 3,966,317 59.5% -38,785 na
Malaysia 17 148,536 1.3% 102,487 1.3% 94,277 1.4% 945 3.6%
New Zealand 5 65,982 0.6% 41,585 0.5% 53,476 0.8% 787 3.0%
Pakistan 4 16,881 0.1% 14,074 0.2% 8,004 0.1% -81 na
Philippines 7 33,724 0.3% 20,533 0.3% 16,082 0.2% 50 0.2%
Singapore 3 189,009 1.6% 124,956 1.5% 101,415 1.5% 1,464 5.6%
South Korea 13 491,109 4.2% 335,897 4.1% 289,001 4.3% 3,553 13.6%
Sri Lanka 1 2,500 0.0% 786 0.0% 1,204 0.0% 8 0.0%
Taiwan 43 586,982 5.0% 458,070 5.6% 338,381 5.1% 810 3.1%
Thailand 11 124,064 1.1% 96,032 1.2% 79,150 1.2% 817 3.1%
Vietnam 3 11,275 0.1% na na 3,767 0.1% 29 0.1%
Total 300 11,813,860 100.0% 8,169,117 100.0% 6,663,004 100.0% -12,770 100.0%
* excluding losses from Japan and Pakistan
Source: Asian Banker Research

Progress being made by banks in differ- wrought radical change on the banking net profits improved 25% to $26 billion -
ent parts of Asia to resolve their NPL landscape. We expect continuing consoli- with especially inspiring numbers from
problems has received less attention than dation activity as management strives to India and South Korea.
the problem itself. The Asian Banker tackle the ongoing asset quality problems
300 identifies the potential winners and and address the relatively low profitability Trying to tackle problem loans
losers. The former includes South Korea provided by current banking structures. NPLs remain a serious problem for Asian
and India which have made the most The aggregated results of the sur- Banks, and are likely to impair the speed
decisive moves to root out the NPL vey make disturbing reading. Whilst of economic recovery in the region. Since
problem. Progress however, remains the number of banks in the region has the financial crisis, local and international
slow in tackling NPLs in Japan, Taiwan, shrunk, the benefits of this consolidation regulatory and supervisory bodies have
Thailand and Indonesia despite the crea- have yet to be realised and profitability been forced to adopt a pro-active stance
tion of asset management companies to for most players remains marginal. The to sort out the mess. Financially unsound
help banks get NPLs off their books. In combined net profits of banks covered institutions were subjected to take-overs
Hong Kong the level of NPLs varies from by the survey slid from a profit of $23.8 and mergers, the lucky ones re-capitalised
bank to bank dependent on the extent billion into negative territory with a $12.8 and some less fortunate banks liquidated.
of lending to the mainland, whilst the billion loss, despite an anaemic rise in Few would disagree that these actions
weakness of the economy in Singapore aggregated assets of 1.9% to $11.8 tril- were essential to provide for the survival
has seen NPLs continue to rise, albeit lion. Japanese banks, which accounted of the banking industry in Asia.
from a low level. for 36% of our coverage (109 banks) in There is a growing will to tackle the
This research also shows how the TAB 300, continue to show the folly of problem. We see evidence of this in
frenetic pace of Asia’s consolidation has earlier lending policies. In 2001, these retrograde action to deal with existing
taken its toll. A survey originally intended banks haemorrhaged a staggering $39 problem loans. Some loans have simply
to cover the top 500 regional banks had billion, erasing a $3 billion bounce bank been written off, but banks have been
to be whittled down to 300 as a tsunami into the black in 2000. Asia ex-Japan able to sell portfolios of dubious loans to
of consolidations and occasional exits numbers were more encouraging - total government sponsored asset management

4 The Asian Banker Journal Special Edition

 THE ASIAN BANKER 300

companies (AMCs). International invest-

ment banks have acted as intermediaries
Estimates place Japan’s banking sector NPLs at
using sophisticated financial engineering
to repackage distressed assets, extracting
100 trillion yen ($763 billion) ...almost similar to
residual value by using credit derivative
structures. Specialised vulture funds have
her annual GDP. Meanwhile, many foreign ob-
also begun to circle, picking off individual
and groups of bad loans, bringing a more
servers believe the actual size of China’s NPL is
pragmatic and short-term perspective to understated...unofficial extimates put the figure
the workout process.
closer to 50%.
Predicament of major proportions
Typically, about 2-3% of loans in a healthy
bank will be non-performing - defined as
those that are not serviced for at least in attempting to resolve the NPL issue. dustrial and Commercial Bank of China
three months - with a percentage of up to Over the last decade, policy-makers have (ICBC, No.5 in TAB300) acknowledged
5% considered acceptable. The hangover largely ignored the problem, hoping that an NPL ratio of just under 30%, while
from the Asian financial crisis means that it would go away. NPLs in Japan are a Bank of China (BOC, No. 7) admitted
it is unrealistic to expect a return to below legacy of asset inflation in the late 1980s recently to the group’s NPLs being 24%.
these thresholds for Asian banks any time which lured banks into lending trillions More alarmingly, many foreign observ-
soon. Regional asset quality has deterio- of yen to finance asset purchases of ers believe the actual size of NPLs is
rated to an extraordinary extent. Apart property and shares at inflated prices. understated because the way the Chinese
from Australia, South Korea and Hong When the financial bubble burst, prices categorize bad loans is relatively lenient
Kong, the remaining countries have collapsed and loans went bad. Japan compared to international accounting
soured loans above the 5% threshold. In resolved about $400 billion worth of bad standards. Unofficial estimates put the
the worst instance, unofficial estimates loans between 1998-2001, yet officials banking system’s NPLs closer to 50%,
claim that perhaps half of the loan port- acknowledge that banking sector NPLs making the banks technically insolvent!
folio in China is irretrievable. As such, still hover around 40 trillion yen ($305 With Chinese banks yet to be granted
the official NPL numbers shown in the billion) or 6-7% of the total loan assets authority to resolve their own NPLs, the
graph below need to be treated with some of its banking system. Many private sec- growing NPL problem remains a colos-
caution. Banks in some countries such as tor analysts believe the real level to be sal drag.
Malaysia (gross NPL: 18%), have tackled 60 trillion yen in EXCESS of this figure,
their non-performing loan problems with depending on how problem loans are AMCs to the rescue...
greater candour than, for example, Japan classified. This would push the NPL ratio Elsewhere in the region, the problem ap-
(NPL: 7%) although this may not be ap- up nearer to 15-18% of total loan book, a pears to pale alongside Japan and China.
parent from these numbers. surreal figure almost similar to Japan’s Nonetheless, NPLs are still an issue and
Whilst the recent history of NPLs in annual GDP. in some cases, the situation is a great deal
Asia starts in Japan, the Japanese banks China is another country where the worse than it appears on the surface.
can in no way be seen as a role model level of NPLs has placed the local banks Amongst the nations battered by the
in a precarious state. Asian crisis, the Philippines still has the
There, the problem worst acknowledged level of banking-
is largely due to system bad debt at 18.4% of total loans
state banks being in the financial sector. Malaysia comes a
used as conduits close second at 18%, followed by Indone-
for state spending sia (12%) and Thailand (10.5%). All except
on projects that the Philippines have been able to make
yielded insufficient the problem look better‚ via the creation
returns. NPLs prob- of state-owned or state-supported Asset
ably amount to as Management Companies (AMCs) to
much as $3.2 trillion purchase bad assets from financial insti-
yuan ($378 billion) tutions at discounted prices, repackage
or 28% of the total and sell them.
loans outstanding One virtue of shifting NPLs from banks
by Chinese banks, to AMCs is that it creates a transparent sale
with the four ma- and disclosure process to make investors
jor state-owned more comfortable. This unfortunately
banks responsible does not rectify the problem - in some
for 2/3rds of the cases, the sheer size of the residual legacy
total value. China’s of bad debts in the aftermath of a financial
biggest player, In- bubble is so great that even the govern-

The Asian Banker Journal Special Edition 5

THE ASIAN BANKER 300

ments are unable to deal with it. The made to a related party. The financial Taiwanese banks into the red this year
Asian Development Bank (ADB) echoed mess is however far from over - next on but prepare the stage for recovery in the
the limitation of the AMC solution, saying IBRA’s list of disposal is that of Bank coming years.
‘The overhang of NPLs held by AMCs is Niaga by October following twice- The key exception to weak reforms
one factor retarding economic recovery by delayed attempts from unsatisfactory in tackling NPLs has been South Korea.
delaying corporate restructuring.’ bids earlier. Other banks it is expected to Nowhere has the clean up been swifter
move towards offloading include Bank or more successful. Although the govern-
...but progess still lacking Mandiri, Bank Negara Indonesia (BNI) ment still has further to go with privati-
Digging beneath the surface, we indeed and Bank Rakyat Indonesia (BRI) fol- sation and consolidation in the sector,
found evidence that some AMCs have lowed by BII, Bank Bali, Bank Lippo and reforms are moving along following
not made distinctive inroads into NPL Bank Danamon. Although Indonesia has the creation of the Korea Asset Manage-
disposal. The Resolution and Collection an urgent need to plug its budget deficit, ment Co. (KAMCO) to tackle roughly
Corporation in Japan for instance, has given the number of banks on offer and 66 trillion won ($50 billion) of troubled
so far bought up only a tiny fraction of the limited investors‚ appetite for Indo- debt transferred from Korean financial
NPLs in the system. A report released by nesia, the completion of these sales will institutions. With NPLs plummeting
Ernst & Young (EY) Asia Pacific Finan- take some time yet. 980 basis points from 12.9% in 1999 to
cial Solutions last No- 3.1% by 1Q2002, clean
vember was similarly up here is definitely
critical of the govern- seeing meaningful
ments for their lack progress. However,
of development in giving banks a fresh
tacking NPLs. EY es- start comes at a price
timated NPLs to have - the Korean govern-
leaped-frog 33% in ment has exhausted
the last two years and $117 billion or 25%
amounted to some $2 of its GDP for this
trillion in November. purpose, in contrast
This translates to lev- to Japan’s 14% and
els of NPLs in Asia at Taiwan’s less than 3%
roughly 29% of the re- and Malaysia’s less
gion’s combined GDP than 5%.
rather than official Though commend-
estimates of 17.3%. able efforts have been
Thailand and In- made via government-
donesia have been led programmes to
amongst the slow- address financial re-
est in tackling the structuring and follow
NPL problem. Even through with NPL
allowing for AMC disposition strategies,
purchases of NPLs bar exceptions like
from banks, progress Korea, the regional
in restoring finan- economies are gen-
cial health has been erally struggling to
disappointing. Despite the Financial Despite write-offs amounting to keep on top of the NPL problem. Ernst
Restructuring Agency in Thailand enlist- NT$530 billion ($15.1 billion) over the & Young reckons that the cost of failing
ing the help of foreign NPL advisors like past three years, Taiwan’s has similarly to move aggressively to resolve the is-
GE Capital and Lend Lease to liquidate witnessed an acceleration of NPL levels sue will snowball into the “NPL Effect”
failed assets, subsequent disposal of the to circa 7.5% (with unofficial estimates at - reduced economic expansion resulting
bad loans by the AMCs themselves have twice that), drifting further and further in slower growth in standards of living,
been slow. away from the Ministry of Finance’s business investment, and tax revenue.
In Indonesia, the Indonesian Bank Re- goal to cut NPL ratios below 2.5% by There is a need for the different countries
structuring Agency (IBRA) has hitherto June 2003. However, signs are surfacing in Asia to grasp the bull by the horns and
merged four ailing state banks to form the that banks are facing up to the problem make a concerted and sometimes painful
biggest Indonesian bank - Bank Mandiri - the big 3 commercial banks (First Com- effort to clean up the NPL problem once
(No.80); sold 51% of Bank Central Asia mercial (No.52), Hua Nan (No.56) and and for all.
(BCA, No.163) to hedge fund Farallon Chang Hwa (No.60)) have already begun Hopefully, forward looking initia-
Capital of the United States for $540 liquidating billions in NT$ of NPLs, with tives such as the adoption of more so-
million; and cleaned up and recapital- each intending to dispose off between phisticated lending criteria and better
ize Bank International Indonesia (BII, NT$42-60 billion ($1.2-1.7 billion) this risk management tools that banks have
No.282), a bank crippled by huge loans year. Massive write-offs would put most begun implementing will limit the risks

6 The Asian Banker Journal Special Edition

 THE ASIAN BANKER 300

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The Asian Banker Journal Special Edition 7

THE ASIAN BANKER 300

Major consolidations in 2001

Consolidation continues to alter the structure of the banks in Asian Banker 300 as institutions seek size and
hopefully, synergies. The following are some key integrations that have taken place within the region in 2001.
Commercial Bank Top 300 Assets Shareholders' Profit as % of
Country
Pre-merger Post-merger Rank ($mn) Equity ($mn) Assets Equity
Sakura Bank Sumitomo Mitsui
Japan 2 823,586 22,210 -0.4% -15.9%
Sumitomo Bank Banking Corporation
Bank of Tokyo Mitsubishi
Mitsubishi Tokyo
Mitsubishi Trust & Banking Japan 3 758,707 26,154 -0.2% -4.4%
Financial Group
Nippon Trust Bank
Sanwa Bank
Tokai Bank UFJ Holdings Japan 4 608,304 19,832 -1.5% -47.2%
Toyo Trust & Banking
Daiwa Bank
Daiwa Bank Holdings
Kinki Osaka Bank
(to be re-named Resona Japan 8 342,782 9,830 -2.1% -72.3%
Nara Bank
Holdings in Oct 2002)
Asahi Bank (from 3/2002)
Kookmin Bank
Kookmin Bank South Korea 15 142,868 6,724 0.8% 16.7%
Housing & Commercial Bank
DBS Holdings
DBS Holdings Singapore 24 81,741 7,309 0.7% 8.9%
Dao Heng Bank
Hanvit Bank
Kyongnam Bank Hanvit (re-named Woori
Kwangju Bank Finance Holding in South Korea 28 63,381 2,213 0.8% 24.3%
Peace Bank of Korea May 2002)
Woori Inv. Bank
United Overseas Bank
United Overseas Bank Singapore 32 61,222 7,052 0.8% 10.8%
Overseas Union Bank
OCBC
OCBC Singapore 38 46,045 4,750 0.9% 9.4%
Keppel TatLee
Malayan Bank
Malayan Bank Malaysia 51 37,055 2,721 0.6% 8.1%
PhileoAllied Bank
Taishin Bank
Taishin Financial Holding Taiwan 174 8,736 798 0.3% 3.7%
Dah An Bank
Source: Asian Banker Research

of a similar implosion in asset quality Holdings (No.4). This follows the mar- remains important, especially in regions
in the future. But whatever the case, riage between Fuji, Dai-ichi Kangyo and with vast rural clientele like China and
there are no short cuts to tackling the Industrial Bank of Japan earlier in 2000 India, the fact remains that local play-
bad loans issue; there will be more pain to create the behemoth Mizuho Financial ers are disadvantaged in several arenas.
before the gain. Group, possibly the world’s largest bank Globalisation brings with it considerable
with assets exceeding $1.15 trillion. advantages - economies of scale, cheaper
Is bigger better? For many nations, the primary impetus cost of funds, resources to embrace
On the M&A front, our TAB300 compila- for merger activity is deeply entwined technological advancements and inter-
tion shows the continuing creation of new with the NPL problem. Regulators are national branding expertise.
banks. Most of these new entrants are trying to repair their financial systems With government-led integration,
not brand-new institutions attempting and lay the foundation for a strong eco- the push for internationalisation, and
to penetrate the market, but merged enti- nomic recovery. The hoped-for results several countries still over-banked,
ties born out of consolidation. Amongst are greater efficiencies, higher profits, there remains plenty of scope for more
these are the mega-mergers in Japan streamlined management, better gov- consolidation. On that front, Singapore
- Sakura and Sumitomo Bank merged ernance and better risk-management banks are emerging at the top of the
to form Sumitomo Mitsui (No.2) while procedures. There is also the possibil- consolidation pile in South East Asia.
agglomeration of Sanwa, Tokai, and ity that we will see more cross border With the island-nation opening the
Toyo Trust & Banking gave birth to UFJ M&A activity. Although local relevance banking market to international players,

8 The Asian Banker Journal Special Edition

THE ASIAN BANKER 300

The Asian Banker Journal Special Edition 9

THE ASIAN BANKER 300

domestic banks are embracing the ad- profitability and competitiveness. Follow- banks still cannot hold a candle to top-
age that size matters. What started off as ing this, proposal for a potential merger tier international players. Asian Banker
seven banks during the crisis has been between Krung Thai Bank (No.85) and Research tabulations for the profitable
whittled down to three - DBS, UOB and Bankthai (No.206) to strengthen the larg- nations (i.e. excluding the 109 banks in
OCBC - with the end product possibly er Krung Thai Bank and meet regulatory Japan and 4 in Pakistan with cumulative
being a mere duopoly. In Malaysia, gov- goals of reducing the number of financial negative returns) place average Return
ernment initiatives forced 54 banks and institutions is being studied. on Assets (ROA) at 0.53% and Return
finance companies to consolidate into 10 In South Korea, reform efforts after on Equity (ROE) at 4.8%, still relatively
“superbanks”, each anchored by a major the Asian financial crisis saw Korean minute against averages of 1.5% and
player. Bank Negara governor Tan Sri banks undergoing wrenching, state- more than 22% for global players like
Dr Zeti further reiterated that the ideal led mergers to off-load weighty NPLs. Citibank (refer below).
long-term scenario could well be 3-4 key Kookmin’s alliance last November with It goes without saying that Asia still
players with others providing ancillary H&CB, Korea’s top mortgage bank, cre- has further to go in restructuring its bank-
niche banking services. ated a financial giant with $143 billion in ing sector. It has however, taken crucial
Merger mania has left banks in Singa- assets and dwarfed state-run No.2 Woori first steps in building a healthy financial
pore and its neighbour with an average Finance Holding Co (asset base: $63 system and laying the foundation for
customer base of 1.3 million/bank and 1.8 billion), a cluster of five cash-strapped a strong economic recovery. NPLs will
million/bank respectively. In contrast, lenders grouped together in April 2001. remain high for a while but a culture
Taiwan has 52 banks competing for 23 Creation of the colossal bank, ranked of greater openness and disclosure has
million customers (0.44 million/bank), No.15 in TAB300, added urgency to other developed in recent years which suggests
some with market shares of just 1-2%. lenders’ plans of possible alliances. Next that banks are becoming more willing
To alleviate this problem of over-bank- in queue was the union of Hana (No.55) to face up to the problem. 2001’s flood
ing which has led to excessive competi- & Seoulbank (No.112), a marriage that of red ink may itself maybe a sign of
tion in a market place where demand has would create a powerhouse with 84 tril- renewal - more and more banks owning
been shrinking, Taiwan has introduced lion won in combined assets. up to dud assets and beefing up capital
several measures aimed at encouraging to offset losses.
consolidation of its banking sector. These Quantity vs. Quality With weaker players falling by the
include tax and accounting incentives It seems clear that NPLs and consolida- wayside, hardier institutions with more
and passing the Financial Holding Com- tion were 2001’s main themes, and their efficient management, better services and
panies (FHCs) Act, which forces groups influence will probably feature promi- ideas are moving into the forefront. This
of related financial-services companies nently for the rest of this year as well. first wave of government-directed consoli-
to form single, bigger entities. These has There remains some doubt that having dation is now being followed by a second
resulted in at least a dozen banks and fewer, but stronger banks will strengthen wave of market-driven integration.
insurance companies converting to FHCs profitability, and it is clear that something The regional banking landscape is still
over the course of the last 12 months. needs to be done. With the exception of a-changing and the road ahead maybe
Recent announcements of two large- possibly HSBC in Hong Kong, overall long and tortuous for some.
scale merger plans - that between Fubon sustainable profitability of our regional - Watch this space.
Financial and Taipeibank (No.116), and
between Cathay Financial and United
World Chinese Commercial Bank (No. Returns of regional banks still relatively unattractive
96) will hopefully set the stage for con-
solidation in Taiwan’s banking scene Average (ex-Japan & Pakistan) Return on Equity
following several other false starts. Japan
Return on Assets
In Hong Kong, three players - the glo- Pakistan
Taiwan
bal HSBC Group (No.11), Bank of China
Bangladesh
(HK) (No.20) and Standard Chartered China
Bank, dominate the banking scene. How- Philippines
ever, there are also other 100-odd licensed Sri Lanka
banks and several tiny family-controlled Malaysia
Singapore
banks with market shares of just 1% each
Indonesia
competing for the remains of the pie. It Australia
will not be long before the consolidation India
tide sweeps up such tiny players. Thailand
Again, the concept that “bigger is Vietnam
South Korea
better” was the main justification used
Hong Kong
by Thai authorities to merge two state- New Zealand
owned banks - Siam City Bank (No.197)
and Bangkok Metropolitan Bank (No.264) -20% -15% -10% -5% 0% 5% 10% 15% 20% 25%
in 2Q2002, creating the country’s fifth
largest institution in a bid to boost their Source: Asian Banker Research

10 The Asian Banker Journal Special Edition

THE ASIAN BANKER 300

The Asian Banker Journal Special Edition 11

THE ASIAN BANKER 300

Index To The Asian Banker 300

Name, Country and Rank

A
Adelaide Bank Australia 271
Bendigo Bank
Biwako Bank
Australia
Japan
268
181
Agricultural Bank of China China 10 Bumiputra-Commerce Bank Malaysia 110
Aichi Bank Japan 108
Akita Bank Japan 107
Allahabad Bank
Alliance Bank
AMP Bank
India
Malaysia
Australia
230
247
276
C
Canara Bank India 125
Andhra Bank India 205 Cathay United Bank Taiwan 250
ANZ Banking Group (NZ) New Zealand 152 Central Bank of India India 155
Aomori Bank Japan 114 Central Trust of China Taiwan 156
Aozora Bank Japan 37 Chang Hwa Commercial Bank Taiwan 60
Arab-Malaysian Bank Malaysia 288 Chekiang First Bank Hong Kong 260
Asahi Bank Japan 12 Chiao Tung Bank Taiwan 118
ASB Bank – NZ New Zealand 179 Chiba Bank Japan 29
Ashikaga Bank Japan 49 Chiba Kogyo Bank Japan 121
Asia Pacific Bank Taiwan 246 Chikuho Bank Japan 258
Australia & New Zealand Banking Group Australia 22 China Construction Bank China 9
Awa Bank Japan 104 China Development Industrial Bank Taiwan 215
China Everbright Bank China 61
China Merchants Bank China 64

B
Bangkok Bank Thailand 69
China Minsheng Banking Corp
Chinatrust Commercial Bank
Chinese Bank
China
Taiwan
Taiwan
109
77
207
Bangkok Metropolitan Bank Thailand 264 Chinfon Commercial Bank Taiwan 244
Bank Central Asia Indonesia 163 Chohung Bank South Korea 46
Bank Danamon Indonesia 234 Chugoku Bank Japan 48
Bank for Foreign Trade of Vietnam (Vietcombank) Vietnam 239 Chukyo Bank Japan 145
Bank for Investment and Development (BIDV) Vietnam 287 Chung Shing Bank Taiwan 252
Bank Internasional Indonesia Indonesia 282 Chuo Mitsui Trust & Banking Japan 19
Bank Islam Malaysia Malaysia 275 Citibank Malaysia 209
Bank Lippo Indonesia 298 Citibank India India 255
Bank Mandiri Indonesia 80 CITIC Industrial Bank China 53
Bank Negara Indonesia Indonesia 144 CITIC Ka Wah Bank Hong Kong 187
Bank of America (Asia) Hong Kong 242 Commonwealth Bank of Australia Australia 17
Bank of Asia Thailand 266 Corporation Bank India 254
Bank of Ayudhya Thailand 171 Cosmos Bank Taiwan 218
Bank of Baroda India 138
Bank of Ceylon Sri Lanka 293
Bank of China (HK)
Bank of China Group
Bank of Communications
Hong Kong
China
China
20
7
23
D
Daegu Bank South Korea 149
Bank of East Asia Hong Kong 81 Dah Sing Bank Hong Kong 198
Bank of Fukuoka Japan 35 Daisan Bank Japan 142
Bank of Ikeda Japan 133 Daishi Bank Japan 66
Bank of India India 157 Daito Bank Japan 225
Bank of Iwate Japan 106 Daiwa Bank Holdings Japan 8
Bank of Kansai Japan 176 Dao Heng Bank Hong Kong 105
Bank of Kaohsiung Taiwan 213 DBS Group Holding Singapore 24
Bank of Kochi Japan 190 DBS Kwong On Bank Hong Kong 248
Bank of Kyoto Japan 57 Dena Bank India 257
Bank of Maharashtra India 249 Development Bank of the Philippines Philippines 270
Bank of Nagoya Japan 95
Bank of New Zealand New Zealand 119
Bank of Okinawa
Bank of Overseas Chinese
Bank of Panhsin
Japan
Taiwan
Taiwan
167
189
283
E
E.Sun Commercial Bank Taiwan 188
Bank of Saga Japan 127 Ehime Bank Japan 143
Bank of Shanghai China 146 Eighteenth Bank Japan 111
Bank of Taiwan Taiwan 27 EnTie Commercial Bank Taiwan 224
Bank of the Philippine Islands Philippines 186 EON Bank Malaysia 199
Bank of The Ryukyus Japan 154 Equitable PCI Bank Philippines 243
Bank of Western Australia (BankWest) Australia 150
Bank of Yokohama Japan 25
Bank Rakyat
Bank Rakyat Indonesia
Bank Sinopac
Malaysia
Indonesia
Taiwan
297
191
184
F
Far Eastern Intl Bank Taiwan 222
Bank Tabungan Negara Indonesia 292 Farmers Bank of China Taiwan 122
Bankthai Thailand 206 First Commercial Bank Taiwan 52
Baodao Commercial Bank Taiwan 229 Fubon Commercial Bank Taiwan 182
Beijing City Commercial Bank China 151 Fujian Industrial Bank China 123

12 The Asian Banker Journal Special Edition

 THE ASIAN BANKER 300

Name, Country and Rank

Fukui Bank Japan 115 Kaohsiung Business Bank Taiwan 300

Fukuoka Chuo Bank Japan 289 Keiyo Bank Japan 98
Fukuoka City Bank Japan 92 Kinki Osaka Bank Japan 59
Fukushima Bank Japan 223 Kita-Nippon Bank Japan 175
Kiyo Bank Japan 88
Kookmin Bank South Korea 15

G
Gifu Bank Japan 231
KorAm Bank
Korea Exchange Bank
Korea First Bank
South Korea
South Korea
South Korea
87
47
97
Grand Commerical Bank Taiwan 220 Krung Thai Bank Thailand 85
Guangdong Development Bank China 82 Kumamoto Family Bank Japan 160
Gunma Bank Japan 44 Kyushu Bank Japan 185

H
Habib Bank Pakistan 226
L
Land Bank of Taiwan Taiwan 45
Hachijuni Bank Japan 43 Liu Chong Hing Bank Hong Kong 232
Hana Bank South Korea 55 Lucky Bank Taiwan 294
Hang Seng Bank Hong Kong 33
Hanvit (Woori) Bank South Korea 28
HDFC Bank
Higashi-Nippon Bank
Higo Bank
India
Japan
Japan
236
140
79
M
Macquarie Bank Australia 131
Hiroshima Bank Japan 41 Makoto Bank Taiwan 235
Hiroshima-Sogo Bank Japan 120 Malayan Banking Malaysia 51
Hokkaido Bank Japan 72 Metropolitan Bank and Trust Philippines 170
Hokkoku Bank Japan 84 Michinoku Bank Japan 129
Hokuetsu Bank Japan 130 Mie Bank Japan 164
Hokuriku Bank Japan 39 Minami-Nippon Bank Japan 237
Hong Leong Bank Malaysia 158 Minato Bank Japan 86
Hongkong Chinese Bank Hong Kong 291 Mitsubishi Tokyo Financial Group Japan 3
Howa Bank Japan 251 Miyazaki Bank Japan 141
HSBC Hong Kong 11 Miyazaki Taiyo Bank Japan 259
HSBC Bank Malaysia Malaysia 208 Mizuho Financial Group Japan 1
Hsinchu Intl Bank Taiwan 177 Musashino Bank Japan 94
Hua Nan Commercial Bank Taiwan 56 Muslim Commercial Bank Pakistan 280
Hua Xia Bank China 147
Hyakugo Bank Japan 70
Hyakujushi Bank Japan 74
N
Nagano Bank Japan 201

I
ICBC (Asia) Hong Kong 221
Nanto Bank
Nanyang Commercial Bank
National Australia Bank
Japan
Hong Kong
Australia
65
153
13
ICICI India 90 National Bank of NZ New Zealand 126
Indian Bank India 202 National Bank of Pakistan Pakistan 211
Indian Overseas Bank India 195 Nippon Trust Bank Japan 193
Indusind Bank India 295 Nishi-Nippon Bank Japan 62
Industrial & Commercial Bank of Vietnam (Vietincombank) Vietnam 261 Norinchukin Bank Japan 6
Industrial and Commercial Bank of China China 5 North Pacific Bank Japan 42
Industrial Bank of Korea South Korea 40
International Bank of Asia Hong Kong 263
International Bank of Taipei
Intl Commercial Bank of China
Iyo Bank
Taiwan
Taiwan
Japan
173
76
63
O
OCBC Bank (Malaysia) Malaysia 219
Ogaki Kyoritsu Bank Japan 78
Oita Bank Japan 100

J
Jammu & Kashmir Bank India 277
Oriental Bank of Commerce
Oversea-Chinese Banking Corporation
India
Singapore
217
38

Jeonbuk Bank South Korea 286

Joyo Bank
Juroku Bank
Japan
Japan
34
67 P
Pan Asia Bank Taiwan 238
Perwira Affin Bank Malaysia 253

K
Kagawa Bank Japan 165
Philippine National Bank
Public Bank
Punjab & Sind Bank
Philippines
Malaysia
India
265
132
284
Kagoshima Bank Japan 83 Punjab National Bank India 137
Kanto Bank Japan 196 Pusan Bank South Korea 162

The Asian Banker Journal Special Edition 13

THE ASIAN BANKER 300

Index To The Asian Banker 300

Name, Country and Rank
R
RHB Bank Berhad Malaysia 134
Taiwan Business Bank
Taiwan Cooperative Bank
Taiwan
Taiwan
73
36
Rizal Commercial Banking Corp Philippines 281 Thai Danu Bank Thailand 299
Thai Farmers Bank Thailand 103
Thai Military Bank Thailand 178

S
San-In Godo Bank Japan 71
Tochigi Bank
Toho Bank
Tohoku Bank
Japan
Japan
Japan
128
89
241
Sapporo Bank Japan 194 Tokushima Bank Japan 183
Senshu Bank Japan 148 Tokyo Tomin Bank Japan 101
Seoulbank South Korea 112 Tomato Bank Japan 227
Setouchi Bank Japan 210 Tottori Bank Japan 214
Shanghai Commercial & Savings Bank Taiwan 161 Towa Bank Japan 136
Shanghai Commercial Bank Hong Kong 168 Toyama Bank Japan 285
Shanghai Pudong Development Bank China 93
Shenzhen Development Bank China 159
Shiga Bank
Shikoku Bank
Shimizu Bank
Japan
Japan
Japan
68
99
166
U
Uco Bank India 200
Shinhan Bank South Korea 54 UFJ Holdings Japan 4
Shinkin Central Bank Japan 14 Union Bank of India India 169
Shinsei Bank Japan 31 Union Bank of Taiwan Taiwan 228
Shinwa Bank Japan 139 United Bank Limited Pakistan 290
Shizuoka Bank Japan 30 United Bank of India India 240
Shoko Chukin Bank Japan 18 United Coconut Planters Bank Philippines 296
Shokusan Bank Japan 233 United Overseas Bank Singapore 32
Siam City Bank Thailand 197 United World Chinese Com. Bank Taiwan 96
Siam Commercial Bank Thailand 113 UOB (Malaysia) Malaysia 274
Sonali Bank Bangladesh 256 UTI Bank India 279
Southern Bank Malaysia 204
St George Bank Australia 75
Standard Chartered Bank Malaysia
State Bank of Bikaner & Jaipur
State Bank of Hyderabad
Malaysia
India
India
203
269
245
V
Vijaya Bank India 273
State Bank of India India 26
State Bank of Patiala India 267
State Bank of Travancore
Sumitomo Mitsui Banking Corporation
Sumitomo Trust & Banking
India
Japan
Japan
278
2
16
W
Westpac Banking Corp Australia 21
Suncorp-Metway Australia 124 Westpac Banking Corporation (NZ) New Zealand 117
Sunny Bank Taiwan 272 Wing Hang Bank Hong Kong 192
Suruga Bank Japan 91 Wing Lung Bank Hong Kong 180
Syndicate Bank India 212

T Y
Yamagata Bank Japan 135
Ta Chong Bank Taiwan 216 Yamaguchi Bank Japan 58
Taiko Bank Japan 172 Yamanashi Chuo Bank Japan 102
Tainan Business Bank Taiwan 262
Taipeibank Taiwan 116 77 Bank Japan 50
Taishin Financial Holding Taiwan 174

Bank-specific footnotes: • a - Formed from the merger of Fuji Bank, Dai-ichi Kangyo Bank and Industrial Bank of Japan . The Mizuho stable includes: Mizuho Holdings, Mizuho Corp
Bank, Mizuho Securities and Mizuho Trust & Banking. Yasuda Trust & Banking Co., which has been undergoing restructuring under the Mizuho group’s umbrella, has also renamed
itself Mizuho Asset Trust & Banking Co. • b - Sumitomo Bank and Sakura Bank merged to form Sumitomo Mitsui Banking Corporation in April 2001. • c - Holding company established
in April 2001 to oversee operations of Mitsubishi Trust & Banking, Bank of Tokyo Mitsubishi, and Nippon Trust Bank. • d - UFJ Holdings was formed in April 2001 through the merger
of Sanwa Bank, Tokai Bank, and Toyo Trust & Banking. The integration of the UFJ Group reached a key milestone in January 2002 with the birth of UFJ Bank and UFJ Trust Bank. •
e - Daiwa Bank Holdings was set up in December 2001 with the merger of Daiwa Bank, Kinki Osaka Bank and Nara Bank. Asahi Bank came under its umbrella in Mar 2002. The hold-
ing company will change its name to Resona Holdings Inc. in Oct. 1 2002. • f - Asahi Bank came under Daiwa Bank Holdings’ umbrella in Mar 2002. • g - Kookmin Bank was created
in November 2001 by a merger between retail specialist Kookmin Bank and mortgage specialist Housing & Commercial Bank (H&CB). • h - Established on 1 October 2001, Bank of
China (Hong Kong) is a Hong Kong incorporated licensed bank which combined the businesses of ten of the twelve banks in Hong Kong originally under the Bank of China Group. It
was listed on the Hong Kong stock exchange on July 25th 2002. • i - Hanvit Bank absorbed Kyongnam, Kwangju, Peace Bank of Korea and Woori Inv. Bank. These are placed under
the wing of Woori Finance Holdings Co., South Korea’s first financial holding firm, with the name changed from Hanvit to Woori Finance Holdings on 20th May 2002. • j - Nippon Credit
Bank renamed itself Aozora Bank in January 2001. Net profit for FY3/2002 was 18,563 million yen ($141.5mn) - other details not available (NA). • k - Malayan Bank merged with Phile-
oAllied Bank Bhd (PAB) on 1 March 2001. • l - Shinhan Bank: Net profit for 2001 was 347 billion won ($262.1mn) - other details NA. • m - China Merchants Bank listed in Feb 2002. •
n - Bank Mandiri is formed out of the merger of four state banks: Bank Bumi Daya, Bank Dagang Negara, Bank Pembangunan Indonesia and Bank Exim in July 1999. It listed in 2002.
• o - Dao Heng Bank: Data for the 18 months ended Dec 2001. This was changed from June 2001 due to Dao Heng becoming a subsidiary of DBS Bank (Singapore). • p - Bank of
Iwate: Net profit for FY3/2002 was 3.46bn Yen ($26.3mn) - other details NA. • q - Bank of New Zealand is a subsidiary of National Bank of Australia. • r - Punjab National Bank listed in
Mar 2002. • s - Bank of Baroda: Net profit for FY3/2002 was 5,459.3mn rupees ($112.9mn). The net profit is higher due to the significant increase in other income (+41%) - Other details
NA. • t - Shinwa and Kyushu subsequently merged to form Kyushu-Shinwa Holdings in Mar 2002. • u - Bank of The Ryukyus: Net profit for FY3/2002 was 4.88bn Yen ($34.5mn) - other
details NA. • v - Taishin Bank merged with Dah An Bank in Sept 2001 and was renamed Taishin Financial Hldg. Taishin Financial listed in Feb 2002 and is expected to complete the
mergers with Taiwan Securities Corp. and Taishin Bills Finance Corp. in Jan 2003. • w - Bank of Kansai: Net profit for FY3/2002 was 1.452bn Yen ($11mn) - other details NA. • x - CITIC
Ka Wah Bank’s financials do not include those of Hongkong Chinese Bank, which it completed the takeover in January. If included, CITIC Ka Wah would have total assets of $10.2
billion. • y - Bangkok Metropolitan Bank merged with Siam City Bank on 1st April 2002. • z - EON Bank group will list in 2H2002 as EON Capital Bhd. • aa - Fukushima Bank: Net loss
for FY3/2002 was 17.887bn Yen ($136.4mn) - other details NA. • ab - Gifu Bank: Net loss for FY3/2002 was 3.357bn Yen ($25.6mn) - other details NA. • ac - Makoto Bank was renamed
Macoto Bank from 1Jan 2002. • ad - Multi-Purpose Bank successfully completed the merger exercise on 1 January 2001 with International Bank Malaysia, Sabah Bank, Sabah Finance,
Bolton Finance, Amanah Merchant Bank and Bumiputera Merchant Bankers. The name was changed to Alliance Bank and year end from Dec to March (3/2001 nos are for 15 months
vs 12 months for the period before). • ae - Cathay United Bank: Balance Sheet numbers are from Sept 2001 (Dec numbers were NA). • af - Perwira Affin Bank: Pre-tax loss of RM747.1
million ($196.6mn) - other details NA. • ag - Corporation Bank: Balance Sheet numbers are from 3/2001 as the 3/2002 numbers are NA. • ah - Bangkok Metropolitan Bank: Balance
Sheet items as at March 2001• ai - Development Bank of the Philippines: Balance sheet nos are as at June 2002 as more recent nos are not available. • aj -Fukuoka Chuo Bank: Net
profit for FY3/2002 was 0.167bn Yen ($1.3mn) - other details NA. • ak - CITIC Ka Wah Bank announced the completion of the acquisition of HKCB at a consideration of HK$4.2 billion
(1.26X book) on 17 January 2002. The two banks will be operated as separate entities with a view to becoming fully integrated by the end of 2002.

14 The Asian Banker Journal Special Edition

 THE ASIAN BANKER 300

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The Asian Banker Journal Special Edition 15

THE ASIAN BANKER 300

The Region’s Largest Banks

2001 Assets Deposits Loans
Commercial Banks Country
Rank $million Change $million Change Rank $million Change Rank

1 Mizuho Financial Group Japan 1,153,823.6 -7.4% 565,269.6 10.1% 1 645,063.7 -8.3% 1
2 Sumitomo Mitsui Banking Corporation Japan 823,585.5 -9.4% 495,546.6 3.1% 2 485,325.5 -2.9% 2
3 Mitsubishi Tokyo Financial Group Japan 758,706.9 6.4% 456,820.0 -0.3% 3 374,125.3 2.3% 3
4 UFJ Holdings Japan 608,303.9 na 387,327.2 na 5 350,957.9 na 4
5 Industrial and Commercial Bank of China China 521,084.5 8.7% 432,074.3 10.2% 4 320,931.9 10.2% 5
6 Norinchukin Bank Japan 458,874.9 16.9% 278,933.1 9.2% 7 173,905.0 5.8% 10
7 Bank of China Group China 405,664.4 -2.3% 298,930.0 3.6% 6 191,504.1 5.4% 7
8 Daiwa Bank Holdings Japan 342,782.4 na 257,908.9 na 9 228,924.8 na 6
9 China Construction Bank China 333,662.4 9.2% 273,394.2 12.7% 8 181,725.7 8.6% 8
10 Agricultural Bank of China China 262,280.6 -4.5% 217,993.9 13.4% 10 174,203.0 -9.2% 9
11 HSBC Hong Kong 223,491.4 -1.1% 176,731.8 -1.3% 11 86,506.1 3.4% 13
12 Asahi Bank Japan 195,899.8 -17.6% 155,865.2 8.1% 12 131,464.7 -16.4% 11
13 National Australia Bank Australia 191,555.1 9.0% 97,620.4 3.2% 15 106,224.8 6.3% 12
14 Shinkin Central Bank Japan 188,125.9 2.9% 129,451.2 -2.0% 13 71,509.4 44.9% 16
15 Kookmin Bank South Korea 142,867.9 16.2% 104,185.6 9.3% 14 81,671.2 9.4% 14
16 Sumitomo Trust & Banking Japan 127,375.5 -6.5% 62,313.6 5.9% 17 68,037.7 8.9% 18
17 Commonwealth Bank of Australia Australia 117,785.0 5.6% 59,991.3 4.2% 18 69,552.7 2.9% 17
18 Shoko Chukin Bank Japan 106,854.5 0.7% 18,218.5 6.8% 84 75,640.3 -3.4% 15
19 Chuo Mitsui Trust & Banking Japan 99,223.1 -6.3% 57,488.2 0.2% 21 56,551.0 -3.8% 22
20 Bank of China (HK) Hong Kong 98,275.7 na 16,245.0 na 95 39,512.2 -5.4% 25
21 Westpac Banking Corp Australia 97,047.8 13.3% 46,234.0 7.9% 29 63,312.0 13.6% 19
22 Australia & New Zealand Banking Group Australia 94,823.1 7.6% 53,611.1 4.2% 25 63,212.9 6.3% 20
23 Bank of Communications China 85,468.7 12.6% 57,344.9 16.4% 22 39,721.5 12.6% 24
24 DBS Group Holding Singapore 81,740.9 36.0% 57,686.0 32.3% 20 38,170.0 30.4% 27
25 Bank of Yokohama Japan 81,141.7 1.0% 70,759.5 1.5% 16 59,040.1 -2.9% 21
26 State Bank of India India 68,903.2 5.5% 58,201.9 15.9% 19 25,454.0 8.3% 48
27 Bank of Taiwan Taiwan 66,196.3 4.3% 54,593.6 5.8% 24 36,468.4 -7.9% 30
28 Hanvit (Woori) Bank South Korea 63,381.1 11.0% 46,147.6 15.6% 30 35,935.3 11.7% 31
29 Chiba Bank Japan 61,885.2 3.0% 55,448.4 4.0% 23 43,853.4 0.2% 23
30 Shizuoka Bank Japan 61,786.3 -1.4% 53,370.4 1.8% 26 38,747.8 -1.4% 26
31 Shinsei Bank Japan 61,534.2 -14.9% 14,220.4 -13.9% 106 36,616.6 -22.4% 29
32 United Overseas Bank Singapore 61,222.1 70.9% 40,224.6 71.5% 32 34,691.7 102.5% 32
33 Hang Seng Bank Hong Kong 60,887.3 -5.2% 53,190.1 -3.6% 27 28,973.0 1.8% 40
34 Joyo Bank Japan 52,320.6 -3.1% 46,722.3 -0.6% 28 32,638.0 -4.1% 34
35 Bank of Fukuoka Japan 51,374.3 2.5% 44,194.1 -0.4% 31 37,027.8 2.1% 28
36 Taiwan Cooperative Bank Taiwan 51,139.5 7.0% 40,106.5 10.2% 34 32,581.7 -0.8% 35
37 Aozora Bank Japan 47,086.5 -26.5% 13,565.2 -32.6% 111 23,591.1 -24.8% 51
38 Oversea-Chinese Banking Corporation Singapore 46,045.5 42.7% 29,663.4 58.6% 47 28,553.1 50.0% 41
39 Hokuriku Bank Japan 45,532.9 -1.4% 40,131.5 -2.5% 33 33,725.7 -0.8% 33
40 Industrial Bank of Korea South Korea 45,349.7 10.9% 22,736.7 14.2% 68 27,142.4 12.1% 44
41 Hiroshima Bank Japan 43,788.5 2.3% 37,923.6 2.7% 39 29,465.5 -1.9% 38
42 North Pacific Bank Japan 43,672.1 3.5% 39,598.1 1.8% 35 28,281.8 -3.2% 42
43 Hachijuni Bank Japan 43,628.9 -1.7% 39,470.1 -0.9% 36 29,399.7 0.8% 39

1 44
45
46
Gunma Bank
Land Bank of Taiwan
Chohung Bank
Japan
Taiwan
South Korea
43,557.4 1.0%
43,026.1 3.2%
42,769.8 10.7%
38,389.9 1.8%
38,763.0 5.3%
30,674.6 14.6%
38
37
44
28,026.6
29,545.6
26,351.0
2.3%
-5.3%
8.5%
43
37
47
TO 47 Korea Exchange Bank South Korea 42,348.6 11.2% 28,108.4 13.6% 52 26,778.8 9.8% 45
48 Chugoku Bank Japan 41,226.0 4.3% 36,847.0 3.7% 41 20,627.1 -8.2% 59

50 49
50
Ashikaga Bank
77 Bank
Japan
Japan
40,321.3 -4.7%
39,419.6 -0.3%
37,166.2 -3.5%
35,853.4 2.4%
40
42
30,376.3
24,346.1
Generic footnotes: • Except otherwise stated, data pertains to fiscal years ended between June 2001 and March 2002. Asterisk (*) in Notes column denotes data from the 2000
-6.7%
0.4%

accounting period given that the 2001 financials (or full financials) have yet to be released at the time of compilation of TAB300 (cut-off date up till end-June 2002). • Notes - Numbers
36
49

(3,6,9,12) refer to the Fiscal Year’s last month (March, June, Sept, Dec). PL, UL, S, and ULS denote Publicly listed, Unlisted, State-Controlled and Unlisted state-controlled respectively. • All
values are quoted in US dollars and all % changes are calculated using local currencies. • Conversion rates (unit of currency per US$) as at 31st Dec 2001: Australia, A$1.9562 per
US$1; Bangladesh, 59.219 Taka; China, RMB8.2867; Hong Kong, HK$7.7978; India, 48.343 Rupee; Indonesia, 10,505 Rupiah; Japan, 131.14 Yen; Malaysia, 3.8024 Ringgit; New Zealand,
NZ$2.4155; Pakistan, 63.002 Rupee; Singapore, $1.8509; South Korea, 1,323.6 Won; Sri Lanka, 93.181 Rupee; Taiwan, NT$35.0915; Thailand, 44.193 Baht; and Vietnam, 15,797 Dong.
• Assets are the sum of cash & bank balances, marketable securities & other short-term investments, net loans & mortgages, long-term investments, fixed assets and other assets.

16 The Asian Banker Journal Special Edition

 THE ASIAN BANKER 300

BLEEDING: 8 of the top 10 Japanese banks are

in the red with largest individual losses ever

Net Interest Income Net Profit Shareholders' Equity Profit as % of Loans as % Equity as % Notes 2001
$million Change Rank $million Change Rank $million Rank Assets Equity of deposits of Assets Key below & Rank
in index

10,181.5 11.8% 2 -7,442.8 P-L 298 36,079.2 1 -0.6% -20.6% 114.1% 3.1% L/3/a 1
11,055.2 9.5% 1 -3,537.3 P-L 295 22,210.0 5 -0.4% -15.9% 97.9% 2.7% L/3/b 2
8,427.1 13.7% 3 -1,161.5 L-L 293 26,154.0 3 -0.2% -4.4% 81.9% 3.4% L/3/c 3
7,965.3 na 4 -9,359.6 na 299 19,832.1 6 -1.5% -47.2% 90.6% 3.3% L/3/d 4
5,110.2 1.2% 7 711.1 16% 13 23,048.3 4 0.1% 3.1% 74.3% 4.4% ULS/12 5
744.4 -58.1% 34 896.0 44% 9 16,925.3 7 0.2% 5.3% 62.3% 3.7% L/*/3 6
6,146.0 -4.4% 6 954.3 2% 8 26,357.9 2 0.2% 3.6% 64.1% 6.5% ULS/12 7
4,973.7 na 9 -7,106.0 na 297 9,829.6 12 -2.1% -72.3% 88.8% 2.9% L/3/e 8
6,676.4 10.4% 5 623.5 -31% 14 14,499.7 9 0.2% 4.3% 66.5% 4.3% ULS/12 9
4,253.7 -11.9% 10 35.8 L-P 124 15,953.2 8 0.0% 0.2% 79.9% 6.1% ULS/*/12 10
5,036.5 4.3% 8 3,364.7 1% 1 10,660.6 11 1.5% 31.6% 48.9% 4.8% L/12 11
2,946.9 1.2% 12 -4,516.1 L-L 296 5,699.4 20 -2.3% -79.2% 84.3% 2.9% L/3/h 12
3,341.7 15.4% 11 1,064.8 -36% 5 12,042.2 10 0.6% 8.8% 108.8% 6.3% L/9 13
700.0 -9.1% 40 289.9 -12% 26 6,308.9 18 0.2% 4.6% 55.2% 3.4% L/3 14
2,917.0 10.3% 13 1,122.7 19% 4 6,724.1 16 0.8% 16.7% 78.4% 4.7% L/12/g 15
799.5 47.1% 29 -323.9 P-L 285 5,030.1 23 -0.3% -6.4% 109.2% 3.9% L/3 16
2,287.1 7.7% 14 1,225.8 -11% 3 9,402.4 13 1.0% 13.0% 115.9% 8.0% L/6 17
1,007.7 -13.5% 23 -97.7 L-L 262 873.5 114 -0.1% -11.2% 415.2% 0.8% UL/*/3 18
729.5 7.1% 36 -2,255.7 P-L 294 3,933.6 29 -2.3% -57.3% 98.4% 4.0% UL/3 19
1,922.0 -6.6% 156 355.0 -47% 23 6,690.3 17 0.4% 5.3% 243.2% 6.8% UL/12/h 20
2,096.9 10.5% 15 972.8 11% 6 4,961.1 24 1.0% 19.6% 136.9% 5.1% L/9 21
1,959.4 0.8% 16 955.9 7% 7 5,393.6 21 1.0% 17.7% 117.9% 5.7% L/9 22
na na - 868.9 255% 10 4,580.9 27 1.0% 19.0% 69.3% 5.4% UL/12 23
1,219.3 10.7% 21 539.8 -28% 15 7,309.5 14 0.7% 8.9% 66.2% 8.9% L/12 24
1,262.9 1.8% 20 156.0 -24% 47 3,413.0 33 0.2% 4.6% 83.4% 4.2% L/3 25
1,878.5 0.7% 15.4%
Directory
8.3% 17 503.0 52% 17 3,258.1 34 43.7% 4.7% LS/3 26 Index & Bank-
1.2 49.8% 267 273.4 -9% 28 5,344.5 22 0.4% 5.1% 66.8% 8.1% ULS/12 27 specific Notes
1,449.0 15.8% 19 538.6 L-P 16 2,212.5 47 0.8% 24.3% 77.9% 3.5% L/12/i 28
986.3 -1.9% 24 -203.9 -304% 278 2,511.5 39 -0.3% -8.1% 79.1% 4.1% L/3 29
865.6
674.2
-1.8% 26
3.0% 45
58.8
466.8
-58%
-32%
93
19
4,246.5
4,754.7
28
25
0.1%
0.8%
1.4%
9.8%
72.6%
257.5%
6.9%
7.7%
L/3
L/3
30
31
12
Largest Banks
790.3 21.2% 31 499.8 1% 18 7,051.9 15 0.8% 10.8% 86.2% 11.5% L/12 32 in Greater China
1,507.2 -0.3% 18 1,297.0 1% 2 5,780.0 19 2.1% 22.4% 54.5% 9.5% L/12 33
812.4 -0.5% 27 -244.8 -484% 281 2,806.2 35 -0.5% -8.7% 69.9% 5.4% L/3 34
799.5
653.0
-2.1% 28
-19.3% 48
140.2
112.0 259%
L-P 52
61
2,243.5
1,565.1
46
62
0.3%
0.2%
6.3%
7.2%
83.8%
81.2%
4.4%
3.1%
L/3
ULS/6
35
36
28
398.3 330.4% 83 760.2 88909% 12 3,505.3 32 1.6% 21.7% 173.9% 7.4% L/*/3/j 37 Largest Banks
771.6 11.0% 32 424.1 -7% 20 4,749.5 26 0.9% 9.4% 96.3% 10.3% L/12 38 in ASEAN
695.4 1.0% 42 -1,034.8 P-L 292 1,367.4 79 -2.3% -75.7% 84.0% 3.0% L/3 39
792.1
705.6
2.9% 30
0.1% 37
371.8
-316.7
15%
P-L
22
284
3,831.8
1,438.7
31
72
0.8%
-0.7%
9.7%
-22.0%
119.4%
77.7%
8.4%
3.3%
LS/12
L/3
40
41 29
652.8 4.3% 49 53.3 14% 99 1,325.1 81 0.1% 4.0% 71.4% 3.0% L/3 42 Perfomance Rank-
702.3 -4.0% 39 -116.4 P-L 266 2,671.3 37 -0.3% -4.4% 74.5% 6.1% L/3 43 ings
703.0 -1.6% 38 -161.7 P-L 273 2,156.3 48 -0.4% -7.5% 73.0% 5.0% L/3 44
695.8
886.3
743.8
-29.9% 41
11.1% 25
-8.4% 35
160.1 -32%
397.0 429%
171.6 -147%
46
21
42
1,600.4
1,936.8
1,607.9
61
51
60
0.4%
0.9%
0.4%
10.0%
20.5%
10.7%
76.2%
85.9%
95.3%
3.7%
4.5%
3.8%
UL/12
L/12
L/12
45
46
47
30
Country Capsules
546.6 1.1% 57 43.9 2% 115 2,339.5 42 0.1% 1.9% 56.0% 5.7% L/3 48
639.9 -8.1% 51 -976.8 P-L 291 991.3 97 -2.4% -98.5% 81.7% 2.5% L/3 49
654.4 -3.6% 47 175.9 101% 40 2,293.3 43 0.4% 7.7% 67.9% 5.8% L/3
• Deposits are demand, savings, time and other deposits received from customers. • Loans are commercial, consumer and other loans lent out to customers. • Net interest income is
50
32
interest and investment income net of interest expenses. • Net profit is recorded after taxes and provisions for loan losses. • Shareholders’ Equity includes preferred and common equity,
minority interest, disclosed reserves and retained earnings. • Profit as a % of Assets is return on assets; Profit as a % of Equity, return on equity; Loans as a % of Deposits, loan-to-deposit
ratio; Equity as a % of Assets, equty-to-assets ratio. • In the change in Net Profit column, P-L denotes Net profit from the previous period (2000) deteriorating to losses (in 2001), L-P
losses to profits; L-L losses to losses. • na - data not available. Data for rows with incomplete information was primarily complied from several media sources given that financials could not
be sourced from the organisations. • All data in this table is collated and updated to the best of our ability and knowledge. We provide this service with no warranty whatsoever as to the
currency, accuracy, or applicability or the data for any purposes.

The Asian Banker Journal Special Edition 17

 THE ASIAN BANKER 300

The Region’s Largest Banks

2001 Assets Deposits Loans
Commercial Banks Country
Rank $million Change $million Change Rank $million Change Rank

51 Malayan Banking Malaysia 37,054.8 10.9% 25,374.7 17.9% 60 26,648.7 18.1% 46

52 First Commercial Bank Taiwan 36,366.2 3.7% 29,811.3 6.9% 46 23,115.2 0.5% 53
53 CITIC Industrial Bank China 36,214.7 27.9% 29,456.8 29.9% 48 16,617.0 14.1% 72
54 Shinhan Bank South Korea 35,895.6 20.2% 21,396.0 35.3% 71 22,137.8 27.6% 56
55 Hana Bank South Korea 35,823.2 9.7% 26,860.8 17.0% 57 21,846.4 14.7% 57
56 Hua Nan Commercial Bank Taiwan 35,729.6 6.3% 28,750.0 7.7% 50 23,428.8 8.4% 52
57 Bank of Kyoto Japan 34,848.2 11.9% 30,165.2 4.9% 45 20,431.4 0.3% 61
58 Yamaguchi Bank Japan 34,532.9 0.1% 30,967.7 0.9% 43 22,982.0 1.4% 54
59 Kinki Osaka Bank Japan 33,446.7 -1.0% 29,077.9 -5.6% 49 23,706.8 -0.1% 50
60 Chang Hwa Commercial Bank Taiwan 33,149.5 5.7% 20,326.1 9.0% 73 16,643.9 -0.8% 71
61 China Everbright Bank China 32,027.8 30.0% 21,595.0 57.7% 70 13,695.8 21.4% 86
62 Nishi-Nippon Bank Japan 32,004.1 -9.0% 27,247.0 -9.2% 56 22,962.6 -12.4% 55
63 Iyo Bank Japan 31,431.3 2.3% 28,198.4 4.2% 51 20,587.2 1.2% 60
64 China Merchants Bank China 31,162.0 24.7% 25,683.0 29.9% 59 16,916.9 27.7% 70
65 Nanto Bank Japan 31,119.0 1.4% 28,016.9 1.0% 53 18,023.0 -1.9% 66
66 Daishi Bank Japan 30,909.5 2.0% 27,506.1 2.6% 54 18,135.4 4.0% 65
67 Juroku Bank Japan 30,159.8 -1.5% 27,362.0 -1.1% 55 20,812.6 -1.1% 58
68 Shiga Bank Japan 29,671.0 1.6% 26,681.3 2.7% 58 17,624.6 -2.1% 67
69 Bangkok Bank Thailand 28,256.7 1.0% 24,255.0 3.7% 63 16,250.1 -8.9% 74
70 Hyakugo Bank Japan 27,755.2 3.1% 25,122.0 5.0% 61 15,299.6 -1.3% 78
71 San-In Godo Bank Japan 27,544.8 0.2% 23,861.8 1.0% 65 16,372.3 0.6% 73
72 Hokkaido Bank Japan 27,497.4 -3.1% 24,340.6 -5.3% 62 19,127.0 -4.8% 64
73 Taiwan Business Bank Taiwan 27,017.8 7.7% 23,101.2 7.9% 66 17,532.9 -2.8% 68
74 Hyakujushi Bank Japan 26,906.4 2.2% 24,108.5 2.1% 64 19,188.9 0.9% 63
75 St George Bank Australia 25,970.8 2.4% 18,167.4 1.4% 85 20,293.9 0.6% 62
76 Intl Commercial Bank of China Taiwan 25,671.1 4.6% 15,088.3 10.2% 100 13,463.0 -5.0% 89
77 Chinatrust Commercial Bank Taiwan 25,529.9 21.4% 19,123.9 22.5% 80 na na -
78 Ogaki Kyoritsu Bank Japan 25,271.5 1.5% 22,834.6 2.9% 67 17,434.8 3.6% 69
79 Higo Bank Japan 25,128.6 2.1% 22,664.4 2.3% 69 14,630.4 4.6% 82
80 Bank Mandiri Indonesia 24,968.2 3.5% 18,129.1 16.6% 86 4,587.0 12.0% 175
81 Bank of East Asia Hong Kong 23,309.8 1.4% 18,058.5 1.5% 88 14,087.5 4.0% 85
82 Guangdong Development Bank China 23,073.3 28.5% 15,509.6 34.8% 99 11,043.0 43.5% 103
83 Kagoshima Bank Japan 23,027.1 6.4% 20,130.9 6.8% 77 14,562.5 5.8% 83
84 Hokkoku Bank Japan 22,651.4 5.2% 20,687.1 6.4% 72 15,315.0 2.4% 77
85 Krung Thai Bank Thailand 22,101.7 -1.4% 19,610.5 2.7% 79 15,189.6 -3.6% 80
86 Minato Bank Japan 22,069.4 -0.4% 20,173.6 -0.6% 76 16,004.2 -1.7% 76
87 KorAm Bank South Korea 22,050.3 1.8% 12,369.1 -11.9% 122 13,432.4 8.6% 90
88 Kiyo Bank Japan 21,734.9 -10.2% 20,192.8 -3.8% 75 14,369.5 -3.6% 84
89 Toho Bank Japan 21,700.6 0.4% 19,975.4 0.6% 78 13,482.3 -1.4% 88
90 ICICI India 21,535.7 427.5% 6,637.0 125.9% 181 9,729.4 577.7% 116
91 Suruga Bank Japan 21,441.5 -3.4% 20,320.8 -2.3% 74 15,290.7 -4.8% 79
92 Fukuoka City Bank Japan 21,309.1 -3.7% 17,992.8 -10.0% 89 16,147.8 -7.5% 75
93 Shanghai Pudong Development Bank China 20,960.2 33.9% 17,859.9 39.5% 90 9,140.1 8.4% 125

51 94
95
96
Musashino Bank
Bank of Nagoya
United World Chinese Com. Bank
Japan
Japan
Taiwan
20,727.8

20,154.9
3.2%
20,456.8 -1.6%
7.0%
19,010.1 3.7%
18,586.2
16,486.4 8.8%
na
81
82
94
13,618.3 1.3%
na
12,194.7 0.4%
na
87
-
95
TO 97 Korea First Bank South Korea 20,015.1 4.1% 13,448.2 5.3% 116 11,817.0 9.3% 99
98 Keiyo Bank Japan 19,989.0 0.3% 18,262.1 1.4% 83 14,885.7 -1.3% 81

100 99
100
Shikoku Bank
Oita Bank
Japan
Japan
19,980.3
18,809.4
1.6%
1.0%
18,062.8 1.5%
17,002.4 2.7%
87
92
12,952.1 -0.5%
11,998.0 -1.3%
Generic footnotes: • Except otherwise stated, data pertains to fiscal years ended between June 2001 and March 2002. Asterisk (*) in Notes column denotes data from the 2000
accounting period given that the 2001 financials (or full financials) have yet to be released at the time of compilation of TAB300 (cut-off date up till end-June 2002). • Notes - Numbers
92
97

(3,6,9,12) refer to the Fiscal Year’s last month (March, June, Sept, Dec). PL, UL, S, and ULS denote Publicly listed, Unlisted, State-Controlled and Unlisted state-controlled respectively. • All
values are quoted in US dollars and all % changes are calculated using local currencies. • Conversion rates (unit of currency per US$) as at 31st Dec 2001: Australia, A$1.9562 per
US$1; Bangladesh, 59.219 Taka; China, RMB8.2867; Hong Kong, HK$7.7978; India, 48.343 Rupee; Indonesia, 10,505 Rupiah; Japan, 131.14 Yen; Malaysia, 3.8024 Ringgit; New Zealand,
NZ$2.4155; Pakistan, 63.002 Rupee; Singapore, $1.8509; South Korea, 1,323.6 Won; Sri Lanka, 93.181 Rupee; Taiwan, NT$35.0915; Thailand, 44.193 Baht; and Vietnam, 15,797 Dong.
• Assets are the sum of cash & bank balances, marketable securities & other short-term investments, net loans & mortgages, long-term investments, fixed assets and other assets.

18 The Asian Banker Journal Special Edition

 THE ASIAN BANKER 300

MONEY-SPINNER: HSBC (No.11) tops the

list as Asia’s most profitable financial institution

Net Interest Income Net Profit Shareholders' Equity Profit as % of Loans as % Equity as % Notes 2001
$million Change Rank $million Change Rank $million Rank Assets Equity of deposits of Assets Key below & Rank
in index

1,062.5 5.4% 22 220.8 -38% 32 2,721.4 36 0.6% 8.1% 105.0% 7.3% L/6/k 51
640.5 2.3% 50 89.8 -24% 73 2,397.8 40 0.2% 3.7% 77.5% 6.6% L/12 52
na na - 195.5 75% 37 1,228.8 84 0.5% 15.9% 56.4% 3.4% ULS/12 53
672.3 8.7% 46 281.7 230% 27 2,287.5 44 0.8% 12.3% 103.5% 6.4% L/*/12/l 54
622.0 15.4% 54 243.1 1711% 30 1,554.2 63 0.7% 15.6% 81.3% 4.3% L/12 55
na na - 113.2 -17% 60 1,673.7 57 0.3% 6.8% 81.5% 4.7% UL/12 56
361.8 -8.3% 95 35.7 -16% 125 2,531.4 38 0.1% 1.4% 67.7% 7.3% L/3 57
493.0 -3.6% 62 17.3 -66% 170 2,281.7 45 0.1% 0.8% 74.2% 6.6% L/3 58
625.7 12.1% 53 -164.1 L-L 274 865.0 116 -0.5% -19.0% 81.5% 2.6% L/3 59
452.8 -1.9% 71 44.1 -17% 114 1,761.7 54 0.1% 2.5% 81.9% 5.3% L/12 60
305.0 13.4% 111 21.2 -35% 156 1,512.6 66 0.1% 1.4% 63.4% 4.7% ULS/12 61
586.5 -3.9% 55 -428.5 L-L 288 958.5 100 -1.3% -44.7% 84.3% 3.0% L/3 62
521.8 -1.4% 59 45.2 -18% 111 2,017.2 50 0.1% 2.2% 73.0% 6.4% L/3 63
685.6 28.7% 43 166.0 93% 44 592.8 159 0.5% 28.0% 65.9% 1.9% L/12/m 64
465.6 -4.4% 68 -213.0 P-L 279 888.4 112 -0.7% -24.0% 64.3% 2.9% L/3 65
471.8 0.0% 66 -53.0 P-L 248 1,405.1 76 -0.2% -3.8% 65.9% 4.5% L/3 66
499.5 2.5% 61 19.4 -25% 161 1,513.6 65 0.1% 1.3% 76.1% 5.0% L/3 67
429.8 0.5% 77 16.7 -3% 172 1,453.3 69 0.1% 1.1% 66.1% 4.9% L/3 68
536.3 3.0% 58 146.6 L-P 51 977.5 99 0.5% 15.0% 67.0% 3.5% L/12 69
400.6 -4.6% 82 20.9 -28% 158 1,450.3 70 0.1% 1.4% 60.9% 5.2% L/3 70
482.3 -2.5% 64 25.8 -57% 142 1,627.9 59 0.1% 1.6% 68.6% 5.9% L/3 71
447.0 -5.1% 74 34.3 -27% 126 1,198.0 86 0.1% 2.9% 78.6% 4.4% L/3 72
394.6 -5.8% 85 -347.9 P-L 286 1,140.3 89 -1.3% -30.5% 75.9% 4.2% L/12 73
439.8 -1.0% 76 12.6 -31% 183 1,447.6 71 0.0% 0.9% 79.6% 5.4% L/3 74
631.3 5.4% 52 207.0 14% 34 1,853.6 53 0.8% 11.2% 111.7% 7.1% L/9 75
449.7 0.5% 7.2% 89.2%
Directory
-2.4% 73 124.7 -4% 56 1,723.4 55 6.7% L/12 76 Index & Bank-
765.1 27.5% 33 218.4 6% 33 2,108.5 49 0.9% 10.4% na 8.3% L/12 77 specific Notes
389.3 0.6% 87 18.1 -11% 164 991.4 96 0.1% 1.8% 76.4% 3.9% L/3 78
386.2 0.7% 88 13.3 48% 182 1,473.3 67 0.1% 0.9% 64.6% 5.9% L/3 79
676.7
510.1
11.0%
7.6%
44
60
261.4
205.2
132%
-15%
29
35
1,025.9
2,340.1
92
41
1.0%
0.9%
25.5%
8.8%
25.3%
78.0%
4.1%
10.0%
LS/12/n
L/12
80
81
12
Largest Banks
272.4 68.4% 125 33.2 13% 130 635.7 154 0.1% 5.2% 71.2% 2.8% ULS/12 82 in Greater China
369.3 -0.8% 93 46.0 5% 109 1,438.2 73 0.2% 3.2% 72.3% 6.2% L/3 83
350.0 -5.4% 99 23.2 -132% 151 1,379.4 78 0.1% 1.7% 74.0% 6.1% L/3 84
440.8
385.0
42.2%
8.1%
75
89
-99.9
-55.6
P-L
P-L
263
249
1,436.6
578.5
74
163
-0.5%
-0.3%
-7.0%
-9.6%
77.5%
79.3%
6.5%
2.6%
LS/12
L/3
85
86
28
401.6 17.9% 80 147.3 L-P 50 942.1 103 0.7% 15.6% 108.6% 4.3% L/12 87 Largest Banks
356.4 -1.1% 96 -505.6 P-L 289 523.5 170 -2.3% -96.6% 71.2% 2.4% L/3 88 in ASEAN
369.1 -5.6% 94 14.9 L-P 178 852.0 118 0.1% 1.8% 67.5% 3.9% L/3 89
122.7
420.9
46.6%
6.3%
195
78
53.4
-174.5
60%
P-L
98
275
1,365.0
878.3
80
113
0.2%
-0.8%
3.9%
-19.9%
146.6%
75.2%
6.3%
4.1%
L/3
L/3
90
91 29
452.1 6.2% 72 -143.3 L-L 271 472.6 181 -0.7% -30.3% 89.7% 2.2% L/3 92 Perfomance Rank-
273.7 37.4% 124 128.1 33% 54 852.8 117 0.6% 15.0% 51.2% 4.1% L/12 93 ings
332.5 1.5% 105 -71.7 L-L 254 747.1 129 -0.3% -9.6% 71.6% 3.6% L/3 94
na
457.1
393.6
na
59.3%
-2.8%
-
69
86
-15.6
149.8
169.2
P-L
-23%
-27%
235
49
43
175.4
1,856.7
1,153.7
263
52
88
-0.1%
0.7%
0.8%
-8.9%
8.1%
14.7%
na
74.0%
87.9%
0.9%
9.2%
5.8%
L/3
L/12
L/12
95
96
97
30
81.5%
Country Capsules
413.6 -2.0% 79 -197.0 P-L 277 892.3 111 -1.0% -22.1% 4.5% L/3 98
343.7 -1.7% 101 19.9 21% 160 897.8 109 0.1% 2.2% 71.7% 4.5% L/3 99
325.8 -5.6% 106 9.6 8% 191 929.2 106 0.1% 1.0% 70.6% 4.9% L/3
• Deposits are demand, savings, time and other deposits received from customers. • Loans are commercial, consumer and other loans lent out to customers. • Net interest income is
100
32
interest and investment income net of interest expenses. • Net profit is recorded after taxes and provisions for loan losses. • Shareholders’ Equity includes preferred and common equity,
minority interest, disclosed reserves and retained earnings. • Profit as a % of Assets is return on assets; Profit as a % of Equity, return on equity; Loans as a % of Deposits, loan-to-deposit
ratio; Equity as a % of Assets, equty-to-assets ratio. • In the change in Net Profit column, P-L denotes Net profit from the previous period (2000) deteriorating to losses (in 2001), L-P
losses to profits; L-L losses to losses. • na - data not available. Data for rows with incomplete information was primarily complied from several media sources given that financials could not
be sourced from the organisations. • All data in this table is collated and updated to the best of our ability and knowledge. We provide this service with no warranty whatsoever as to the
currency, accuracy, or applicability or the data for any purposes.

The Asian Banker Journal Special Edition 19

 THE ASIAN BANKER 300

The Region’s Largest Banks

2001 Assets Deposits Loans
Commercial Banks Country
Rank $million Change $million Change Rank $million Change Rank

101 Tokyo Tomin Bank Japan 18,256.1 0.3% 16,047.2 -3.3% 96 13,032.0 -3.3% 91
102 Yamanashi Chuo Bank Japan 18,107.5 1.0% 16,647.1 1.5% 93 10,794.0 3.5% 106
103 Thai Farmers Bank Thailand 17,527.6 0.9% 15,037.0 -0.1% 102 10,736.7 -4.4% 108
104 Awa Bank Japan 17,397.4 -8.1% 17,141.9 1.3% 91 1,862.3 -85.3% 252
105 Dao Heng Bank Hong Kong 17,335.1 -4.8% 11,936.8 -8.7% 124 9,179.6 9.6% 123
106 Bank of Iwate Japan 17,330.7 4.0% 15,611.7 0.6% 98 8,376.8 0.2% 133
107 Akita Bank Japan 17,159.3 -1.0% 15,705.0 -0.3% 97 9,944.3 0.9% 114
108 Aichi Bank Japan 16,766.2 -0.4% 15,034.2 0.5% 103 na na -
109 China Minsheng Banking Corp China 16,700.7 97.8% 12,622.6 98.4% 120 8,876.9 96.0% 131
110 Bumiputra-Commerce Bank Malaysia 16,628.5 -3.1% 11,772.1 0.3% 127 10,852.9 9.3% 105
111 Eighteenth Bank Japan 16,595.2 4.8% 14,505.5 5.7% 105 11,340.9 0.7% 101
112 Seoulbank South Korea 16,418.4 13.3% 11,707.4 20.4% 129 9,195.6 44.7% 122
113 Siam Commercial Bank Thailand 16,361.9 0.4% 13,712.1 1.3% 108 10,407.6 -6.4% 111
114 Aomori Bank Japan 16,320.3 1.8% 15,064.3 1.9% 101 10,902.0 4.2% 104
115 Fukui Bank Japan 16,275.3 -1.2% 14,910.2 2.8% 104 11,269.3 1.7% 102
116 Taipeibank Taiwan 16,208.2 -1.5% 13,624.3 -3.9% 110 10,514.5 -8.8% 110
117 Westpac Banking Corporation (NZ) New Zealand 15,805.3 9.0% 9,449.1 24.4% 142 12,779.2 16.3% 94
118 Chiao Tung Bank Taiwan 15,701.5 -1.2% 9,059.6 1.0% 148 11,612.4 1.0% 100
119 Bank of New Zealand New Zealand 15,668.4 7.2% 9,705.2 21.1% 139 12,131.6 5.8% 96
120 Hiroshima-Sogo Bank Japan 15,377.2 -2.3% 13,646.6 -3.0% 109 11,860.1 -1.4% 98
121 Chiba Kogyo Bank Japan 15,371.0 -1.5% 13,496.3 -1.5% 114 10,766.0 1.2% 107
122 Farmers Bank of China Taiwan 15,329.6 0.8% 11,923.1 0.8% 125 10,730.7 0.8% 109
123 Fujian Industrial Bank China 15,193.0 47.0% 10,366.0 68.0% 136 9,038.6 110.0% 128
124 Suncorp-Metway Australia 15,162.6 13.1% 8,643.3 16.5% 152 10,298.5 11.5% 113
125 Canara Bank India 14,937.3 8.6% 13,244.9 8.4% 119 6,852.5 19.0% 144
126 National Bank of NZ New Zealand 14,921.5 16.0% 7,424.1 16.2% 171 12,922.8 20.6% 93
127 Bank of Saga Japan 14,845.1 -1.6% 13,510.9 2.6% 113 9,682.7 -1.6% 117
128 Tochigi Bank Japan 14,833.8 2.9% 13,918.9 4.3% 107 9,752.6 -0.4% 115
129 Michinoku Bank Japan 14,649.4 1.4% 13,327.5 1.5% 117 10,328.0 0.3% 112
130 Hokuetsu Bank Japan 14,487.3 -3.4% 13,470.8 -2.4% 115 9,269.2 -4.7% 121
131 Macquarie Bank Australia 14,235.7 19.1% 3,208.7 -3.7% 251 3,746.5 31.6% 200
132 Public Bank Malaysia 14,002.3 17.7% 10,462.4 17.4% 135 8,077.3 25.9% 135
133 Bank of Ikeda Japan 13,718.4 2.7% 8,862.9 -23.4% 149 9,093.4 -1.0% 126
134 RHB Bank Berhad Malaysia 13,669.3 2.6% 9,633.8 3.6% 140 9,530.1 8.7% 119
135 Yamagata Bank Japan 13,642.1 3.4% 12,429.8 4.1% 121 7,747.4 0.5% 139
136 Towa Bank Japan 13,484.5 1.6% 13,518.9 7.0% 112 9,525.6 1.9% 120
137 Punjab National Bank India 13,136.4 0.0% 13,264.2 14.2% 118 7,109.4 22.6% 143
138 Bank of Baroda India 13,098.5 121.2% 10,493.9 5.1% 134 2,413.3 13.2% 237
139 Shinwa Bank Japan 13,012.3 1.0% 11,725.1 2.1% 128 9,084.8 -1.5% 127
140 Higashi-Nippon Bank Japan 12,843.9 0.5% 11,876.0 0.5% 126 2,452.4 -76.7% 234
141 Miyazaki Bank Japan 12,693.7 1.2% 11,638.9 1.2% 130 8,525.4 1.2% 132
142 Daisan Bank Japan 12,537.7 2.7% 11,145.7 0.2% 131 na na -
143 Ehime Bank Japan 12,112.6 2.9% 10,860.5 1.8% 132 9,158.7 1.5% 124

101 144
145
146
Bank Negara Indonesia
Chukyo Bank
Bank of Shanghai
Indonesia
Japan
China
11,733.7 5.2%
11,665.8 -1.6%
11,624.0 25.9%
8,838.4 -15.1%
10,683.1 -1.6%
9,163.1 21.3%
150
133
145
2,737.6 1.3%
9,036.2 -0.8%
4,954.9 26.8%
227
129
169
TO 147 Hua Xia Bank China 11,477.0 55.6% 8,268.6 47.9% 157 5,345.8 53.2% 165
148 Senshu Bank Japan 11,469.6 1.9% 9,604.7 -2.8% 141 8,294.4 1.5% 134

150 149
150
Daegu Bank
Bank of Western Australia (BankWest)
South Korea
Australia
11,388.9 13.8%
11,339.0 10.5%
8,300.6 18.5%
6,898.4 9.5%
156
176
5,960.0 14.6%
9,613.6 13.1%
Generic footnotes: • Except otherwise stated, data pertains to fiscal years ended between June 2001 and March 2002. Asterisk (*) in Notes column denotes data from the 2000
accounting period given that the 2001 financials (or full financials) have yet to be released at the time of compilation of TAB300 (cut-off date up till end-June 2002). • Notes - Numbers
155
118

(3,6,9,12) refer to the Fiscal Year’s last month (March, June, Sept, Dec). PL, UL, S, and ULS denote Publicly listed, Unlisted, State-Controlled and Unlisted state-controlled respectively. • All
values are quoted in US dollars and all % changes are calculated using local currencies. • Conversion rates (unit of currency per US$) as at 31st Dec 2001: Australia, A$1.9562 per
US$1; Bangladesh, 59.219 Taka; China, RMB8.2867; Hong Kong, HK$7.7978; India, 48.343 Rupee; Indonesia, 10,505 Rupiah; Japan, 131.14 Yen; Malaysia, 3.8024 Ringgit; New Zealand,
NZ$2.4155; Pakistan, 63.002 Rupee; Singapore, $1.8509; South Korea, 1,323.6 Won; Sri Lanka, 93.181 Rupee; Taiwan, NT$35.0915; Thailand, 44.193 Baht; and Vietnam, 15,797 Dong.
• Assets are the sum of cash & bank balances, marketable securities & other short-term investments, net loans & mortgages, long-term investments, fixed assets and other assets.

20 The Asian Banker Journal Special Edition

 THE ASIAN BANKER 300

EXTRA-ORDINARY DRAG: Exposure to failed

businesses muted bottomlines for Australians banks

Net Interest Income Net Profit Shareholders' Equity Profit as % of Loans as % Equity as % Notes 2001
$million Change Rank $million Change Rank $million Rank Assets Equity of deposits of Assets Key below & Rank
in index

344.3 -2.5% 100 -40.1 L-L 246 479.1 179 -0.2% -8.4% 81.2% 2.6% L/3 101
277.3 -4.3% 120 26.9 -21% 141 1,002.6 94 0.1% 2.7% 64.8% 5.5% L/3 102
397.7 14.4% 84 22.8 -20% 152 620.9 155 0.1% 3.7% 71.4% 3.5% L/12 103
334.3 -4.2% 104 16.5 -37% 175 989.9 98 0.1% 1.7% 10.9% 5.7% L/3 104
554.8 37.7% 56 229.5 4% 31 1,721.2 56 1.3% 13.3% 76.9% 9.9% UL/12/o 105
302.5 -0.6% 113 14.8 -69% 179 740.7 132 0.1% 2.0% 53.7% 4.3% L/*/3/p 106
282.6 -8.4% 117 -73.1 P-L 256 904.5 107 -0.4% -8.1% 63.3% 5.3% L/3 107
274.7 -5.6% 122 5.0 41% 210 895.7 110 0.0% 0.6% na 5.3% L/3 108
351.0 81.0% 98 78.0 171% 79 685.5 140 0.5% 11.4% 70.3% 4.1% L/12 109
454.6 -2.1% 70 46.6 -61% 108 1,078.7 91 0.3% 4.3% 92.2% 6.5% UL/12 110
301.8 1.4% 114 5.5 L-P 205 995.2 95 0.0% 0.6% 78.2% 6.0% L/3 111
254.8 -12.9% 133 76.6 L-P 81 517.9 171 0.5% 14.8% 78.5% 3.2% L/12 112
370.8 7.6% 92 9.2 -89% 192 1,422.8 75 0.1% 0.6% 75.9% 8.7% L/12 113
274.3 2.5% 123 10.9 -3% 186 669.0 144 0.1% 1.6% 72.4% 4.1% L/3 114
256.8 -3.6% 132 16.4 L-P 176 677.1 142 0.1% 2.4% 75.6% 4.2% L/3 115
261.9 -30.4% 131 82.7 -44% 76 1,281.3 82 0.5% 6.5% 77.2% 7.9% L/12 116
343.3 -4.2% 102 192.6 14% 38 1,159.3 87 1.2% 16.6% 135.2% 7.3% UL/9 117
na na - 130.8 -45% 53 1,539.2 64 0.8% 8.5% 128.2% 9.8% L/12 118
311.7 13.2% 110 182.2 13% 39 741.5 131 1.2% 24.6% 125.0% 4.7% UL/9/q 119
325.7 2.7% 107 28.5 1144% 137 666.1 145 0.2% 4.3% 86.9% 4.3% L/3 120
282.2 3.8% 118 22.1 3% 154 730.7 133 0.1% 3.0% 79.8% 4.8% L/3 121
150.9 9.9% 178 11.8 -52% 185 715.0 138 0.1% 1.6% 90.0% 4.7% ULS/12 122
na na - 90.7 50% 72 724.1 135 0.6% 12.5% 87.2% 4.8% UL/12 123
262.8 8.2% 129 201.9 18% 36 1,388.9 77 1.3% 14.5% 119.2% 9.2% L/6 124
376.5 -3.3% 91 153.4 160% 48 718.1 137 1.0% 21.4% 51.7% 4.8% LS/3 125
335.7 11.1% 1.2% 19.1% 174.1%
Directory
103 172.2 8% 41 901.3 108 6.0% UL/12 126 Index & Bank-
262.0 -2.9% 130 -127.0 P-L 269 685.1 141 -0.9% -18.5% 71.7% 4.6% L/3 127 specific Notes
288.8 -1.9% 116 -116.2 P-L 265 601.3 157 -0.8% -19.3% 70.1% 4.1% L/3 128
270.5 1.4% 126 17.8 -27% 166 723.8 136 0.1% 2.5% 77.5% 4.9% L/3 129
268.0 -6.7%
87.5 -2.5%
127
235
-83.7
123.7
P-L
15%
258
57
457.0
560.3
186
166
-0.6%
0.9%
-18.3%
22.1%
68.8%
116.8%
3.2%
3.9%
L/3
L/3
130
131
12
Largest Banks
126.3 7.2% 191 51.9 -11% 101 1,654.0 58 0.4% 3.1% 77.2% 11.8% L/12 132 in Greater China
210.0 2.5% 146 -182.9 P-L 276 386.2 206 -1.3% -47.3% 102.6% 2.8% L/3 133
351.9 1.1% 97 91.4 -11% 70 1,225.7 85 0.7% 7.5% 98.9% 9.0% L/6 134
144.0 -38.0%
248.7 -2.2%
184
135
24.7
-158.6
-23%
L-L
147
272
800.0
496.9
124
173
0.2%
-1.2%
3.1%
-31.9%
62.3%
70.5%
5.9%
3.7%
L/3
L/3
135
136
28
474.8 12.6% 65 116.3 21% 58 665.2 146 0.9% 17.5% 53.6% 5.1% L/3/r 137 Largest Banks
400.8 15.9% 81 56.8 -45% 95 694.3 139 0.4% 8.2% 23.0% 5.3% LS/*/3/s 138 in ASEAN
251.1 -1.5% 134 -20.0 L-L 237 650.1 149 -0.2% -3.1% 77.5% 5.0% L/3/t 139
239.4 -6.5%
224.7 -1.6%
137
142
17.9
3.0
L-P
L-P
165
219
646.9
657.6
151
148
0.1%
0.0%
2.8%
0.4%
20.7%
73.2%
5.0%
5.2%
L/3
L/3
140
141 29
228.9 -3.5% 140 -122.9 P-L 268 413.7 195 -1.0% -29.7% na 3.3% L/3 142 Perfomance Rank-
238.0 1.3% 138 2.8 -72% 221 537.4 169 0.0% 0.5% 84.3% 4.4% L/3 143 ings
91.9 19.8% 227 80.7 1% 77 728.0 134 0.7% 11.1% 31.0% 6.2% LS/3 144
203.7 -2.5%
172.9 21.1%
216.8 85.1%
148
162
143
-226.9
101.8
91.1
P-L
13%
47%
280
66
71
488.6
675.3
409.9
176
143
197
-1.9%
0.9%
0.8%
-46.4%
15.1%
22.2%
84.6%
54.1%
64.7%
4.2%
5.8%
3.6%
L/3
ULS/*/12
ULS/*/12
145
146
147
30
Country Capsules
215.6 2.7% 144 51.0 L-P 103 391.8 204 0.4% 13.0% 86.4% 3.4% L/3 148
264.3 14.1% 128 23.3 96% 150 447.6 187 0.2% 5.2% 71.8% 3.9% L/12 149
183.7 -9.5% 159 70.7 2% 83 543.4 168 0.6% 13.0% 139.4% 4.8% L/12
• Deposits are demand, savings, time and other deposits received from customers. • Loans are commercial, consumer and other loans lent out to customers. • Net interest income is
150
32
interest and investment income net of interest expenses. • Net profit is recorded after taxes and provisions for loan losses. • Shareholders’ Equity includes preferred and common equity,
minority interest, disclosed reserves and retained earnings. • Profit as a % of Assets is return on assets; Profit as a % of Equity, return on equity; Loans as a % of Deposits, loan-to-deposit
ratio; Equity as a % of Assets, equty-to-assets ratio. • In the change in Net Profit column, P-L denotes Net profit from the previous period (2000) deteriorating to losses (in 2001), L-P
losses to profits; L-L losses to losses. • na - data not available. Data for rows with incomplete information was primarily complied from several media sources given that financials could not
be sourced from the organisations. • All data in this table is collated and updated to the best of our ability and knowledge. We provide this service with no warranty whatsoever as to the
currency, accuracy, or applicability or the data for any purposes.

The Asian Banker Journal Special Edition 21

 THE ASIAN BANKER 300

The Region’s Largest Banks

2001 Assets Deposits Loans
Commercial Banks Country
Rank $million Change $million Change Rank $million Change Rank

151 Beijing City Commercial Bank China 11,319.3 25.7% 10,221.2 29.9% 137 7,747.4 21.4% 140
152 ANZ Banking Group (NZ) New Zealand 11,256.5 0.9% 7,239.1 10.2% 173 8,946.4 0.5% 130
153 Nanyang Commercial Bank Hong Kong 11,236.3 2.9% 9,254.8 2.5% 143 4,409.4 -5.8% 181
154 Bank of The Ryukyus Japan 11,016.2 2.6% 9,228.8 4.2% 144 7,849.1 2.7% 138
155 Central Bank of India India 10,883.4 11.3% 9,750.6 13.5% 138 4,403.4 13.0% 182
156 Central Trust of China Taiwan 10,735.3 13.6% 4,927.7 -3.8% 206 5,372.0 -8.4% 164
157 Bank of India India 10,446.2 -15.2% 12,351.5 10.1% 123 7,924.8 19.0% 137
158 Hong Leong Bank Malaysia 10,399.6 11.8% 8,197.1 7.7% 160 6,106.6 8.9% 153
159 Shenzhen Development Bank China 10,279.3 26.7% 8,306.2 31.7% 155 6,059.4 120.4% 154
160 Kumamoto Family Bank Japan 10,186.1 -0.2% 9,135.6 0.2% 146 7,941.6 -2.5% 136
161 Shanghai Commercial & Savings Bank Taiwan 10,046.1 3.7% 7,631.3 2.8% 169 3,097.2 -43.9% 216
162 Pusan Bank South Korea 10,003.1 9.9% 7,798.3 11.4% 166 5,402.8 18.5% 163
163 Bank Central Asia Indonesia 9,824.5 7.3% 8,618.7 5.2% 153 1,309.0 66.5% 277
164 Mie Bank Japan 9,805.8 0.9% 9,075.7 1.4% 147 6,190.3 1.5% 149
165 Kagawa Bank Japan 9,482.5 -0.8% 8,612.4 0.4% 154 7,559.5 -0.4% 142
166 Shimizu Bank Japan 9,454.3 1.9% 8,761.7 2.2% 151 6,250.9 0.0% 148
167 Bank of Okinawa Japan 9,420.0 -0.1% 7,999.0 3.0% 162 6,622.6 1.6% 147
168 Shanghai Commercial Bank Hong Kong 9,188.9 9.5% 7,831.8 10.8% 164 3,740.7 2.7% 201
169 Union Bank of India India 9,179.2 13.8% 8,231.6 15.4% 159 4,423.2 22.2% 180
170 Metropolitan Bank and Trust Philippines 9,108.5 6.5% 7,102.6 5.6% 175 4,314.9 -4.4% 183
171 Bank of Ayudhya Thailand 9,051.2 na na na - 7,670.9 na 141
172 Taiko Bank Japan 9,007.5 25.1% 8,233.1 27.7% 158 5,744.6 15.3% 159
173 International Bank of Taipei Taiwan 9,002.9 -0.3% 7,823.2 2.3% 165 5,862.8 -5.1% 157
174 Taishin Financial Holding Taiwan 8,736.3 11.1% 6,694.8 20.4% 179 5,525.3 8.9% 162
175 Kita-Nippon Bank Japan 8,723.8 -1.0% 7,891.1 -2.8% 163 5,581.1 -2.4% 160
176 Bank of Kansai Japan 8,711.7 1.8% 8,045.8 2.2% 161 6,700.1 2.9% 145
177 Hsinchu Intl Bank Taiwan 8,379.1 8.7% 7,717.8 9.9% 168 5,768.1 11.6% 158
178 Thai Military Bank Thailand 8,352.0 9.6% 6,781.6 12.0% 177 6,170.7 1.1% 150
179 ASB Bank – NZ New Zealand 8,330.3 16.5% 7,767.7 16.7% 167 6,695.7 12.3% 146
180 Wing Lung Bank Hong Kong 8,259.4 -1.6% 6,503.7 -0.7% 183 3,729.0 2.5% 203
181 Biwako Bank Japan 8,198.5 -6.0% 7,528.6 -4.9% 170 6,126.5 -6.0% 152
182 Fubon Commercial Bank Taiwan 8,010.5 6.4% 6,469.9 na 184 4,559.6 na 177
183 Tokushima Bank Japan 7,988.0 1.9% 7,336.6 2.9% 172 5,950.7 0.3% 156
184 Bank Sinopac Taiwan 7,934.4 18.5% 6,194.3 9.2% 188 4,650.6 7.3% 171
185 Kyushu Bank Japan 7,929.4 -7.5% 7,153.9 -9.2% 174 6,137.6 0.4% 151
186 Bank of the Philippine Islands Philippines 7,697.3 1.1% 6,127.6 7.1% 190 3,638.5 5.0% 205
187 CITIC Ka Wah Bank Hong Kong 7,621.0 4.9% 5,900.1 -4.7% 192 4,191.2 1.4% 185
188 E.Sun Commercial Bank Taiwan 7,576.6 12.5% 6,555.1 13.1% 182 4,984.3 4.3% 168
189 Bank of Overseas Chinese Taiwan 7,508.0 1.2% 6,744.2 4.5% 178 4,012.0 -17.3% 190
190 Bank of Kochi Japan 7,419.4 0.4% 6,641.1 0.7% 180 5,530.6 1.7% 161
191 Bank Rakyat Indonesia Indonesia 7,253.2 14.9% 5,789.1 18.9% 195 2,814.4 21.9% 225
192 Wing Hang Bank Hong Kong 7,061.2 1.0% 6,179.2 0.3% 189 4,591.5 5.6% 174
193 Nippon Trust Bank Japan 6,982.4 -11.9% 3,279.6 76.5% 250 4,436.4 7.2% 179

151 194
195
196
Sapporo Bank
Indian Overseas Bank
Kanto Bank
Japan
India
Japan
6,862.9
6,846.2
6,768.7
-3.4%
9.2%
0.7%
6,383.3
6,401.3
6,329.6
-3.1%
14.4%
-0.9%
186
185
187
4,999.7
2,851.9
5,011.3
-8.2%
9.2%
-2.7%
167
224
166
TO 197 Siam City Bank Thailand 6,763.3 15.7% 5,932.0 12.6% 191 1,350.0 -65.2% 274
198 Dah Sing Bank Hong Kong 6,659.7 7.9% 4,817.0 0.2% 212 3,798.4 -2.0% 199

200 199
200
EON Bank
Uco Bank
Malaysia
India
6,501.4
6,491.4
38.9%
14.8%
4,552.8
5,553.8
46.3%
24.7%
222
196
4,572.8
2,648.9
Generic footnotes: • Except otherwise stated, data pertains to fiscal years ended between June 2001 and March 2002. Asterisk (*) in Notes column denotes data from the 2000
49.1%
27.0%

accounting period given that the 2001 financials (or full financials) have yet to be released at the time of compilation of TAB300 (cut-off date up till end-June 2002). • Notes - Numbers
176
230

(3,6,9,12) refer to the Fiscal Year’s last month (March, June, Sept, Dec). PL, UL, S, and ULS denote Publicly listed, Unlisted, State-Controlled and Unlisted state-controlled respectively. • All
values are quoted in US dollars and all % changes are calculated using local currencies. • Conversion rates (unit of currency per US$) as at 31st Dec 2001: Australia, A$1.9562 per
US$1; Bangladesh, 59.219 Taka; China, RMB8.2867; Hong Kong, HK$7.7978; India, 48.343 Rupee; Indonesia, 10,505 Rupiah; Japan, 131.14 Yen; Malaysia, 3.8024 Ringgit; New Zealand,
NZ$2.4155; Pakistan, 63.002 Rupee; Singapore, $1.8509; South Korea, 1,323.6 Won; Sri Lanka, 93.181 Rupee; Taiwan, NT$35.0915; Thailand, 44.193 Baht; and Vietnam, 15,797 Dong.
• Assets are the sum of cash & bank balances, marketable securities & other short-term investments, net loans & mortgages, long-term investments, fixed assets and other assets.

22 The Asian Banker Journal Special Edition

 THE ASIAN BANKER 300

TURN-AROUND: South Korean banks posted record profits

after half-decade of losses. NPLs are also at all-time lows

Net Interest Income Net Profit Shareholders' Equity Profit as % of Loans as % Equity as % Notes 2001
$million Change Rank $million Change Rank $million Rank Assets Equity of deposits of Assets Key below & Rank
in index

na na - 85.7 na 74 639.6 153 0.8% 13.4% 75.8% 5.7% UL/12 151

278.6 8.4% 119 164.4 24% 45 493.5 175 1.5% 33.3% 123.6% 4.4% UL/9 152
na na - na na 232 1,470.1 68 na na 47.6% 13.1% UL/12 153
191.5 0.2% 157 39.6 L-P 121 591.6 160 0.4% 6.7% 85.1% 5.4% L/*/3/u 154
317.5 5.9% 108 33.8 251% 129 413.0 196 0.3% 8.2% 45.2% 3.8% L/3 155
116.6 -49.7% 202 20.2 -46% 159 161.6 266 0.2% 12.5% 109.0% 1.5% UL/12 156
380.5 11.2% 90 104.5 100% 63 1,009.5 93 1.0% 10.3% 64.2% 9.7% L/3 157
312.9 7.5% 109 103.7 -12% 65 763.3 128 1.0% 13.6% 74.5% 7.3% L/6 158
na na - 45.9 18% 110 598.8 158 0.4% 7.7% 72.9% 5.8% L/12 159
224.7 -1.5% 141 24.9 L-P 145 579.3 162 0.2% 4.3% 86.9% 5.7% L/3 160
161.1 13.4% 170 48.9 L-P 104 949.6 102 0.5% 5.2% 40.6% 9.5% UL/12 161
242.6 20.5% 136 39.9 405% 120 336.0 215 0.4% 11.9% 69.3% 3.4% L/12 162
487.9 113.7% 63 296.9 73% 25 930.3 105 3.0% 31.9% 15.2% 9.5% L/12 163
161.5 -5.2% 168 8.0 173% 196 442.9 189 0.1% 1.8% 68.2% 4.5% L/3 164
202.3 -1.5% 149 3.6 -83% 216 645.2 152 0.0% 0.6% 87.8% 6.8% L/3 165
150.8 1.8% 179 6.7 -46% 203 474.2 180 0.1% 1.4% 71.3% 5.0% L/3 166
197.5 -7.4% 152 -95.6 P-L 261 389.6 205 -1.0% -24.5% 82.8% 4.1% L/*/3 167
194.4 -4.3% 155 126.7 -8% 55 1,249.2 83 1.4% 10.1% 47.8% 13.6% L/12 168
276.5 9.7% 121 65.0 102% 88 435.8 192 0.7% 14.9% 53.7% 4.7% ULS/3 169
200.4 41.5% 150 40.9 40% 119 1,080.4 90 0.4% 3.8% 60.8% 11.9% L/12 170
na na - -60.4 L-L 252 na - -0.7% na na na L/12 171
163.1 8.6% 167 8.3 -3% 195 395.4 203 0.1% 2.1% 69.8% 4.4% L/3 172
125.2 5.3% 192 61.4 16% 89 818.7 121 0.7% 7.5% 74.9% 9.1% L/12 173
304.4 9.0% 112 29.5 -46% 136 798.2 125 0.3% 3.7% 82.5% 9.1% L/12/v 174
168.8 1.7% 166 -33.4 P-L 244 385.3 207 -0.4% -8.7% 70.7% 4.4% L/3 175
7.8% 83.3% 3.6%
Directory
197.0 3.2% 153 24.7 182% 146 317.8 221 0.3% L/*/3/w 176 Index & Bank-
147.2 1.4% 182 10.5 15178% 189 480.9 178 0.1% 2.2% 74.7% 5.7% L/12 177 specific Notes
103.1 134.2% 210 16.5 L-P 174 308.2 224 0.2% 5.4% 91.0% 3.7% L/12 178
189.4 19.0% 158 75.9 22% 82 339.4 214 0.9% 22.4% 86.2% 4.1% UL/6 179
159.4
155.6
-10.6%
1.3%
172
173
108.5
-111.2
-16%
P-L
62
264
950.4
225.6
101
245
1.3%
-1.4%
11.4%
-49.3%
57.3%
81.4%
11.5%
2.8%
L/12
L/3
180
181
12
Largest Banks
94.1 na 222 68.4 8% 85 835.0 119 0.9% 8.2% 70.5% 10.4% L/12 182 in Greater China
172.5 -1.7% 163 21.0 4% 157 407.8 198 0.3% 5.2% 81.1% 5.1% L/3 183
135.7 11.5% 186 44.2 -9% 113 664.6 147 0.6% 6.7% 75.1% 8.4% L/12 184
178.9
290.1
-3.0%
6.6%
161
115
-66.2
101.6
L-L
72%
253
67
219.8
936.0
248
104
-0.8%
1.3%
-30.1%
10.9%
85.8%
59.4%
2.8%
12.2%
L/3/t
L/12
185
186
28
161.2 8.4% 169 79.1 16% 78 827.9 120 1.0% 9.6% 71.0% 10.9% L/12/x 187 Largest Banks
150.5 29.6% 181 54.9 36% 96 649.8 150 0.7% 8.5% 76.0% 8.6% L/12 188 in ASEAN
98.4 -35.7% 218 -87.4 L-L 260 273.3 230 -1.2% -32.0% 59.5% 3.6% L/12 189
na
468.0
na
76.0%
-
67
8.4
101.3
L-P
214%
194
68
383.4
458.2
208
185
0.1%
1.4%
2.2%
22.1%
83.3%
48.6%
5.2%
6.3%
L/*/3
ULS/12
190
191 29
195.0 -8.5% 154 100.1 -13% 69 778.1 127 1.4% 12.9% 74.3% 11.0% L/12 192 Perfomance Rank-
85.3 -37.0% 236 -32.4 L-L 243 265.7 233 -0.5% -12.2% 135.3% 3.8% L/*/3 193 ings
127.4 -3.6% 190 5.1 -20% 207 242.9 240 0.1% 2.1% 78.3% 3.5% L/3 194
200.2
151.3
na
9.9%
-1.8%
na
151
175
-
47.8
5.4
839.7
99%
-25%
L-P
106
206
11
287.0
321.0
399.2
228
220
201
0.7%
0.1%
12.4%
16.7%
1.7%
210.3%
44.6%
79.2%
22.8%
4.2%
4.7%
5.9%
L/3
L/*/3
L/12/y
195
196
197
30
8.7%
Country Capsules
213.9 8.9% 145 113.8 17% 59 579.5 161 1.7% 19.6% 78.9% UL/12 198
209.8 29.9% 147 52.8 -23% 100 545.8 167 0.8% 9.7% 100.4% 8.4% UL/12/z 199
151.0 10.2% 177 34.0 399% 127 571.2 164 0.5% 6.0% 47.7% 8.8% UL/3
• Deposits are demand, savings, time and other deposits received from customers. • Loans are commercial, consumer and other loans lent out to customers. • Net interest income is
200
32
interest and investment income net of interest expenses. • Net profit is recorded after taxes and provisions for loan losses. • Shareholders’ Equity includes preferred and common equity,
minority interest, disclosed reserves and retained earnings. • Profit as a % of Assets is return on assets; Profit as a % of Equity, return on equity; Loans as a % of Deposits, loan-to-deposit
ratio; Equity as a % of Assets, equty-to-assets ratio. • In the change in Net Profit column, P-L denotes Net profit from the previous period (2000) deteriorating to losses (in 2001), L-P
losses to profits; L-L losses to losses. • na - data not available. Data for rows with incomplete information was primarily complied from several media sources given that financials could not
be sourced from the organisations. • All data in this table is collated and updated to the best of our ability and knowledge. We provide this service with no warranty whatsoever as to the
currency, accuracy, or applicability or the data for any purposes.

The Asian Banker Journal Special Edition 23

 THE ASIAN BANKER 300

The Region’s Largest Banks

2001 Assets Deposits Loans
Commercial Banks Country
Rank $million Change $million Change Rank $million Change Rank

201 Nagano Bank Japan 6,288.7 -0.2% 5,865.2 0.6% 194 4,644.0 -0.4% 172
202 Indian Bank India 6,260.0 13.6% 4,972.6 10.8% 203 2,256.5 15.6% 240
203 Standard Chartered Bank Malaysia Malaysia 6,222.0 0.0% 4,786.0 0.8% 214 4,312.0 -4.3% 184
204 Southern Bank Malaysia 6,166.2 0.0% na na - na na -
205 Andhra Bank India 6,152.1 69.8% 3,825.0 1.1% 236 2,064.6 69.8% 245
206 Bankthai Thailand 6,151.5 15.5% 3,824.0 -2.0% 237 3,190.5 -37.5% 214
207 Chinese Bank Taiwan 6,122.8 0.5% 5,389.6 -0.4% 197 4,677.1 -1.2% 170
208 HSBC Bank Malaysia Malaysia 6,084.9 -5.5% 4,855.7 -2.9% 209 3,616.3 17.4% 206
209 Citibank Malaysia 5,964.7 12.8% 3,868.6 11.2% 234 3,871.2 15.8% 197
210 Setouchi Bank Japan 5,941.8 -0.2% 5,363.9 0.1% 198 4,520.3 -4.7% 178
211 National Bank of Pakistan Pakistan 5,884.7 5.8% 5,023.5 7.4% 201 2,227.3 14.5% 243
212 Syndicate Bank India 5,842.3 4.0% 4,752.5 9.0% 215 2,255.8 12.7% 241
213 Bank of Kaohsiung Taiwan 5,833.2 na 4,649.7 na 217 4,597.5 na 173
214 Tottori Bank Japan 5,787.6 0.9% 5,242.4 1.6% 199 3,872.2 -0.2% 196
215 China Development Industrial Bank Taiwan 5,722.8 13.4% 1,086.8 14.0% 288 2,377.7 13.9% 238
216 Ta Chong Bank Taiwan 5,701.1 3.8% 4,960.7 6.1% 205 na na -
217 Oriental Bank of Commerce India 5,600.1 10.3% 5,893.0 15.4% 193 2,928.6 27.8% 220
218 Cosmos Bank Taiwan 5,586.6 8.9% 4,969.3 9.4% 204 3,739.5 -1.6% 202
219 OCBC Bank (Malaysia) Malaysia 5,582.0 5.5% 3,995.4 -5.4% 230 3,995.4 16.0% 191
220 Grand Commerical Bank Taiwan 5,579.4 -6.8% 4,867.9 -3.8% 208 4,048.8 -7.2% 188
221 ICBC (Asia) Hong Kong 5,578.1 110.6% 3,809.4 84.4% 238 3,593.4 129.1% 207
222 Far Eastern Intl Bank Taiwan 5,557.6 15.4% 4,253.2 3.0% 227 3,873.7 6.9% 195
223 Fukushima Bank Japan 5,491.7 -1.8% 5,110.0 -0.7% 200 4,136.1 -0.1% 186
224 EnTie Commercial Bank Taiwan 5,428.5 -1.5% 4,803.6 na 213 4,097.9 na 187
225 Daito Bank Japan 5,392.6 -0.8% 4,990.0 0.0% 202 3,912.7 -0.3% 193
226 Habib Bank Pakistan 5,351.0 -3.2% 4,333.2 7.6% 225 3,158.6 -2.5% 215
227 Tomato Bank Japan 5,334.2 -70.2% 4,846.4 -70.4% 210 3,960.9 -62.0% 192
228 Union Bank of Taiwan Taiwan 5,280.5 -2.7% 4,556.1 2.2% 221 3,405.5 -14.5% 211
229 Baodao Commercial Bank Taiwan 5,204.9 14.8% 4,558.3 17.5% 220 3,819.9 20.2% 198
230 Allahabad Bank India 5,183.8 14.7% 4,688.6 12.7% 216 2,273.9 14.7% 239
231 Gifu Bank Japan 5,098.9 -7.3% 4,838.7 -6.8% 211 3,912.3 -5.0% 194
232 Liu Chong Hing Bank Hong Kong 5,060.8 1.2% 4,191.7 5.0% 228 2,473.1 2.0% 232
233 Shokusan Bank Japan 5,036.4 0.7% 4,648.8 1.5% 218 3,592.9 0.0% 208
234 Bank Danamon Indonesia 5,001.7 0.7% 3,788.7 29.9% 239 1,009.0 88.2% 287
235 Makoto Bank Taiwan 4,930.8 16.3% 4,332.9 14.4% 226 2,898.5 -0.3% 221
236 HDFC Bank India 4,920.5 52.3% 2,411.5 5.4% 272 1,409.5 62.6% 272
237 Minami-Nippon Bank Japan 4,899.7 -2.9% 4,561.2 -2.6% 219 3,715.0 -4.6% 204
238 Pan Asia Bank Taiwan 4,803.1 1.7% 4,379.5 6.6% 223 3,333.2 -9.2% 212
239 Bank for Foreign Trade of Vietnam (Vietcombank) Vietnam 4,747.7 14.3% 0.0 na - 1,076.2 na 286
240 United Bank of India India 4,711.4 6.0% 4,062.8 6.3% 229 1,411.3 18.9% 271
241 Tohoku Bank Japan 4,699.3 0.0% 4,361.6 1.1% 224 3,410.9 -3.2% 210
242 Bank of America (Asia) Hong Kong 4,655.1 0.6% 3,422.5 4.0% 247 2,871.9 -3.7% 222
243 Equitable PCI Bank Philippines 4,642.4 -14.4% 2,729.8 -10.0% 264 2,041.7 -24.4% 246

201 244
245
246
Chinfon Commercial Bank
State Bank of Hyderabad
Asia Pacific Bank
Taiwan
India
Taiwan
4,578.4 -1.1%
4,575.8 20.6%
4,555.0 2.1%
3,885.4
3,599.8 17.3%
4,868.6 24.4%
na 233
244
207
2,479.5
1,742.3
3,553.6
na
18.8%
19.7%
231
256
209
TO 247 Alliance Bank Group Malaysia 4,502.3 83.5% 3,726.9 82.2% 240 3,280.4 94.9% 213
248 DBS Kwong On Bank Hong Kong 4,443.2 6.5% 3,676.5 11.4% 242 3,075.1 14.4% 218

250 249
250
Bank of Maharashtra
Cathay United Bank
India
Taiwan
4,441.3 12.8%
4,213.6 16.8%
3,957.3 12.4%
na na
232
-
1,707.6
na
Generic footnotes: • Except otherwise stated, data pertains to fiscal years ended between June 2001 and March 2002. Asterisk (*) in Notes column denotes data from the 2000
-6.6%
na

accounting period given that the 2001 financials (or full financials) have yet to be released at the time of compilation of TAB300 (cut-off date up till end-June 2002). • Notes - Numbers
258
-

(3,6,9,12) refer to the Fiscal Year’s last month (March, June, Sept, Dec). PL, UL, S, and ULS denote Publicly listed, Unlisted, State-Controlled and Unlisted state-controlled respectively. • All
values are quoted in US dollars and all % changes are calculated using local currencies. • Conversion rates (unit of currency per US$) as at 31st Dec 2001: Australia, A$1.9562 per
US$1; Bangladesh, 59.219 Taka; China, RMB8.2867; Hong Kong, HK$7.7978; India, 48.343 Rupee; Indonesia, 10,505 Rupiah; Japan, 131.14 Yen; Malaysia, 3.8024 Ringgit; New Zealand,
NZ$2.4155; Pakistan, 63.002 Rupee; Singapore, $1.8509; South Korea, 1,323.6 Won; Sri Lanka, 93.181 Rupee; Taiwan, NT$35.0915; Thailand, 44.193 Baht; and Vietnam, 15,797 Dong.
• Assets are the sum of cash & bank balances, marketable securities & other short-term investments, net loans & mortgages, long-term investments, fixed assets and other assets.

24 The Asian Banker Journal Special Edition

 THE ASIAN BANKER 300

BOOM : Profit expansion of at least 50% was the norm with India
banks enjoying handsome contributions from Treasury operations

Net Interest Income Net Profit Shareholders' Equity Profit as % of Loans as % Equity as % Notes 2001
$million Change Rank $million Change Rank $million Rank Assets Equity of deposits of Assets Key below & Rank
in index

129.6 -0.7% 189 -15.4 P-L 234 313.1 222 -0.2% -4.9% 79.2% 5.0% L/3 201
109.8 7.2% 205 6.9 L-P 202 865.7 115 0.1% 0.8% 45.4% 13.8% ULS/3 202
170.9 -11.4% 164 -20.0 P-L 238 na - -0.3% na 90.1% na UL/12 203
na na - 59.9 65% 91 601.6 156 1.0% 10.0% na 9.8% L/12 204
na na - 41.8 67% 117 na - 0.7% na 54.0% na L/3 205
-16.8 -57.3% 270 24.2 L-P 149 261.0 234 0.4% 9.3% 83.4% 4.2% LS/12 206
92.9 -22.5% 225 -19.4 -726% 236 442.1 190 -0.3% -4.4% 86.8% 7.2% L/12 207
169.7 -2.4% 165 103.8 -10% 64 431.5 193 1.7% 24.1% 74.5% 7.1% UL/12 208
na na - 83.6 5% 75 na - 1.4% na 100.1% na UL/12 209
125.2 0.5% 193 4.2 302% 213 281.5 229 0.1% 1.5% 84.3% 4.7% L/3 210
na na - 2.9 L-P 220 180.6 261 0.0% 1.6% 44.3% 3.1% LS/*/12 211
229.1 2.6% 139 51.8 7% 102 252.1 237 0.9% 20.6% 47.5% 4.3% L/3 212
100.9 na 215 22.2 na 153 296.0 225 0.4% 7.5% 98.9% 5.1% L/12 213
93.7 0.6% 223 4.1 -42% 215 259.5 235 0.1% 1.6% 73.9% 4.5% L/3 214
101.4 13.5% 214 345.1 -12% 24 3,840.2 30 6.0% 9.0% 218.8% 67.1% L/12 215
121.9 19.0% 197 13.6 68% 180 510.7 172 0.2% 2.7% na 9.0% L/12 216
na na - 66.3 58% 87 335.0 217 1.2% 19.8% 49.7% 6.0% L/3 217
145.4 12.4% 183 29.6 L-P 135 400.1 200 0.5% 7.4% 75.3% 7.2% L/12 218
151.9 3.6% 174 58.1 -15% 94 460.5 184 1.0% 12.6% 100.0% 8.2% UL/12 219
92.3 -1.3% 226 -71.8 P-L 255 439.2 191 -1.3% -16.4% 83.2% 7.9% L/12 220
62.6 26.6% 251 42.4 120% 116 805.3 122 0.8% 5.3% 94.3% 14.4% L/12 221
103.8 -1.4% 209 13.4 0% 181 485.1 177 0.2% 2.8% 91.1% 8.7% L/12 222
122.0 -4.0% 196 -60.3 P-L 251 177.6 262 -1.1% -34.0% 80.9% 3.2% L/*/3/aa 223
89.8 -15.5% 232 2.5 123% 224 444.1 188 0.0% 0.6% 85.3% 8.2% L/12 224
111.4 -6.5% 204 -25.7 L-L 240 216.6 249 -0.5% -11.9% 78.4% 4.0% L/*/3 225
na na 5.1%
Directory
na na - 17.5 120% 168 272.0 231 na ULS/12 226 Index & Bank-
103.9 -64.1% 208 3.3 -43% 217 214.6 251 0.1% 1.5% 81.7% 4.0% L/3 227 specific Notes
90.2 -24.1% 231 2.0 -84% 227 471.4 182 0.0% 0.4% 74.7% 8.9% L/12 228
76.2 -17.8% 240 6.6 -25% 204 351.0 212 0.1% 1.9% 83.8% 6.7% L/12 229
151.1
102.0
7.3%
-8.7%
176
213
16.6
-128.3
101%
P-L
173
270
202.8
108.4
254
278
0.3%
-2.5%
8.2%
-118.4%
48.5%
80.9%
3.9%
2.1%
UL/3
L/*/3/ab
230
231
12
Largest Banks
102.9 -15.2% 211 44.4 -24% 112 743.3 130 0.9% 6.0% 59.0% 14.7% L/12 232 in Greater China
96.3 -3.6% 221 7.3 -18% 198 211.2 252 0.1% 3.5% 77.3% 4.2% L/3 233
180.9 62.0% 160 69.1 114% 84 397.3 202 1.4% 17.4% 26.6% 7.9% L/12 234
108.7
130.2
19.0%
24.4%
207
188
8.9
61.4
L-P
41%
193
90
295.5
191.1
226
259
0.2%
1.2%
3.0%
32.2%
66.9%
58.4%
6.0%
3.9%
UL/12/ac
L/3
235
236
28
118.0 1.6% 200 0.6 -87% 231 247.5 238 0.0% 0.2% 81.4% 5.1% L/3 237 Largest Banks
39.0 -46.6% 262 -52.4 P-L 247 287.1 227 -1.1% -18.3% 76.1% 6.0% L/12 238 in ASEAN
na na - 19.0 42% 163 129.9 273 0.4% 14.6% na 2.7% ULS/12 239
124.5
90.3
17.2%
-5.5%
194
230
24.6
-13.5
522%
L-L
148
233
406.3
141.2
199
271
0.5%
-0.3%
6.1%
-9.5%
34.7%
78.2%
8.6%
3.0%
ULS/3
L/3
240
241 29
109.1 -25.1% 206 66.9 -34% 86 804.1 123 1.4% 8.3% 83.9% 17.3% UL/12 242 Perfomance Rank-
99.7 -22.9% 217 2.7 -78% 223 781.7 126 0.1% 0.3% 74.8% 16.8% L/12 243 ings
71.7 -14.1% 244 5.0 L-P 209 335.9 216 0.1% 1.5% 63.8% 7.3% UL/12 244
134.4
69.0
118.9
6.3%
0.1%
53.1%
187
245
199
46.9
19.3
21.7
51%
L-P
4%
107
162
155
206.5
371.1
229.4
253
209
244
1.0%
0.4%
0.5%
22.7%
5.2%
9.5%
48.4%
73.0%
88.0%
4.5%
8.1%
5.1%
ULS/3
L/12
UL/*/3/ad
245
246
247
30
12.7%
Country Capsules
117.0 9.4% 201 30.0 -31% 134 563.0 165 0.7% 5.3% 83.6% L/12 248
121.4 5.1% 198 30.1 222% 133 144.3 268 0.7% 20.8% 43.2% 3.2% ULS/3 249
na na - 31.0 L-P 132 329.0 219 0.7% 9.4% na 7.8% L/12/ae
• Deposits are demand, savings, time and other deposits received from customers. • Loans are commercial, consumer and other loans lent out to customers. • Net interest income is
250
32
interest and investment income net of interest expenses. • Net profit is recorded after taxes and provisions for loan losses. • Shareholders’ Equity includes preferred and common equity,
minority interest, disclosed reserves and retained earnings. • Profit as a % of Assets is return on assets; Profit as a % of Equity, return on equity; Loans as a % of Deposits, loan-to-deposit
ratio; Equity as a % of Assets, equty-to-assets ratio. • In the change in Net Profit column, P-L denotes Net profit from the previous period (2000) deteriorating to losses (in 2001), L-P
losses to profits; L-L losses to losses. • na - data not available. Data for rows with incomplete information was primarily complied from several media sources given that financials could not
be sourced from the organisations. • All data in this table is collated and updated to the best of our ability and knowledge. We provide this service with no warranty whatsoever as to the
currency, accuracy, or applicability or the data for any purposes.

The Asian Banker Journal Special Edition 25

 THE ASIAN BANKER 300

The Region’s Largest Banks

2001 Assets Deposits Loans
Commercial Banks Country
Rank $million Change $million Change Rank $million Change Rank

251 Howa Bank Japan 4,194.2 -2.8% 3,858.8 -2.9% 235 3,078.7 -0.5% 217
252 Chung Shing Bank Taiwan 4,116.7 -19.3% 3,963.5 -12.6% 231 1,715.4 -42.0% 257
253 Perwira Affin Bank Malaysia 4,114.9 4.2% 3,159.8 4.3% 254 2,444.6 -3.5% 235
254 Corporation Bank India 4,075.7 17.5% 3,425.6 16.0% 246 1,792.6 11.4% 254
255 Citibank India India 4,026.6 38.0% 2,906.7 38.0% 259 1,918.2 40.0% 251
256 Sonali Bank Bangladesh 4,013.6 11.2% 3,363.9 17.6% 248 1,705.5 4.1% 259
257 Dena Bank India 3,897.6 5.2% 3,176.2 11.1% 253 1,556.2 8.2% 264
258 Chikuho Bank Japan 3,891.0 1.3% 3,557.1 1.3% 245 2,983.8 -0.4% 219
259 Miyazaki Taiyo Bank Japan 3,883.7 -2.5% 3,603.6 -2.1% 243 2,715.6 -0.2% 228
260 Chekiang First Bank Hong Kong 3,814.2 -2.0% 2,833.6 -0.2% 262 1,636.6 2.2% 261
261 Industrial & Commercial Bank of Vietnam (Vietincombank) Vietnam 3,734.9 25.0% na na - na na -
262 Tainan Business Bank Taiwan 3,696.8 2.6% 3,336.0 2.8% 249 2,430.5 -0.4% 236
263 International Bank of Asia Hong Kong 3,669.3 -2.2% 2,852.8 -4.9% 260 2,101.1 -6.0% 244
264 Bangkok Metropolitan Bank Thailand 3,659.0 na 3,725.8 na 241 4,027.3 na 189
265 Philippine National Bank Philippines 3,623.4 na na na - 1,554.9 na 265
266 Bank of Asia Thailand 3,598.4 2.0% 3,153.5 3.4% 255 2,453.7 na 233
267 State Bank of Patiala India 3,595.9 20.9% 2,846.5 20.6% 261 na na -
268 Bendigo Bank Australia 3,568.9 42.1% 3,184.3 41.7% 252 2,869.8 42.0% 223
269 State Bank of Bikaner & Jaipur India 3,475.2 21.2% 2,412.1 17.4% 271 1,294.3 21.2% 278
270 Development Bank of the Philippines Philippines 3,392.2 na 612.2 na 290 1,577.7 na 263
271 Adelaide Bank Australia 3,369.9 15.4% 2,927.8 24.9% 258 2,783.6 18.7% 226
272 Sunny Bank Taiwan 3,357.6 19.9% 3,047.2 na 256 2,228.7 na 242
273 Vijaya Bank India 3,339.6 13.3% 3,036.8 16.2% 257 1,281.8 8.3% 279
274 UOB (Malaysia) Malaysia 3,293.2 2.9% 2,082.3 8.8% 281 1,919.8 2.2% 249
275 Bank Islam Malaysia Malaysia 3,291.7 23.8% 2,360.8 24.3% 275 1,525.5 28.9% 268
276 AMP Bank Australia 3,081.0 16.9% na na - na na -
277 Jammu & Kashmir Bank India 3,038.5 15.5% 2,670.7 15.6% 265 1,328.8 34.9% 276
278 State Bank of Travancore India 2,995.8 16.5% 2,784.2 21.2% 263 1,538.1 16.3% 267
279 UTI Bank India 2,973.5 33.5% 2,541.6 35.1% 268 1,165.0 15.7% 283
280 Muslim Commercial Bank Pakistan 2,969.0 7.1% 2,453.0 13.6% 270 1,215.6 -11.3% 280
281 Rizal Commercial Banking Corp Philippines 2,952.0 22.2% 2,139.1 30.6% 279 1,776.0 22.5% 255
282 Bank Internasional Indonesia Indonesia 2,927.6 -17.6% 2,379.0 -12.6% 273 446.4 -71.9% 288
283 Bank of Panhsin Taiwan 2,916.3 5.9% 2,371.5 7.9% 274 1,838.8 -2.8% 253
284 Punjab & Sind Bank India 2,845.0 2.6% 2,582.1 4.9% 267 1,153.6 7.6% 284
285 Toyama Bank Japan 2,830.6 2.0% 2,611.1 2.6% 266 1,919.4 -3.1% 250
286 Jeonbuk Bank South Korea 2,797.0 6.6% 2,163.6 8.6% 278 1,330.6 6.9% 275
287 Bank for Investment and Development (BIDV) Vietnam 2,792.0 0.0% na na - 2,690.4 26.0% 229
288 Arab-Malaysian Bank Malaysia 2,782.6 -9.8% 1,723.6 7.6% 286 1,971.5 4.1% 248
289 Fukuoka Chuo Bank Japan 2,685.0 3.5% 2,472.7 3.2% 269 1,997.3 1.4% 247
290 United Bank Limited Pakistan 2,676.5 4.2% 2,263.9 10.7% 277 1,402.9 19.1% 273
291 Hongkong Chinese Bank Hong Kong 2,564.1 -18.7% 2,102.9 -19.3% 280 1,520.5 -8.3% 269
292 Bank Tabungan Negara Indonesia 2,523.5 10.7% 1,350.6 28.4% 287 1,477.3 9.2% 270
293 Bank of Ceylon Sri Lanka 2,499.6 30.4% 785.8 113.9% 289 1,203.8 27.0% 281

251 294
295
296
Lucky Bank
Indusind Bank
United Coconut Planters Bank
Taiwan
India
Philippines
2,474.0
2,316.8
2,308.0
3.5%
29.4%
-17.5%
2,274.9
1,737.6
1,822.0
na
16.9%
-11.3%
276
285
284
1,601.5
1,153.1
1,178.0
na
29.4%
-15.1%
262
285
282
TO 297 Bank Rakyat Malaysia 2,275.8 20.9% 1,934.6 20.5% 282 1,551.9 22.8% 266
298 Bank Lippo Indonesia 2,266.6 5.0% 1,907.7 7.2% 283 381.4 4.8% 289

300 299
300
Thai Danu Bank
Kaohsiung Business Bank
Thailand
Taiwan
2,240.6
2,172.7
13.3%
-9.4%
na
na
na
na
-
-
1,702.8
na
Generic footnotes: • Except otherwise stated, data pertains to fiscal years ended between June 2001 and March 2002. Asterisk (*) in Notes column denotes data from the 2000
11.8%
na

accounting period given that the 2001 financials (or full financials) have yet to be released at the time of compilation of TAB300 (cut-off date up till end-June 2002). • Notes - Numbers
260
-

(3,6,9,12) refer to the Fiscal Year’s last month (March, June, Sept, Dec). PL, UL, S, and ULS denote Publicly listed, Unlisted, State-Controlled and Unlisted state-controlled respectively. • All
values are quoted in US dollars and all % changes are calculated using local currencies. • Conversion rates (unit of currency per US$) as at 31st Dec 2001: Australia, A$1.9562 per
US$1; Bangladesh, 59.219 Taka; China, RMB8.2867; Hong Kong, HK$7.7978; India, 48.343 Rupee; Indonesia, 10,505 Rupiah; Japan, 131.14 Yen; Malaysia, 3.8024 Ringgit; New Zealand,
NZ$2.4155; Pakistan, 63.002 Rupee; Singapore, $1.8509; South Korea, 1,323.6 Won; Sri Lanka, 93.181 Rupee; Taiwan, NT$35.0915; Thailand, 44.193 Baht; and Vietnam, 15,797 Dong.
• Assets are the sum of cash & bank balances, marketable securities & other short-term investments, net loans & mortgages, long-term investments, fixed assets and other assets.
Source: Asian Banker Research
26 The Asian Banker Journal Special Edition
 THE ASIAN BANKER 300

MERGER MANIA: Government directed consolidations trimmed

Malaysia’s core banks to 10 but benefits have yet to materialise

Net Interest Income Net Profit Shareholders' Equity Profit as % of Loans as % Equity as % Notes 2001
$million Change Rank $million Change Rank $million Rank Assets Equity of deposits of Assets Key below & Rank
in index

92.9 6.8% 224 -36.3 P-L 245 174.2 264 -0.9% -20.8% 79.8% 4.2% L/3 251
-41.4 -165.4% 271 -720.5 L-L 290 105.9 280 -17.5% -680.6% 43.3% 2.6% L/12 252
102.0 21.4% 212 -27.6 P-L 241 351.7 211 -0.7% -7.9% 77.4% 8.5% UL/*/12/af 253
136.6 13.6% 185 77.2 43% 80 256.4 236 1.9% 30.1% 52.3% 6.3% L/3/ag 254
159.7 20.0% 171 59.0 41% 92 na - 1.5% na 66.0% na UL/3 255
-15.7 28.4% 269 2.2 5% 226 95.3 281 0.1% 2.3% 50.7% 2.4% UL/*/12 256
91.6 8.5% 228 2.4 L-P 225 202.0 255 0.1% 1.2% 49.0% 5.2% L/3 257
80.3 0.2% 239 2.7 0% 222 220.8 247 0.1% 1.2% 83.9% 5.7% L/3 258
89.7 2.7% 233 4.3 L-P 212 186.4 260 0.1% 2.3% 75.4% 4.8% L/3 259
72.8 -26.6% 243 28.4 -49% 138 496.2 174 0.7% 5.7% 57.8% 13.0% L/12 260
na na - 9.8 7% 190 69.6 288 0.3% 14.1% na 1.9% ULS/12 261
65.0 -16.3% 249 5.1 L-P 208 234.4 243 0.1% 2.2% 72.9% 6.3% L/12 262
97.2 10.6% 220 37.9 21% 123 468.8 183 1.0% 8.1% 73.7% 12.8% L/12 263
na na - 1.1 L-P 230 -256.6 292 0.0% na 108.1% -7.0% LS/12/y&ah 264
-7.9 -16.5% 268 -79.9 L-L 257 na - -2.2% na na na L/12 265
74.4 21.4% 242 -86.3 L-L 259 195.5 257 -2.4% -44.1% 77.8% 5.4% L/12 266
na na - 48.2 45% 105 236.2 242 1.3% 20.4% na 6.6% ULS/3 267
82.2 37.5% 237 17.0 56% 171 216.1 250 0.5% 7.9% 90.1% 6.1% L/6 268
na na - 34.0 56% 128 126.0 275 1.0% 27.0% 53.7% 3.6% L/3 269
113.8 na 203 33.2 na 131 334.5 218 1.0% 9.9% 257.7% 9.9% ULS/12/ai 270
17.5 -68.5% 265 17.5 26% 169 143.4 269 0.5% 12.2% 95.1% 4.3% L/6 271
64.4 34.2% 250 16.0 94% 177 198.3 256 0.5% 8.1% 73.1% 5.9% UL/12 272
100.4 5.4% 216 27.1 85% 140 137.2 272 0.8% 19.7% 42.2% 4.1% L/3 273
76.2 -10.7% 241 39.2 -29% 122 344.8 213 1.2% 11.4% 92.2% 10.5% UL/12 274
51.2 19.0% 255 7.0 -45% 201 370.9 210 0.2% 1.9% 64.6% 11.3% L/6 275
239 na na
Directory
na na - -23.8 L-L na - -0.8% na UL/12 276 Index & Bank-
90.7 22.8% 229 53.7 55% 97 193.8 258 1.8% 27.7% 49.8% 6.4% L/3 277 specific Notes
87.8 9.4% 234 25.0 24% 144 106.5 279 0.8% 23.5% 55.2% 3.6% LS/3 278
41.3 103.1% 261 27.7 56% 139 127.2 274 0.9% 21.8% 45.8% 4.3% L/3 279
150.6 37.8% 180
58.2 -14.9% 254
17.6
7.2
51%
-9%
167
199
79.1
312.0
286
223
0.6%
0.2%
22.3%
2.3%
49.6%
83.0%
2.7%
10.6%
L/12
L/12
280
281
12
Largest Banks
3.8 -94.2% 266 -393.2 P-L 287 -209.3 290 -13.4% na 18.8% -7.2% L/12 282 in Greater China
45.8 -10.4% 259 3.3 27% 218 239.9 241 0.1% 1.4% 77.5% 8.2% UL/12 283
65.5 -5.8% 248 4.8 74% 211 92.0 283 0.2% 5.2% 44.7% 3.2% UL/3 284
47.5 -5.8% 257
47.5 8.5% 258
1.0
-29.4
-63%
P-L
229
242
156.0
92.5
267
282
0.0%
-1.0%
0.7%
-31.7%
73.5%
61.5%
5.5%
3.3%
L/3
L/12
285
286
28
na na - na na - na - na na na na ULS/12 287 Largest Banks
66.0 9.4% 247 10.6 -11% 187 84.7 285 0.4% 12.6% 114.4% 3.0% L/*/3 288 in ASEAN
60.8 -0.4% 253 1.6 -43% 228 142.8 270 0.1% 1.1% 80.8% 5.3% L/*/3/aj 289
81.5 7.8% 238
66.6 -8.9% 246
-118.5
4.1
P-L
-66%
267
214
38.9
415.2
289
194
-4.4%
0.2%
-304.6%
1.0%
62.0%
72.3%
1.5%
16.2%
ULS/12
UL/12/ak
290
291 29
21.3 -146.2% 264 11.9 -109% 184 79.1 287 0.5% 15.0% 109.4% 3.1% ULS/12 292 Perfomance Rank-
61.7 -13.3% 252 7.5 -66% 197 119.3 276 0.3% 6.3% 153.2% 4.8% ULS/*/12 293 ings
45.7 25.3% 260 7.1 -20% 200 162.2 265 0.3% 4.4% 70.4% 6.6% L/12 294
33.7
na
na
2.2% 263
na -
na -
10.5
-55.8
41.4
25%
P-L
86%
188
250
118
116.2
220.9
245.4
277
246
239
0.5%
-2.4%
1.8%
9.0%
-25.3%
16.9%
66.4%
64.7%
80.2%
5.0%
9.6%
10.8%
L/3
ULS/*/12
UL/*/12
295
296
297
30
Country Capsules
97.6 55.6% 219 25.8 10% 143 266.2 232 1.1% 9.7% 20.0% 11.7% L/12 298
48.7 18.3% 256 3.9 -101% 282 89.6 284 0.2% 4.3% na 4.0% L/12 299
na na - -270.6 L-L 283 -245.4 291 -12.5% na na -11.3% L/12
• Deposits are demand, savings, time and other deposits received from customers. • Loans are commercial, consumer and other loans lent out to customers. • Net interest income is
300
32
interest and investment income net of interest expenses. • Net profit is recorded after taxes and provisions for loan losses. • Shareholders’ Equity includes preferred and common equity,
minority interest, disclosed reserves and retained earnings. • Profit as a % of Assets is return on assets; Profit as a % of Equity, return on equity; Loans as a % of Deposits, loan-to-deposit
ratio; Equity as a % of Assets, equty-to-assets ratio. • In the change in Net Profit column, P-L denotes Net profit from the previous period (2000) deteriorating to losses (in 2001), L-P
losses to profits; L-L losses to losses. • na - data not available. Data for rows with incomplete information was primarily complied from several media sources given that financials could not
be sourced from the organisations. • All data in this table is collated and updated to the best of our ability and knowledge. We provide this service with no warranty whatsoever as to the
currency, accuracy, or applicability or the data for any purposes.

The Asian Banker Journal Special Edition 27

THE ASIAN BANKER 300

The Largest Banks In Greater China

Assets Net Profits Return on Return on Top 300
Rank Commercial Banks Country ($mn) ($mn) Asset (%) Equity (%) Rank
1 Industrial and Commercial Bank of China China 521,085 711 0.14% 3.1% 5
2 Bank of China Group China 405,664 954 0.24% 3.6% 7
3 China Construction Bank China 333,662 624 0.19% 4.3% 9
4 Agricultural Bank of China China 262,281 36 0.01% 0.2% 10
5 HSBC Hong Kong 223,491 3,365 1.51% 31.6% 11
6 Bank of China (HK) Hong Kong 98,279 355 0.4% 5.3% 20
7 Bank of Communications China 85,469 869 1.02% 19.0% 23
8 Bank of Taiwan Taiwan 66,196 273 0.41% 5.1% 27
9 Hang Seng Bank Hong Kong 60,887 1,297 2.13% 22.4% 33
10 Taiwan Cooperative Bank Taiwan 51,140 112 0.22% 7.2% 36
11 Land Bank of Taiwan Taiwan 43,026 160 -0.37% -10.0% 45
12 First Commercial Bank Taiwan 36,366 90 0.25% 3.7% 52
13 CITIC Industrial Bank China 36,215 195 0.54% 15.9% 53
14 Hua Nan Commercial Bank Taiwan 35,730 113 0.32% 6.8% 56
15 Chang Hwa Commercial Bank Taiwan 33,150 44 0.13% 2.5% 60
16 China Everbright Bank China 32,028 21 0.07% 1.4% 61
17 China Merchants Bank China 31,162 166 0.53% 28.0% 64
18 Taiwan Business Bank Taiwan 27,018 -348 -1.29% -30.5% 73
19 Intl Commercial Bank of China Taiwan 25,671 125 0.49% 7.2% 76
20 Chinatrust Commercial Bank Taiwan 25,530 218 0.86% 10.4% 77
21 Bank of East Asia Hong Kong 23,310 205 0.88% 8.8% 81
22 Guangdong Development Bank China 23,073 33 0.14% 5.2% 82
23 Shanghai Pudong Development Bank China 20,960 128 0.61% 15.0% 93
24 United World Chinese Com. Bank Taiwan 20,155 150 0.74% 8.1% 96
25 Dao Heng Bank Hong Kong 17,335 230 1.32% 13.3% 105
26 China Minsheng Banking Corp China 16,701 78 0.47% 11.4% 109
27 Taipeibank Taiwan 16,208 83 0.51% 6.5% 116
28 Chiao Tung Bank Taiwan 15,702 131 0.83% 8.5% 118
29 Farmers Bank of China Taiwan 15,330 12 0.08% 1.6% 122
30 Fujian Industrial Bank China 15,193 91 0.60% 12.5% 123
31 Bank of Shanghai China 11,624 102 0.88% 15.1% 146
32 Hua Xia Bank China 11,477 91 0.79% 22.2% 147
33 Beijing City Commercial Bank China 11,319 86 0.76% 13.4% 151
34 Nanyang Commercial Bank Hong Kong 11,236 na na na 153
35 Central Trust of China Taiwan 10,735 20 0.19% 12.5% 156
36 Shenzhen Development Bank China 10,279 46 0.45% 7.7% 159
37 Shanghai Commercial & Savings Bank Taiwan 10,046 49 0.49% 5.2% 161
38 Shanghai Commercial Bank Hong Kong 9,189 127 1.38% 10.1% 168
39 International Bank of Taipei Taiwan 9,003 61 0.68% 7.5% 173
40 Taishin Financial Holding Taiwan 8,736 30 0.34% 3.7% 174
41 Hsinchu Intl Bank Taiwan 8,379 10 0.13% 2.2% 177
42 Wing Lung Bank Hong Kong 8,259 108 1.31% 11.4% 180
43 Fubon Commercial Bank Taiwan 8,010 68 0.85% 8.2% 182
44 Bank Sinopac Taiwan 7,934 44 0.56% 6.7% 184
45 CITIC Ka Wah Bank Hong Kong 7,621 79 1.04% 9.6% 187
46 E.Sun Commercial Bank Taiwan 7,577 55 0.73% 8.5% 188
47 Bank of Overseas Chinese Taiwan 7,508 -87 -1.16% -32.0% 189
48 Wing Hang Bank Hong Kong 7,061 100 1.42% 12.9% 192
49 Dah Sing Bank Hong Kong 6,660 114 1.71% 19.6% 198
50 Chinese Bank Taiwan 6,123 -19 -0.32% -4.4% 207
Source: Asian Banker Research

28 The Asian Banker Journal Special Edition

 THE ASIAN BANKER 300

The Largest Banks In ASEAN

Assets Net Profits Return on Return on Top 300
Rank Commercial Banks Country ($mn) ($mn) Asset (%) Equity (%) Rank

1 DBS Group Holding Singapore 81,741 540 0.7% 7.4% 24

2 United Overseas Bank Singapore 61,222 500 0.8% 7.1% 32
3 Oversea-Chinese Banking Corporation Singapore 46,045 424 0.9% 8.9% 38
4 Malayan Banking Malaysia 37,055 221 0.6% 8.1% 51
5 Bangkok Bank Thailand 28,257 147 0.5% 15.0% 69
6 Bank Mandiri Indonesia 24,968 261 1.0% 25.5% 80
7 Krung Thai Bank Thailand 22,102 -100 -0.5% -7.0% 85
8 Thai Farmers Bank Thailand 17,528 23 0.1% 3.7% 103
9 Bumiputra-Commerce Bank Malaysia 16,628 47 0.3% 4.3% 110
10 Siam Commercial Bank Thailand 16,362 9 0.1% 0.6% 113
11 Public Bank Malaysia 14,002 52 0.4% 3.1% 132
12 RHB Bank Berhad Malaysia 13,669 91 0.7% 7.5% 134
13 Bank Negara Indonesia Indonesia 11,734 81 0.7% 11.1% 144
14 Hong Leong Bank Malaysia 10,400 104 1.0% 13.6% 158
15 Bank Central Asia Indonesia 9,824 297 3.0% 31.9% 163
16 Metropolitan Bank and Trust Philippines 9,108 41 0.4% 3.8% 170
17 Bank of Ayudhya Thailand 9,051 -60 -0.7% na 171
18 Thai Military Bank Thailand 8,352 17 0.2% 5.4% 178
19 Bank of the Philippine Islands Philippines 7,697 102 1.3% 10.9% 186
20 Bank Rakyat Indonesia Indonesia 7,253 101 1.4% 22.1% 191
21 Siam City Bank Thailand 6,763 840 12.4% 210.3% 197
22 EON Bank Malaysia 6,501 53 0.8% 9.7% 199
23 Standard Chartered Bank Malaysia Malaysia 6,222 -20 -0.3% na 203
24 Southern Bank Malaysia 6,166 60 1.0% 10.0% 204
25 Bankthai Thailand 6,151 24 0.4% 9.3% 206
26 HSBC Bank Malaysia Malaysia 6,085 104 1.7% 24.1% 208
27 Citibank Malaysia 5,965 84 1.4% na 209
28 OCBC Bank (Malaysia) Malaysia 5,582 58 1.0% 12.6% 219
29 Bank Danamon Indonesia 5,002 69 1.4% 17.4% 234
30 Bank for Foreign Trade of Vietnam (Vietcombank) Vietnam 4,748 19 0.4% 14.6% 239
31 Equitable PCI Bank Philippines 4,642 3 0.1% 0.3% 243
32 Alliance Bank Malaysia 4,502 22 0.5% 9.5% 247
33 Perwira Affin Bank Malaysia 4,115 -28 -0.7% -7.9% 253
34 Industrial & Commercial Bank of Vietnam (Vietincombank) Vietnam 3,735 10 0.3% 14.1% 261
35 Bangkok Metropolitan Bank Thailand 3,659 1 0.0% na 264
36 Philippine National Bank Philippines 3,623 -80 -2.2% na 265
37 Bank of Asia Thailand 3,598 -86 -2.4% -44.1% 266
38 Development Bank of the Philippines Philippines 3,392 33 1.0% 9.9% 270
39 UOB (Malaysia) Malaysia 3,293 39 1.2% 11.4% 274
40 Bank Islam Malaysia Malaysia 3,292 7 0.2% 1.9% 275
41 Rizal Commercial Banking Corp Philippines 2,952 7 0.2% 2.3% 281
42 Bank Internasional Indonesia Indonesia 2,928 -393 -13.4% na 282
43 Bank for Investment and Development (BIDV) Vietnam 2,792 na na na 287
44 Arab-Malaysian Bank Malaysia 2,783 11 0.4% 12.6% 288
45 Bank Tabungan Negara Indonesia 2,523 12 0.5% 15.0% 292
46 United Coconut Planters Bank Philippines 2,308 -56 -2.4% -25.3% 297
47 Bank Rakyat Malaysia 2,276 41 1.8% 16.9% 298
48 Bank Lippo Indonesia 2,267 26 1.1% 9.7% 299
49 DBS Thai Danu Thailand 2,241 4 0.2% 4.3% 300
Source: Asian Banker Research

The Asian Banker Journal Special Edition 29

THE ASIAN BANKER 300

Performance Rankings
The Largest Profits The Largest Gain In Profits
Net Profits Top 300 Gain in Top 300
Rank Commercial Banks Rank Commercial Banks
($mn) Rank Profits ($mn) Rank
1 HSBC 3,364.7 11 1 Hanvit (Woori) Bank * 2,810.0 28
2 Hang Seng Bank 1,297.0 33 2 Siam City Bank * 1,004.2 197
3 Commonwealth Bank of Australia 1,225.8 17 3 Aozora Bank 759.3 37
4 Kookmin Bank 1,122.7 15 4 Bank of Fukuoka * 726.1 35
5 National Australia Bank 1,064.8 13 5 Bank of Communications 623.9 23
6 Westpac Banking Corp 972.8 21 6 Thai Military Bank * 583.6 178
7 Australia & New Zealand Banking Group 955.9 22 7 Bangkok Bank * 569.8 69
8 Bank of China Group 954.3 7 8 Senshu Bank * 564.5 148
9 Norinchukin Bank 896.0 6 9 Korea Exchange Bank * 539.4 47
10 Bank of Communications 868.9 23 10 Seoulbank * 469.3 112
11 Siam City Bank 839.7 197 11 KorAm Bank * 446.6 87
12 Aozora Bank 760.2 37 12 Chohung Bank 322.0 46
13 Industrial and Commercial Bank of China 711.1 5 13 Thai Danu Bank * 289.6 300
14 China Construction Bank 623.5 9 14 Norinchukin Bank 272.9 6
15 DBS Group Holding 539.8 24 15 Hana Bank 229.7 55
16 Hanvit (Woori) Bank 538.6 28 16 Fukui Bank * 217.9 115
17 State Bank of India 503.0 26 17 Fukuoka City Bank * 207.4 92
18 United Overseas Bank 499.8 32 18 Bank of The Ryukyus * 203.4 154
19 Shinsei Bank 466.8 31 19 Shinhan Bank 196.2 54
20 Oversea-Chinese Banking Corporation 424.1 38 20 Kookmin Bank 182.8 15
21 Chohung Bank 397.0 46 21 Kumamoto Family Bank * 173.9 160
22 Industrial Bank of Korea 371.8 40 22 State Bank of India 171.2 26
23 Bank of China (HK) 355.0 20 23 Toho Bank * 169.0 89
24 China Development Industrial Bank 345.1 215 24 Bank Tabungan Negara * 150.6 292
25 Bank Central Asia 296.9 163 25 Bank Mandiri 148.6 80
26 Shinkin Central Bank 289.9 14 26 Shanghai Commercial & Savings Bank * 144.8 161
27 Shinhan Bank 281.7 54 27 Cathay United Bank * 133.8 250
28 Bank of Taiwan 273.4 27 28 Bank of Ayudhya * 132.6 171
29 Bank Mandiri 261.4 80 29 Bank Central Asia 125.4 163
30 Hana Bank 243.1 55 30 Bankthai * 123.3 206
31 Dao Heng Bank 229.5 105 31 Cosmos Bank * 120.7 218
32 Malayan Banking 220.8 51 32 Industrial and Commercial Bank of China 97.3 5
33 Chinatrust Commercial Bank 218.4 77 33 Hokkoku Bank * 96.6 84
34 St George Bank 207.0 75 34 Westpac Banking Corp 96.1 21
35 Bank of East Asia 205.2 81 35 Canara Bank 94.4 125
36 Suncorp-Metway 201.9 124 36 77 Bank 88.2 50
37 CITIC Industrial Bank 195.5 53 37 CITIC Industrial Bank 84.0 53
38 Westpac Banking Corporation (NZ) 192.6 117 38 Eighteenth Bank 81.1 111
39 Bank of New Zealand 182.2 119 39 Taiwan Cooperative Bank * 80.8 36
40 77 Bank 175.9 50 40 China Merchants Bank 80.1 64
41 National Bank of NZ 172.2 126 41 Agricultural Bank of China * 78.7 10
42 Korea Exchange Bank 171.6 47 42 Nippon Trust Bank * 72.0 193
43 Korea First Bank 169.2 97 43 Bank Rakyat Indonesia 69.0 191
44 China Merchants Bank 166.0 64 44 Indian Bank * 63.5 202
45 ANZ Banking Group (NZ) 164.4 152 45 Australia & New Zealand Banking Group 62.9 22
46 Land Bank of Taiwan 160.1 45 46 Dena Bank * 57.4 257
47 Bank of Yokohama 156.0 25 47 Bank of India 52.4 157
48 Canara Bank 153.4 125 48 Asia Pacific Bank * 52.3 246
49 United World Chinese Com. Bank 149.8 96 49 China Minsheng Banking Corp 49.2 109
50 KorAm Bank 147.3 87 50 Industrial Bank of Korea 47.8 40

Source: Asian Banker Research * movement from losses to profits (L-P) Source: Asian Banker Research

30 The Asian Banker Journal Special Edition

 THE ASIAN BANKER 300

Performance Rankings
The Largest in Loans The Largest in Deposits
Loans Top 300 Deposits Top 300
Rank Commercial Banks Rank Commercial Banks
$mn Rank $mn Rank
1 Mizuho Financial Group 645,064 1 1 Mizuho Financial Group 565,270 1
2 Sumitomo Mitsui Banking Corporation 485,325 2 2 Sumitomo Mitsui Banking Corporation 495,547 2
3 Mitsubishi Tokyo Financial Group 374,125 3 3 Mitsubishi Tokyo Financial Group 456,820 3
4 UFJ Holdings 350,958 4 4 Industrial and Commercial Bank of China 432,074 5
5 Industrial and Commercial Bank of China 320,932 5 5 UFJ Holdings 387,327 4
6 Daiwa Bank Holdings 228,925 8 6 Bank of China Group 298,930 7
7 Bank of China Group 191,504 7 7 Norinchukin Bank 278,933 6
8 China Construction Bank 181,726 9 8 China Construction Bank 273,394 9
9 Agricultural Bank of China 174,203 10 9 Daiwa Bank Holdings 257,909 8
10 Norinchukin Bank 173,905 6 10 Agricultural Bank of China 217,994 10
11 Asahi Bank 131,465 12 11 HSBC 176,732 11
12 National Australia Bank 106,225 13 12 Asahi Bank 155,865 12
13 HSBC 86,506 11 13 Shinkin Central Bank 129,451 14
14 Kookmin Bank 81,671 15 14 Kookmin Bank 104,186 15
15 Shoko Chukin Bank 75,640 18 15 National Australia Bank 97,620 13
16 Shinkin Central Bank 71,509 14 16 Bank of Yokohama 70,759 25
17 Commonwealth Bank of Australia 69,553 17 17 Sumitomo Trust & Banking 62,314 16
18 Sumitomo Trust & Banking 68,038 16 18 Commonwealth Bank of Australia 59,991 17
19 Westpac Banking Corp 63,312 21 19 State Bank of India 58,202 26
20 Australia & New Zealand Banking Group 63,213 22 20 DBS Group Holding 57,686 24
Source: Asian Banker Research Source: Asian Banker Research

The Highest Return on Assets The Largest Return on Equity

Growth in ROA Top 300 ROE Top 300
Rank Commercial Banks Assets (%) Rank Commercial Banks
% Rank % Rank
1 Siam City Bank # 15.7% 12.42% 197 1 Siam City Bank # 210.3% 197
2 China Development Industrial Bank 13.4% 6.03% 215 2 ANZ Banking Group (NZ) 33.3% 152
3 Bank Central Asia 7.3% 3.02% 163 3 HDFC Bank 32.2% 236
4 Hang Seng Bank -5.2% 2.13% 33 4 Bank Central Asia 31.9% 163
5 Corporation Bank 17.5% 1.89% 254 5 HSBC 31.6% 11
6 Bank Rakyat 20.9% 1.82% 297 6 Corporation Bank 30.1% 254
7 Jammu & Kashmir Bank 15.5% 1.77% 277 7 China Merchants Bank 28.0% 64
8 Dah Sing Bank 7.9% 1.71% 198 8 Jammu & Kashmir Bank 27.7% 277
9 HSBC Bank Malaysia -5.5% 1.71% 208 9 State Bank of Bikaner & Jaipur 27.0% 269
10 Aozora Bank -26.5% 1.61% 37 10 Bank Mandiri 25.5% 80
11 HSBC -1.1% 1.51% 11 11 Bank of New Zealand 24.6% 119
12 Citibank India 38.0% 1.46% 255 12 Hanvit (Woori) Bank 24.3% 28
13 ANZ Banking Group (NZ) 0.9% 1.46% 152 13 HSBC Bank Malaysia 24.1% 208
14 Bank of America (Asia) 0.6% 1.44% 242 14 State Bank of Travancore 23.5% 278
15 Wing Hang Bank 1.0% 1.42% 192 15 State Bank of Hyderabad 22.7% 245
16 Citibank 12.8% 1.40% 209 16 Hang Seng Bank 22.4% 33
17 Bank Rakyat Indonesia 14.9% 1.40% 191 17 ASB Bank – NZ 22.4% 179
18 Bank Danamon 0.7% 1.38% 234 18 Muslim Commercial Bank 22.3% 280
19 Shanghai Commercial Bank 9.5% 1.38% 168 19 Hua Xia Bank 22.2% 147
20 State Bank of Patiala 20.9% 1.34% 267 20 Bank Rakyat Indonesia 22.1% 191
Source: Asian Banker Research Source: Asian Banker Research
# Note - Siam City Bank reported a net profit of Bt37,110 million ($840mn), up 610% from a loss of Bt7,270 million after transferring all of its NPLs to its own asset management company. The bank also recorded
Bt45,229 million ($1.02bn) in revenues as a result of conversion of doubtful loan reserves set aside earlier. These are one-off items that skewed performance upwards for 2001.

The Asian Banker Journal Special Edition 31

THE ASIAN BANKER 300

Country Capsules
JAPAN: A Sea Of Red Ink
Japan
109 banks in TAB300. Total assets: $6,904.3bn. Total profits: -$38.8bn. Return on assets (ROA): -0.6%.
Return on Equity (ROE): -15.6%
Assets Profits Profitability NPL Top 300
Rank Commercial Bank ($mn) ($mn) ROA (%) ROE (%) Ratio * Rank
1 Mizuho Financial Group 1,153,824 -7,443 -0.6% -20.6% 6.5% 1
2 Sumitomo Mitsui Banking Corporation 823,585 -3,537 -0.4% -15.9% 10.2% 2
3 Mitsubishi Tokyo Financial Group 758,707 -1,161 -0.2% -4.4% 8.9% 3
4 UFJ Holdings ^ 608,304 -9,360 -1.5% -47.2% 4.0% 4
5 Norinchukin Bank * 458,875 896 0.2% 5.3% 3.4% 6
6 Daiwa Bank Holdings 342,782 -7,106 -2.1% -72.3% 7.3% 8
7 Asahi Bank 195,900 -4,516 -2.3% -79.2% 5.1% 12
8 Shinkin Central Bank 188,126 290 0.2% 4.6% 0.9% 14
9 Sumitomo Trust & Banking 127,375 -324 -0.3% -6.4% 5.3% 16
10 Shoko Chukin Bank * 106,855 -98 -0.1% -11.2% 4.9% 18
* Denotes data from 2000 (FY3/2001) given that the 2001 financials were not available at time of compilation.
* All NPL numbers in TAB 300 refer to the gross non-performing loans as a percentage of the total loan book, unless otherwise stated.
^ UFJ Holdings: NPL ratio for FY3/2001
Source: Asian Banker Research

For the fiscal year to March 2002, eight of the top ten Japanese We are less optimistic - although FSA estimates that Japan’s
banks went into the red, principally driven by an economy in banks have circa 40 trillion Yen ($305 billion) of bad debts in
recession, weak loan demand, souring loans from corporate bank- their books, some private estimates run to as high as 100 trillion
ruptcies and lacklustre management. The 109 banks covered in Yen, with the FSA themselves admitting that the total potential
our report averaged a dismal return on equity (ROE) of -15.6%. problem loans, including those on watchlist, could be as much
Japan’s 4 mega-banking giants - Mizuho, Sumitomo Mitsui, as 150 trillion Yen ($1.14 trillion).
Mitsubishi Tokyo Financial Group (MTFG) and UFJ (No.1-4 in The FY3/2002 financial year results already showed that the
TAB300) - formed from absorbing 10 of the largest banks - have combined outstanding NPLs for major banks grew at 30% in
yet to see consolidation synergies and savings filter through. the 6 months to March, up 45% from a year ago. This stands
Acceleration of NPL disposals saw the quartet end the fiscal at 26.8 trillion Yen ($204.2 billion) in March 2002 even after
year with an aggregated net loss of 2.8 trillion Yen ($21.5 bil- the Big Four Group wrote off 6.6 trillion Yen ($51 billion) in
lion), and the top 10 banks Japanese at 4.2 trillion Yen ($32.4 loans against just 3 trillion Yen in net business profits in the
billion) poorer, with a majority moving into the red with the FY3/2002 fiscal year.
largest individual losses ever. With an increasing NPL tide Although official bad loans accounted for 6-7% of the outstand-
and fall in gross lending, net interest income at the bank level ing lending as at the end of the last fiscal year, it is highly probable
remained stagnant. that this percentage is skewed towards the lower end.
On the balance sheet, loan assets declined by 8% on average as
write-off of problem loans exacerbated. Creditworthy borrow- Banks in Japan must seek profits not size
ers took the opportunity to repay loans to avoid rolling-over at Banks are projecting a combined operating profit in the region
higher spreads whilst banks‚ stricter criteria for the renewing of of 3.7 trillion Yen, down circa 10% from FY3/2002 with many
finance for weak borrowers also muted loans growth. pointing to an expected less profitable environment in the
Treasury operations. Top banks are also expecting a return to
Official reports of problem loans - tip of the ice-berg? net profit this year (with the 4 largest banks expecting 475 billion
Results of an inspection done by the FSA (Financial Services Yen) but an overhaul of the banking system will not be an easy
Agency) in April on banks’ lending surprisingly gave the banking task with retained earnings and capital being depleted.
system a virtually clean bill of health. This was possibly because With growth of bad loans showing no signs of abating and the
the probe focused only on loans made to bankrupt borrowers government’s increasing reluctance to reach into the coffers to
(which have largely been accounted for) and not on the huge provide extensive assistance to tackle the balance sheet problems,
volume of grey‚ loans that many believe could still trigger further Japanese banks now need to look beyond the pursuit of size to the
collapses among Japanese banks. Another reason is political - pursuit of profits. The government has to provide a clear sched-
Prime Minister Koizumi’s political future depends heavily on the ule for the financial revitalisation and set the stage for further
success in starving off a banking crisis. As such, regulators are consolidation of the banking sector. Whatever the case, with the
saying that the amount of debts is manageable with FSA suggest- Japanese banks not accepting the pain of real structure change
ing that Japan’s leading banks should be able to dispose of their and NPL disposal absorbing future years of profits, do not expect
worst bad loans within the space of about two years. the banking sector to turn the corner in the near future.

32 The Asian Banker Journal Special Edition

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The Asian Banker Journal Special Edition 33

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Country Capsules
CHINA: Yet Another Bad Loan Story
China
16 banks in TAB300. Total assets: $1,828.2bn. Total profits: $4.2bn. ROA: 0.2%. ROE: 4.5%
Assets Profits Profitability NPL Top 300
Rank Commercial Bank ($mn) ($mn) ROA (%) ROE (%) Ratio Rank
1 Industrial and Commercial Bank of China 521,085 711 0.1% 3.1% 29.8% 5
2 Bank of China Group 405,664 954 0.2% 3.6% 24.0% 7
3 China Construction Bank 333,662 624 0.2% 4.3% 18.1% 9
4 Agricultural Bank of China * 262,281 36 0.0% 0.2% 35.0% 10
5 Bank of Communications 85,469 869 1.0% 19.0% 27.5% 23
6 CITIC Industrial Bank 36,215 195 0.5% 15.9% na 53
7 China Everbright Bank 32,028 21 0.1% 1.4% na 61
8 China Merchants Bank 31,162 166 0.5% 28.0% na 64
9 Guangdong Development Bank 23,073 33 0.1% 5.2% na 82
10 Shanghai Pudong Development Bank ^ 20,960 123 0.6% 20.1% 15.9% 93
* Denotes data from 2000 given that the 2001 financials were not available at time of compilation. NPL figure for ABC as at Sept 2001.
^ Shanghai Pudong: NPL ratio for 2000
Source: Asian Banker Research

China Banks turned in fairly healthy profits in 2001,with at against collectively-owned (shareholding) banks at 4-5 times
least 2 out of the big 4 state-owned banks (Industrial and higher returns.
Commercial Bank of China (ICBC, No.5) and Bank of China
(BOC, No.7) - churning in profit improvements. On the top- Quicker reform progress required
line numbers, financial institutions maintained double-digit Although China’s banks have begun to improve internal
deposits and loans growth - the former was up 16% to 14.4 controls and adopt a more commercial focus, they face
trillion yuan ($1.7 trillion) while loans expanded 11.6% to 11.2 tougher market conditions this year with jostling from
trillion yuan ($1.3 trilllion). foreign banks and domestic interest rate cuts squeezing
margins. Even one of the best-regarded newly-listed Chi-
Bad loans and inefficiencies clogging up the system nese banks, China Merchants Bank (No.64), expects net
But with loans growing rapidly, NPLs remain one of the growth to decelerate to 10-15% in 2002 from 93% in 2001.
major areas of concern. Statistics show that the Big Four Chinese banks need to improve their commercial footing,
banks, which control about two-thirds of the market, have and authorities need to push for better corporate govern-
divested 1.4 trillion yuan ($168.9 billion) in NPLs in 1999 but ance. All these have to be completed before fully opening
still have a hefty 28% bad-debt ratio at the end 2001. If credit up the industry - under the country’s World Trade Organi-
cooperatives are included, unofficial estimates by Standard sation commitments, overseas competition is due to enter
and Poor’s puts the figure closer to 50%, and projects that the Chinese market in five years time.
China is unlikely to cut banks’ NPLs to 15% within five
years as per central bank directive. Instead, this mammoth
task will take a decade and cost $518 billion (equivalent to
half of China’s estimated gross domestic product of $1.1
trillion for 2001).
Another worry is the capital adequacy ratio, a gauge for a
bank’s capital security and capacity to withstand risks. This
ratio for the Big Four, already low at the 1.44% (ABC) to 6.38%
range (BOC) in early 2001, continues to move away from The
Basel Agreement’s mandatory 8%.
Although the Big Four have shifted towards a profit-
maximisation objective, they still make government-directed
loans to state-owned enterprises due to the state-owned
structure. While they dominate China’s banking sector
with 70% of total assets and a huge domestic network, these
giants are largely overstaffed, poorly managed behemoths
ill-equipped to compete with foreign companies. Size has
no direct correlation with profitability here with state banks
averaging ROAs of 0.14% and ROEs of 2.81% in contrast

34 The Asian Banker Journal Special Edition

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The Asian Banker Journal Special Edition 35

THE ASIAN BANKER 300

Country Capsules
TAIWAN: Banking Reforms Of Utmost Importance
Taiwan
43 banks in TAB300. Total assets: $587.0bn. Total profits: $810mn. ROA: 0.14%. ROE: 2.0%
Assets Profits Profitability NPL Top 300
Rank Commercial Bank ($mn) ($mn) ROA (%) ROE (%) Ratio Rank
1 Bank of Taiwan ^ 66,196 273 0.4% 5.1% 3.9% 27
2 Taiwan Cooperative Bank ^ 51,140 112 0.2% 7.2% 7.5% 36
3 Land Bank of Taiwan 43,026 160 0.4% 10.0% 8.5% 45
4 First Commercial Bank 36,366 90 0.2% 3.7% 8.7% 52
5 Hua Nan Commercial Bank 35,730 113 0.3% 6.8% 8.6% 56
6 Chang Hwa Commercial Bank 33,150 44 0.1% 2.5% 13.1% 60
7 Taiwan Business Bank 27,018 -348 -1.3% -30.5% 12.1% 73
8 Intl Commercial Bank of China 25,671 125 0.5% 7.2% 3.8% 76
9 Chinatrust Commercial Bank 25,530 218 0.9% 10.4% 2.9% 77
10 United World Chinese Com. Bank ^ 20,155 150 0.7% 8.1% 6.9% 96
^ NPL ratio as at end 1Q2002
Source: Asian Banker Research

Taiwanese banks posted mixed, but principally weak results NPLs at domestic banks topped NT$1.08 trillion ($30.8 billion)
in 2001 with only 2 out top 10 (by Assets) boasting profit im- or 7.5% of total outstanding loans by end 2001, up from 5.3%
provements. The norm unfortunately, was for a double-digit at the end of 2000.
decline in earnings. For instance, Bank of Taiwan (No.27), the
largest Taiwanese bank by assets, recorded a 9% decline in ...But plague of bad loans linger
profits to NT$9.6 billion ($273 million) while No.45 (Land Bank Already high, the actual loan numbers may even be understated
of Taiwan) saw a more dramatic 32% plunge to NT$5.6 billion - figures from Standard & Poor’s records Taiwan bank’s NPL
($160 million). ratio at 15% at the end of 2001 with expectations of a rise to 18%
of all loans some time this year.
Taiwan’s chronic NPL problem seems not to have improved
NPLs extremely high at several Taiwanese banks despite strenuous efforts to contain it. In all, a total of 12 local
Pan Asia Bk banks recorded an NPL of over 10% at the end of last year, with
Tainan Biz Bk the debt-ridden Chung Shing Bank (No.253), a smallish bank
Bk of Panhsin with total assets of NT$144 billion ($4.1 billion), topping the list
Farmers Bk of China with a staggering overdue loan ratio of 57.2%!
Taiwan bank

Taichung Biz Bk
Bk of Overseas Chinese
Let weaker banks fail
Kao Shin Com. Bk
The failure of the government to sell the troubled Chung Shing,
ChinFon Com. Bk
the first bad-loan plagued bank that the government is offering
Medium Biz Bk of Hualien
to investors, underscores difficulties in cleaning up its banking
system. This development is being closely monitored by inves-
Taitung Biz Bk
tors who criticize the government for its reluctance to bite the
Kaohsiung Biz Bk
bullet and allow the weaker banks to fail, but instead continuing
Chung Shing Bk
to finance their losses through its bank restructuring fund. In
0% 10% 20% 30% 40% 50% 60% contrast, officials in countries like South Korea and Malaysia
NPLs have implemented aggressive financial reforms in the wake of
Source: Asian Banker Research
the 1997/98 regional financial crisis.
With little signs of a recovery in the local property market,
banks will bear large losses from bad loan write-offs and con-
tinue to witness high NPLs in 2002. This arises because some
Record bad loans written off in 2001... 80% to 90% of the banks’ NPLs were extended on collateral of
2001 saw banks working hard to rid themselves of bad debt - properties but prices have fallen by about 40% from the 1980s
statistics released by the Central Bank showed that they wrote peak. Though banks have turned more aggressive in tackling
off a staggering NT$285.7 billion ($8.1 billion) in soured loans, the NPL tide, with the likes of First Commercial (No.52) and
a steep rise from NT$129.4 billion ($3.7 billion) in 2000. The Hua Nan (No.56) beginning to make substantial write-offs - the
finance ministry expects banks to write off another NT$300 bil- bad debt problem is a well-ingrained one that will not go away
lion ($8.5 billion) this year. Even then, the aggregate amount of anytime soon.

36 The Asian Banker Journal Special Edition

 THE ASIAN BANKER 300

SOUTH KOREA: Financial Health In Recovery Mode

South Korea
13 banks in TAB300. Total assets: $491.1bn. Total profits: $3.6bn. ROA: 0.7%. ROE: 15.0%
Assets Profits Profitability NPL Top 300
Rank Commercial Bank ($mn) ($mn) ROA (%) ROE (%) Ratio Rank
1 Kookmin Bank 142,868 1,123 0.8% 16.7% 3.6% 15
2 Hanvit Bank (Woori) 63,381 539 0.8% 24.3% 2.1% 28
3 Industrial Bank of Korea 45,350 372 0.8% 9.7% 2.3% 40
4 Chohung Bank 42,770 397 0.9% 20.5% 3.3% 46
5 Korea Exchange Bank 42,349 172 0.4% 10.7% 3.6% 47
6 Shinhan Bank * 35,896 282 0.8% 12.3% 2.4% 54
7 Hana Bank 35,823 243 0.7% 15.6% 2.4% 55
8 KorAm Bank 22,050 147 0.7% 15.6% 2.7% 87
9 Korea First Bank ^ 20,015 169 0.8% 14.7% 10.5% 97
10 Seoulbank 16,418 77 0.5% 14.8% 2.4% 112
* Denotes data from 2000 given that the 2001 financials were not available at time of compilation.
^ Korea First Bank: NPL ratio has since been reduced to 5.3% (1Q2002)
Source: Asian Banker Research

Testament to its reform efforts and strong macroeconomic borrowing by the country’s bloated chaebol or conglomer-
performance, banks in South Korea turned in improved ates, South Korean banks deserves high marks for cleaning
performances last year, posting record profits after five up their act.
consecutive years of losses. Altogether, the domestic banks
chalked up a cumulative profit of 5.2 trillion won ($3.9 bil-
lion), a massive turnaround from the losses of 4.2 trillion
won ($3.5 billion) in 2000. Reflecting this improvement
is top consumer lender Kookmin Bank (No.15), created
in November 2001 by a merger between retail specialist
Kookmin Bank and mortgage specialist Housing & Com-
mercial Bank (H&CB). Kookmin saw a net profit growth
of 19.5% to 1.49 trillion won ($1.12 billion), powered by a
resurgent economy and lower interest spurring mortgage
and consumer loans, credit card commissions and profit
from trust operations.
Such significant achievements were possible due to a
change in practices and a conscious effort at moving to-
wards greater shareholder value and transparency. Some
of the key efforts include the implementation of painful
downsizing and restructuring measures that saw 16 un-
profitable banks merged or dissolved altogether and the
re-orientation in the lending strategy of South Korean banks
with greater emphasis on consumer banking. Changes at top
saw the emergence of a younger breed of western-educated Entering an era of sustainable profits?
CEOs like Kim Jung-tae (Kookmin Bank) and Kang Chung- After half a decade of being in the red, 2001 was a commendable
won (Seoul Bank) who are market-oriented and driven by renaissance for South Korean banks. With private consumption
value-maximisation. growth of 4.5% in 2001 and projected to expand by 6.5% in 2002,
banks‚ expansion into consumer lending is well timed.
Reforms a good example for banks elsewhere Meanwhile, given the recovery of corporate profitability
Commercial banks saw their NPLs ratio drop from 12.9% in following restructuring efforts, debt to equity ratios in the
1999, to 3.4% in 2001, to an all-time low of 3.1% as the end of manufacturing sector have fallen to their lowest level since
1Q2002. Some South Korean banks NPLs (as at 1Q2002) have the early 1970s, whilst interest coverage ratios have risen to an
shrunk to globally respectable levels - Shinhan is at 1.8% average to 1.7 times from 1.1 times in 1996. Since South Korean
(No.54 in TAB300), Hana 2.1% (No.55), Seoul 2.2% (No.112), industries are now faring better, corporate lending headaches
and Hanvit (renamed Woori in May 2002) 2.3% (No.28). With are also receding. The profit outlook for South Korean banks
the banking system previously almost crippled by heavy is certainly looking more sustainable.

The Asian Banker Journal Special Edition 37

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Country Capsules
HONG KONG - Tough Times In 2001
Hong Kong
18 banks in TAB300. Total assets: $503.1bn. Total profits: $6.2bn. ROA: 1.2%. ROE: 16.7%
Assets Profits Profitability NPL Top 300
Rank Commercial Bank ($mn) ($mn) ROA (%) ROE (%) Ratio Rank
1 HSBC 223,491 3,365 1.5% 31.6% 4.2% 11
2 Bank of China (HK) 98,276 355 0.4% 5.2% 10.9% 20
3 Hang Seng Bank 60,887 1,297 2.1% 22.4% 2.7% 33
4 Bank of East Asia 23,310 205 0.9% 8.8% 3.1% 81
5 Dao Heng Bank 17,335 230 1.3% 13.3% 2.9% 105
6 Nanyang Commercial Bank 11,236 na na na na 153
7 Shanghai Commercial Bank 9,189 127 1.4% 10.1% 2.1% 168
8 Wing Lung Bank 8,259 108 1.3% 11.4% 3.6% 180
9 CITIC Ka Wah Bank 7,621 79 1.0% 9.6% 4.5% 187
10 Wing Hang Bank 7,061 100 1.4% 12.9% 3.8% 192
Source: Asian Banker Research

As the economy worsened, Hong Kong banks felt the heat from down 60% from the peak, mortgage lending (which accounts
lower margins, higher bad debt provision and weak loan de- for circa 40% of loans) still dipped 1%.
mand. Key amongst these decline was the Bank of China (Hong With the decline in traditional banking businesses, banks
Kong)’s (No.20) 47% drop in net profits to HK$2.8 billion ($355 turned to credit card operations to boost bottomlines. Credit
card accounts soared 16.4% to
average 1.4 cards/capita. But
along with aggressively card is-
suance came credit card charge-
off rates of 9% as surging un-
employment pushed personal
bankruptcy filings from 4,066 to
9,151, up 1.25X.

Consolidation progressing
2001 saw further consolidation
with CITIC Ka Wah’s (No.187)
takeover of Hong Kong Chinese
Bank in 4Q01 hot at the heels of
DBS’s (No.24) acquisition of Dao
Heng in the earlier part of 2001.
With some 150 licensed banks
in the territory’s crowded bank-
ing sector and the small players
competing with giants like HSBC,
BOC and Standard Chartered, we
expect more integration to reap
economies of scale. This will how-
ever be at a slower pace, as ongo-
ing reluctance to relinquish family
million) from restructuring charges for the merger of 12 banks control and low prices will deter shareholders from selling.
under the group, lower interest income and asset revaluation
losses from an adverse market environment. BOC (HK)’s NPLs Growth prospects remain unexciting for 2002
accounted for nearly 11% of the loan book at end-2001 against Although pressure on margins should ease as the central banks
the industry average of 4.09 %. halts rate cuts this year, Hong Kong banks will continue to grap-
Figures by the HKMA (Hong Kong Monetary Authority) ple with flimsy loans growth and a fiercely competitive consumer
showed the banking sector assets contracting 7.6% last year banking market. We expect further pain to come for Hong Kong
with customer loans shrinking 11.2% and deposits 3.6%. Even banks given continued weak asset prices and a rising level of
with their interest rate-cutting spree, with the property market bankruptcies. Growth prospects remain unexciting for 2002.

38 The Asian Banker Journal Special Edition

 THE ASIAN BANKER 300

WINCOR NIXDORF
(CD TO XPRESS PRINT)

The Asian Banker Journal Special Edition 39

THE ASIAN BANKER 300

Country Capsules
INDIA: Banking On A Turnaround
India
30 banks in TAB300. Total assets: $259.7bn. Total profits: $1.9bn. ROA: 0.7%. ROE: 13.5%
Assets Profits Profitability NPL Top 300
Rank Commercial Bank ($mn) ($mn) ROA (%) ROE (%) Ratio Rank
1 State Bank of India ^ 68,903 503 0.7% 15.4% 13.0% 26
2 ICICI 21,536 53 0.2% 3.9% 4.7% 90
3 Canara Bank 14,937 153 1.0% 21.4% 6.2% 125
4 Punjab National Bank ^ 13,136 116 0.9% 17.5% 11.7% 137
5 Bank of Baroda * 13,098 57 0.4% 8.2% 5.1% 138
6 Central Bank of India 10,883 34 0.3% 8.2% 8.0% 155
7 Bank of India 10,446 104 1.0% 10.3% 9.4% 157
8 Union Bank of India 9,179 65 0.7% 14.9% 10.8% 169
9 Indian Overseas Bank 6,846 48 0.7% 16.7% na 195
10 Uco Bank 6,491 34 0.5% 6.0% 9.5% 200
* Denotes data from 2000 (FY3/2001) given that the 2001 financials were not available at time of compilation. NPL ratio for FY3/2002.
^ NPL ratios: FY3/2001 for nos. 1, 4. Source: Moody’s Credit Opinions (March 2002)
Source: Asian Banker Research

2001 marked the turnaround for India’s public sector banks. But sustainability is a moot question
At the close of the FY3/2002 reporting season, 27 state banks With a rising interest rate regime and bond yields slowly
reported a 92% net profit expansion, erasing 2 consecutive creeping up this year, this brings us to question the sus-
years of contraction. In absolute terms, the bottomline was a tainability of revenues from treasury operations. This is
stellar 83.1 billion rupees ($1.7 billion) as against 43.2 billion especially the case for the state banks where trading profits
rupees in 2000/01. Of these, State Bank of India (No.26), the dominated earnings at 30-40% of banks’ pre-provision profits
nation’s largest commercial bank, flaunted a 54% y-o-y growth as against a lower 20% for private sector banks like HDFC
in profits. This accounted for circa 30% of the aggregated in- (No.236). Last year’s significant profit expansion would be
dustry figure. Others were equally impressive with 20 of the a tough act to follow.
27 banks boasting profit gains of at least 50%. Erstwhile weak
banks also posted impressive growth - for instance, Indian
Bank (No.202) which last recorded profits
in 1996, bounced back with a modest 330
million rupees ($7 million). Meanwhile, India - Sterling improvement in
NPLs are reportedly down from 6.7% Public Sector Banks' (PSB) profits
to 5.8%.

Huge windfall from treasury 100%

Closer examination revealed a common
reason for the profit explosion - the hand- 80%
Combined Net Profit growth

some contribution from Treasury opera-

tions from a softer interest rate environ- 60%
ment in the government securities market.
Higher bond trades in Indian banks 40%
boosted trading profits by an average 80-
100%, with revenues from this component 20%
exceeding net profits in some instances.
In contrast, net interest income growth
0%
averaged 11.3% whilst on the deposits and
loans front, expansion was 13.2% and 16.7%
respectively, lower than in 2000/01. Instead -20%
of extending credit to borrowers, Indian
banks have been deploying deposits into -40%
government bond investments, resulting 1997 1998 1999 2000 2001
in the lowest loan-deposit ratio (mid-40%
range) amongst the countries the region. *Note: The financial year ends in March (e.g. 1997: year to 3/1998)
Source: Asian Banker Research

40 The Asian Banker Journal Special Edition

 THE ASIAN BANKER 300

AUSTRALIA: Write-Downs Down Under

Australia and New Zealand
11 Australian and 5 New Zealand banks in TAB300. Total assets of banks in top 300: Aust $577.9bn; N.Z. $66.0bn.
Total profits: Aust $4.8bn; N.Z. $787mn. ROA: Aust 0.8%; N.Z. 1.2%. ROE: Aust 13.3%; N.Z. 21.7%
Assets Profits Profitability NPL Top 300
Rank Commercial Bank ($mn) ($mn) ROA (%) ROE (%) Ratio Rank
1 National Australia Bank 191,555 1,065 0.6% 8.8% 0.8% 13
2 Commonwealth Bank of Australia 117,785 1,226 1.0% 13.0% 0.7% 17
3 Westpac Banking Corp 97,048 973 1.0% 19.6% 1.1% 21
4 Australia & New Zealand Banking Group 94,823 956 1.0% 17.7% 1.3% 22
5 St George Bank 25,971 207 0.8% 11.2% 0.5% 75
6 Westpac Banking Corporation (NZ) 15,805 193 1.2% 16.6% na 117
7 Bank of New Zealand 15,668 182 1.2% 24.6% na 119
8 Suncorp-Metway 15,163 202 1.3% 14.5% 1.1% 124
9 National Bank of NZ ^ 14,922 172 1.2% 19.1% 0.5% 126
10 Macquarie Bank 14,236 124 0.9% 22.1% 0.6% 131
^ NPL ratios: FY99/00 for National Bank of NZ. Source: Moody’s Credit Opinions (March 2002)
Source: Asian Banker Research

2001 fiscal year saw Australia’s major banks, NAB (No.13), CBA and ANZ making a combined underlying net profit of A$5.5
(No.17), Westpac (No.21), ANZ (No.22) and St George (No.75) billion ($3.1 billion), up 11%. Fuelling growth were house
record combined net earnings of A$8.7 billion ($4.4 billion), buyers and consumers taking advantage of low interest rates
a decrease of 11.3% from 2000. which resulted in consumer
The key culprit here was invest- lending portfolios growing 5%
ment writedowns. For instance, compared to a 2.6% decrease
NAB made a A$3.6 billion ex- for the corporate sector. Also
traordinary writedown on its backing profit expansion were
U.S.-based mortgage-servicing tight control of costs translating
unit (HomeSide Lending) and to a further decline in CIRs to
substantial provisions for its 50.9%, and a lift in non-interest
exposure to Ansett’s collapse income from fees or funds
that resulted in bad debt charge management operations. NPLs
soaring 73% to $897 million. have also begun easing - NAB
These caused in a 36% plunge saw the figure dip from 0.8%
in net profit to A$2.1 billion to 0.75% in 1H, well off the last
($1.1 billion). Along the same sector peak of 2.0% recorded
grain, CBA reported bad-debt during the early 1990s and even
rising 24% to A$385 million as their provisioning cover im-
from the failure of major busi- proved to 33.7% of gross NPLs
nesses such as the NSW Grains from 30.6% previously.
Board and Pasminco which
reduced its profits by 11% to No major NPL problems
A$2.4 billion. Australian banks weathered the
Omitting these writedowns, Asia crisis without a significant
the banks actually maintained impact on their asset quality
a steady growth in underlying and maintain below average
earnings from strong net interest and fee income, and con- levels of NPLs compared to global banks. Recent high profile
tinued focus on cost control which saw cost-to-income ratios corporate collapses such as OneTel and Pasminco have rattled
(CIRs) reduced from 58.6% to 53.2%. For instance, discounting some observers, but are unlikely to blow out NPL ratios signifi-
the HomeSide provision, NAB’s earnings would have actually cantly given the ongoing quality of retail loan books.
surged 19% to a record A$4 billion. While the economic downturn will no doubt decelerate
revenue growth, Australian banks’ continued focus on credit
Interims for 2002 point to a more buoyant future control and cost reduction, combined with enhanced product
Moving forth, Australian banks have defied tough global con- offerings such as managed funds products to customers will
ditions to post record 1H2002 profits with CBA, NAB, Westpac minimise the impact.

The Asian Banker Journal Special Edition 41

THE ASIAN BANKER 300

Country Capsules
SINGAPORE: Unimpressive Report Card
Singapore
3 banks in TAB300. Total assets: $189.0bn. Total profits: $1.5bn. ROA: 0.8%. ROE: 9.7%
Assets Profits Profitability NPL Top 300
Rank Commercial Bank ($mn) ($mn) ROA (%) ROE (%) Ratio Rank
1 DBS Group Holding 81,741 540 0.7% 8.9% 5.7% 24
2 United Overseas Bank 61,222 500 0.8% 10.8% 9.3% 32
3 Oversea-Chinese Banking Corporation 46,045 424 0.9% 9.4% 9.7% 38
Source: Asian Banker Research

Singapore’s worst recession since independence muted profit- “consolidation and efficiency mode” this year. It will be interest-
ability for the city-state’s 3 banks (DBS, UOB and OCBC; No.24, ing to see how contributions from newly acquired businesses
32 and 38 in TAB300 respectively) with increased provisioning and tighter cost controls can boost profitability further down
to cover declines in the collateral value of NPLs. In 2001, ag- the line as the economy recovers.
gregate provisions rose three-fold to S$1.06 billion ($0.57 billion)
from S$284 million the previous year, paring total net profit by
14% to S$2.71 billion ($1.46 billion). Of the 3, UOB trumped its
two rivals with a minute 1.3% rise in net profits to S$925 mil-
lion ($500 million) but with the growth due to a three-month
inclusion of Overseas Union Bank (OUB) which it acquired
last year. The other 2 suffered profit fall, with DBS down 28%
and OCBC 7%.
This occurred even as the 3 banks saw net interest income
growth of 11-21% from three key mergers that have taken
place - DBS Bank acquisition of Hong Kong’s Dao Heng; UOB
of OUB; and OCBC of Keppel Tatlee. Bottomlines would have
looked worse if not for the government-driven integration
which shrunk five banking groups into three. On that front,
DBS defended the S$9.4 billion ($5.1 billion) purchase price
of Dao Heng (a whopping 3.2X book value) arguing that it
generates meaningful access to north-east Asia and direct ac-
cess to China. The bank is also targeting $72 million in annual
cost savings, with OCBC aiming for $55 million by 2004 from
the full integration of Keppel Tatlee, and UOB targeting $135 Competition heating up
million by 2003. Singapore banks will also have to deal with aggressive forays
into the market by foreign banks. The central bank brought the
Time to justify recent M&A activity total number of full bank licenses to six with the granting of
Against the background of lacklustre economic expansion, we two additional licenses to HSBC (No.11) and Malayan Banking
do not expect substantial earnings growth this year. Singapore (No.51), allowing them wider access to the retail market. With
banks will need to look for new streams of income like fee- domestic banks digesting integration efforts following the M&A
based and Treasury income or sell non-core assets as organic binge last year and possibly more consolidation in store with
net interest income growth stagnates. Combined NPLs for the the government envisaging two (not three) banks, foreign banks
three banks already hovers at 8.0% of total loans and climbing. will meanwhile make more inroads into Singapore’s consumer
DBS’s new chief executive Jackson Tai sees the bank as being in banking arena.

42 The Asian Banker Journal Special Edition

THE ASIAN BANKER 300

The Asian Banker Journal Special Edition 43

THE ASIAN BANKER 300

Country Capsules
MALAYSIA: 2001 A Watershed Year
Malaysia
17 banks in TAB300. Total assets: $148.5bn. Total profits: $945mn. ROA: 0.6%. ROE: 8.5%
Assets Profits Profitability NPL Top 300
Rank Commercial Bank ($mn) ($mn) ROA (%) ROE (%) Ratio Rank
1 Malayan Banking 37,055 221 0.6% 8.1% 16.2% 51
2 Bumiputra-Commerce Bank 16,628 47 0.3% 4.3% 10.8% 110
3 Public Bank 14,002 52 0.4% 3.1% 6.4% 132
4 RHB Bank Berhad 13,669 91 0.7% 7.5% 13.9% 134
5 Hong Leong Bank 10,400 104 1.0% 13.6% 13.3% 158
6 EON Bank 6,501 53 0.8% 9.7% 8.1% 199
7 Standard Chartered Bank Malaysia 6,222 -20 -0.3% na na 203
8 Southern Bank 6,166 60 1.0% 10.0% 22.6% 204
9 HSBC Bank Malaysia 6,085 104 1.7% 24.1% na 208
10 Citibank 5,965 84 1.4% na na 209
Source: Asian Banker Research

To prepare Malaysian banks for eventual liberalisation, Ma- ing problems, 2002 will fortunately see progress as economic
laysia merged its 54 banking institutions into 10 core groups recovery takes hold. Performance is expected to improve in
ahead of market opening to incumbent foreign banks by 2004 financial year 2002 as better asset quality and thinner loan losses,
and new entrants by 2007. Out of these 10 anchor banks, 2001 improving Cost-to-income ratios (CIRs) and recoveries under-
saw profit deterioration for 8, underscoring high overhead and pin earnings outlook. This optimistic outlook is backed by the
merger-related costs following an industry-wide consolidation recent release of Maybank’s interim results to December 2001
and difficulties faced as bad debts rose and competition inten- where the group turned round with a 7.4% rise in net profit to
sified in the retail segment amidst slowing economic growth. MYR753 million ($198 million) from lower loan loss provisions
Instead of abating following the consolidation, gross NPLs are and rise in non-interest income.
still high at 18% of all loans in late 2001.
Maybank (No.51), the nation’s largest bank and barometer Corporate debt restructuring is key
for health, was similarly hit and saw net profits tumble 38% to The government also appears to be taking aggressive steps to
MYR840 million ($221 million) in fiscal 2001. Net NPLs rose from restructure the country’s huge corporate debt. By end-2001,
7.7% in 2000 to 8.4% (gross: 16.2%) whilst overhead costs rose Danaharta, the state-owned asset management company set
33% after the take over of PhileoAllied and Pacific Bank. up to assist in recapturing loan values after the Asian financial
crisis, had cleared the bulk of its bad loans portfolio of MYR47.7
And now - the gain after the (merger) pain billion on an average recovery rate at 56%. Malaysian banks are
Though many merged entities are still grappling with teeth- beginning to reap the gains of the merger pain.

INDONESIA: Bleeding Slowly Abating

Indonesia
8 banks in TAB300. Total assets: $66.5bn. Total profits: $454mn. ROA: 0.7%. ROE: 12.3%
Assets Profits Profitability NPL Top 300
Rank Commercial Bank ($mn) ($mn) ROA (%) ROE (%) Ratio Rank
1 Bank Mandiri 24,968 261 1.0% 25.5% 9.7% 80
2 Bank Negara Indonesia 11,734 81 0.7% 11.1% 20.0% 144
3 Bank Central Asia 9,824 297 3.0% 31.9% 3.2% 163
4 Bank Rakyat Indonesia 7,253 101 1.4% 22.1% 5.0% 191
5 Bank Danamon 5,002 69 1.4% 17.4% 5.0% 234
6 Bank Internasional Indonesia 2,928 -393 -13.4% na 62.0% 282
7 Bank Tabungan Negara 2,523 12 0.5% 15.0% 5.0% 292
8 Bank Lippo 2,267 26 1.1% 9.7% 9.0% 298
Note: All NPL ratios from Fitch Ratings
Source: Asian Banker Research

44 The Asian Banker Journal Special Edition

 THE ASIAN BANKER 300

With the recapitalisation of Indonesian banks with specially- Buana and Bali apparently boasting a low 3%. But at the other
issued government bonds and the removal and restructuring end of the spectrum lies Bank Negara Indonesia (BNI, No.144)
of NPLs, banks saw their underlying profitability substantially with 20% and Bank Internasional Indonesia (BII, No.282) a
improve over 2001. Combined ROAs for the top 13 banks (ac- whopping 62%. This is despite a IDR11 trillion ($1 billion) bad-
counting for 75% of the total banking assets) doubled to 0.78% loan transfer to the Indonesian Bank Restructuring Agency
even as aggregated asset grew at a faster 6%. Improvement (IBRA) and IDR14.4 trillion recapitalisation in late 2001 to
arose from high levels of net interest and non-interest income cover BII’s related party exposure to the collapse of Asia Pulp
coupled with reasonable cost containment. For instance, an & Paper Group.
increase in central bank paper rates (14.8% to 17.6%) and gross
loan growth of 15% (IDR24 trillion or $2.28 billion) resulted in The worst is over but the outlook is muted
net interest income for the likes of Bank Central Asia (BCA, Restructuring and write-offs were less substantial in 2001 as
No.163) and Bank Rakyat Indonesia (BRI, No.191) soaring 114% against the prior year with much of the NPL improvement due
and 76% respectively. Strongest organic loans growth came to the booking in of new loans. With write-off constrained by
from mid-sized banks like Panin and Niaga which saw SME the banks’ limited capital bases, worry remains that banks
lending rise. will find it increasingly difficult to rid off the remaining NPLs.
And unless we see substantial cuts in NPLs, banks’ appetites
Though loan book situation still tentative to absorb new credit risks will be muted. Indonesian banks
Following IDR14 trillion ($1.3 billion) in write-offs, banks are out of intensive care but the recuperation process is far
ended 2001 with NPLs declining from 17% to 12%, with BCA, from over.

PHILIPPINES: Mixed Bag Of Results

Philippines
7 banks in TAB300. Total assets: $33.7bn. Total profits: $50mn. ROA: 0.1%. ROE: 5.1%
Assets Profits Profitability NPL Top 300
Rank Commercial Bank ($mn) ($mn) ROA (%) ROE (%) Ratio Rank
1 Metropolitan Bank and Trust 9,108 41 0.4% 3.8% 10.8% 170
2 Bank of the Philippine Islands 7,697 102 1.3% 10.9% 14.6% 186
3 Equitable PCI Bank 4,642 3 0.1% 0.3% 22.1% 243
4 Philippine National Bank 3,623 -80 -2.2% na 49.0% 265
5 Development Bank of the Philippines 3,392 33 1.0% 9.9% 13.7% 270
6 Rizal Commercial Banking Corp 2,952 7 0.2% 2.3% 19.3% 281
7 United Coconut Planters Bank * 2,308 -56 -2.4% -25.3% 31.8% 296
* Denotes data from 2000 given that the 2001 financials were not available at time of compilation.
Note: All NPL ratios as at end 1Q2002
Source: Asian Banker Research

Philippine Banks concluded 2001 with varied fortunes. For Banking at cross-roads with a clearer way forward
instance, Metrobank (No.170), Philippines‚ top bank saw a In recent months, the prevailing low-interest-rate regime has
40% surge in net income to P2.1 billion ($41 million) while borne down on the net margins of banks. In spite of the lower
Bank of the Philippine Islands (BPI, No.186), the country’s rates, loans growth remained problematic with Philippine cor-
second largest bank, posted a more impressive 72% rise porates reluctant to make significant new investments given
to P5.3 billion ($102 million) from higher interest (+7%) patchy economic conditions both at home and abroad. Total
and commission income (+23%) buoyed by higher trading loans in 1Q2002 dropped 1% during the period to P1.378 trillion
gains. In contrast, No.3 Equitable PCI (No.243 in TAB300) ($26.7 billion) from P1.392 trillion in the comparative period a
suffered a 78% deceleration in earnings to P140 million year ago. Hopefully with the local currency stable, inflation
and a 14% decline in interest income. Credit however, has at modest levels and interest rates at historical lows to spur
to be given for its successful deposit recovery program consumption, prospects will turn more promising. With the
which enabled it to fully pay off the P30 billion emergency government providing the environment for banks to address
loan from the Bangko Sentral ng Pilipinas (Central Bank their problematic loans, profitability and sustainable growth
of Philippines). will become more achievable.

The Asian Banker Journal Special Edition 45

THE ASIAN BANKER 300

Country Capsules
THAILAND: Show Of Profit From Reduced Provisions
Thailand
11 banks in TAB300. Total assets: $124.1bn. Total profits: $817mn. ROA: 0.6%. ROE: 13.7%
Assets Profits Profitability NPL Top 300
Rank Commercial Bank ($mn) ($mn) ROA (%) ROE (%) Ratio Rank
1 Bangkok Bank ^ 28,257 147 0.5% 15.0% 15.3% 69
2 Krung Thai Bank ^ 22,102 -100 -0.5% -7.0% 8.1% 85
3 Thai Farmers Bank ^ 17,528 23 0.1% 3.7% 12.9% 103
4 Siam Commercial Bank ^ 16,362 9 0.1% 0.6% 18.8% 113
5 Bank of Ayudhya ^ 9,051 -60 -0.7% na 15.7% 171
6 Thai Military Bank ^ 8,352 17 0.2% 5.4% 12.1% 178
7 Siam City Bank 6,763 840 12.4% 210.3% na 197
8 Bankthai 6,151 24 0.4% 9.3% 3.2% 206
9 Bangkok Metropolitan Bank 3,659 1 0.0% na na 264
10 Bank of Asia ^ 3,598 -86 -2.4% -44.1% 18.6% 266
^ NPL ratio as at end 1Q2002
Source: Asian Banker Research

Performance results of Thailand’s commercial banks improved (TAMC) or other asset management vehicles. SCIB for instance,
significantly last year as the combined earnings of the 11 banks disposed bad loans to its own asset management company
in TAB300 surged 9X from net losses of Bt4.6 billion ($104 mil- and saw NPLs down 97% within a month to Bt146.3 million in
lion) in 2000 to net profits of Bt36.1 billion ($817.5 million). Siam December. Total NPLs in the financial system was Bt458.5 bil-
City Bank (SCIB, No.197) topped its peers, reporting a hefty net lion ($10.4 billion or a ratio of 10.5%) at year-end, a contraction
profit of Bt37.11 billion ($840 million) for 2001, compared to a loss of Bt34 billion from Bt492 billion in 2000.
of Bt7.27 billion in 2000 (albeit principally due to one-off items)
whilst Bangkok Bank (No.69), Thailand’s largest commercial But abating reforms slowing growth
bank, was also amongst the best performers with a net profit ofAs evident by the continued aggregated net profits surge
Bt6.48 billion ($147 million), erasing prior years’ losses. of 426% to Bt9.8 billion ($222 million) in 1Q2002, earnings
outlook continues to improve this year.
Unfortunately, Thailand has somewhat lost
Several Thai banks witness profit improvement in 2001 the momentum for financial reforms it had
started during the 1997-98 crisis. The com-
40,000 mercial banks are sitting on some Bt500-600
Bangkok Metropolitan Bank

2000
35,000 billion ($11.3-13.6 billion) in excess funds, yet
2001
30,000 remain averse to lending in an environment
where borrowers are already mired in debt
Thai Military Bank

25,000
Bank of Ayudhya

Thai Danu Bank

or declaring bankruptcy. Even the govern-

Siam City Bank
Bangkok Bank
Net profit (Million Baht)

20,000
ment prodding to help jump-start economic
Bank of Asia

15,000 growth has yielded little results - growth

Bankthai

10,000 projected by IMF is just 2.7% this year (the

5,000 slowest among the emerging economies
0 of Asia).
-5,000
TAMC only part of the solution
-10,000
To remain attractive to its key source
-15,000 of growth, the foreign investors, more
-20,000 structural reforms and transparency are
-25,000 required. For instance, the TAMC should not
-30,000 be a panacea to the NPL problem or become
a vehicle to “warehouse” the remaining
Source: Asian Banker Research NPLs forever. The inherent problems which
make NPLs thrive remain - Thailand’s weak
Most profit increments were attributed to significant reduc- foreclosure and bankruptcy laws, limited security/collateral
tion of loan-loss provisioning reserves from the disposal of laws and weak corporate governance standards. These have
NPLs to the state-owned Thai Asset Management Corporation to be addressed.

46 The Asian Banker Journal Special Edition

 THE ASIAN BANKER 300

AUSTRALIA: Write-Downs Down Under

Australia and New Zealand
11 Australian and 5 New Zealand banks in TAB300. Total assets of banks in top 300: Aust $577.9bn; N.Z. $66.0bn.
Total profits: Aust $4.8bn; N.Z. $787mn. ROA: Aust 0.8%; N.Z. 1.2%. ROE: Aust 13.3%; N.Z. 21.7%
Assets Profits Profitability NPL Top 300
Rank Commercial Bank ($mn) ($mn) ROA (%) ROE (%) Ratio Rank
1 National Australia Bank 191,555 1,065 0.6% 8.8% 0.8% 13
2 Commonwealth Bank of Australia 117,785 1,226 1.0% 13.0% 0.7% 17
3 Westpac Banking Corp 97,048 973 1.0% 19.6% 1.1% 21
4 Australia & New Zealand Banking Group 94,823 956 1.0% 17.7% 1.3% 22
5 St George Bank 25,971 207 0.8% 11.2% 0.5% 75
6 Westpac Banking Corporation (NZ) 15,805 193 1.2% 16.6% na 117
7 Bank of New Zealand 15,668 182 1.2% 24.6% na 119
8 Suncorp-Metway 15,163 202 1.3% 14.5% 1.1% 124
9 National Bank of NZ ^ 14,922 172 1.2% 19.1% 0.5% 126
10 Macquarie Bank 14,236 124 0.9% 22.1% 0.6% 131
^ NPL ratios: FY99/00 for National Bank of NZ. Source: Moody’s Credit Opinions (March 2002)
Source: Asian Banker Research

2001 fiscal year saw Australia’s major banks, NAB (No.13), CBA and ANZ making a combined underlying net profit of A$5.5
(No.17), Westpac (No.21), ANZ (No.22) and St George (No.75) billion ($3.1 billion), up 11%. Fuelling growth were house
record combined net earnings of A$8.7 billion ($4.4 billion), buyers and consumers taking advantage of low interest rates
a decrease of 11.3% from 2000. which resulted in consumer
The key culprit here was invest- lending portfolios growing 5%
ment writedowns. For instance, compared to a 2.6% decrease
NAB made a A$3.6 billion ex- for the corporate sector. Also
traordinary writedown on its backing profit expansion were
U.S.-based mortgage-servicing tight control of costs translating
unit (HomeSide Lending) and to a further decline in CIRs to
substantial provisions for its 50.9%, and a lift in non-interest
exposure to Ansett’s collapse income from fees or funds
that resulted in bad debt charge management operations. NPLs
soaring 73% to $897 million. have also begun easing - NAB
These caused in a 36% plunge saw the figure dip from 0.8%
in net profit to A$2.1 billion to 0.75% in 1H, well off the last
($1.1 billion). Along the same sector peak of 2.0% recorded
grain, CBA reported bad-debt during the early 1990s and even
rising 24% to A$385 million as their provisioning cover im-
from the failure of major busi- proved to 33.7% of gross NPLs
nesses such as the NSW Grains from 30.6% previously.
Board and Pasminco which
reduced its profits by 11% to No major NPL problems
A$2.4 billion. Australian banks weathered the
Omitting these writedowns, Asia crisis without a significant
the banks actually maintained impact on their asset quality
a steady growth in underlying and maintain below average
earnings from strong net interest and fee income, and con- levels of NPLs compared to global banks. Recent high profile
tinued focus on cost control which saw cost-to-income ratios corporate collapses such as OneTel and Pasminco have rattled
(CIRs) reduced from 58.6% to 53.2%. For instance, discounting some observers, but are unlikely to blow out NPL ratios signifi-
the HomeSide provision, NAB’s earnings would have actually cantly given the ongoing quality of retail loan books.
surged 19% to a record A$4 billion. While the economic downturn will no doubt decelerate
revenue growth, Australian banks’ continued focus on credit
Interims for 2002 point to a more buoyant future control and cost reduction, combined with enhanced product
Moving forth, Australian banks have defied tough global con- offerings such as managed funds products to customers will
ditions to post record 1H2002 profits with CBA, NAB, Westpac minimise the impact.

The Asian Banker Journal Special Edition 41

64 The Asian Banker Journal
 OPERATIONS & TECHNOLOGY

Survey: Implementing CRM

strategies progressing more
slowly than expected
The initial findings of a forthcoming regional survey by Asian Banker Research reveals
that the IT architecture of many Asian banks is still failing to provide an adequate
platform for effective, multi-channel Customer Relationship Management (CRM)

relationship management. Banks’ IT ar-

chitecture is not able to provide a unified
coherent real time customer view across
different channels. IT platforms must
improve for banks before banks can of-
fer customers a genuine enterprise-wide
CRM capability.
As in any other service-related in-
dustry today, we are seeing a distinct
evolution in the banking sector towards
customer-centricity driven by increasing
competitive pressure and diminishing
margins. CRM is at the core of this propo-
sition - the ability to identify customer
segments, determine their worth and
customize around their needs.
Unfortunately, for Asian banks, the
drive to achieve an enterprise-wide CRM
capability has been fraught with unfore-
seen challenges. The survey findings
identified the biggest obstacles for banks
in the region to a successful implementa-
tion of CRM technology.

Challenges in implementing
CRM technology...
• The central challenge that many banks
face is in updating existing IT architec-
ture, with limited or no consolidation
Asian Banker Research has developed future technological trends as seen of their customer information files
a comprehensive research report – IT through the eyes of CEOs, CIOs and (CIFs) on the core systems level.
Infrastructure Profile, Benchmarks senior managers of 50 banks who shape
and Trends of Financial Institutions in the strategic decisions vis-à-vis future IT • Once suitable architecture is in place
Asia Pacific – profiling the technologi- infrastructure needs of financial institu- the (often patchy) quality of the data
cal landscape, IT spending, investment tions in the region. held by banks on individual custom-
justification processes and key strategic The survey reveals that many Asian ers can be improved through checking
challenges for the banking sector in the banks have yet to build adequate IT plat- and cross-referencing across the differ-
region. It also identifies the perceived forms to support multi-product customer ent channels.

The Asian Banker Journal 65

66 The Asian Banker Journal
 OPERATIONS & TECHNOLOGY

No consensus on the nature of the biggest challenge

Source: Asian Banker Research “Most banks still

view CRM as being an
• The banks most likely to succeed are to begin extracting information, under-
implementing a defined organizational stand the quality of data and do round
excessive want rather
structure to support the CRM initia- after round of cleansing. It was a painful
tive. Centralised senior management exercise on its own, but BPI avoided the than an operational
supervision of CRM solutions can pitfall that many banks fall into thinking
minimize the conflicts between dif- that they can go it alone own without necessity. Coupled by
ferent partiesin the process which are external help, and usually ending up
bound to arise. spending years trapped building their its relatively high cost
enterprise data warehouse and model.
• Regardless of the level of sophistication
of the implemented CRM solution, the
In BPI’s case, they engaged IBM, learning
and understanding the processes before
of implementation
training and convincing of employees to beginning to analyse their applications.
utilize the technology for their benefit is In addition to the initial challenges,
and long term
central to fully realize its potential. they were also faced with debates on
how the business side should organise realization of returns,
• Banks often fail to appreciate the com- themselves. There were the channel
plexities and effort involved in pushing managers - who were transaction, vol- it is often left on the
through a CRM initiative. The process ume and sales-oriented, and then there
involves endless rounds of data migra- were the marketing managers - who held ‘nice-to-have’ shelf in
tion, cleansing and testing. the clients and were more relationship-
oriented. Throw in a CRM solution that many banks.“
• In these times of global economic straddle the two parties, the conflicts
uncertainties and depressed capital inevitably arose. Thus to resolve such dis-
expenditures, most banks still view putes, BPI appointed a project manager
CRM as being an excessive want to oversee the entire process.
rather than an operational necessity. The concept of being able to integrate
Coupled by its relatively high cost of CRM technology is very appealing,
implementation and long term realiza- unfortunately many banks are falling
tion of returns, it is often left on the short of achieving unified enterprise-
‘nice-to-have’ shelf in many banks. wide implementation. Getting the fun-
damental infrastructure in place, whilst
There is evidence that some banks are important, is just the first step. Banks
starting to tackle the problem in a respon- have to realise that CRM is a collective
sive way. When The Bank of Philippine effort, involving not just a piece of fan-
Islands (BPI) first embarked on their tastic solution package, but the cultural
CRM project, it took them some six to and corroborative effort of the business
nine months to unify data from seven units and distribution channels. This is
different sources before they were able where things get difficult.

The Asian Banker Journal 67

INTERVIEW

Hua Nan: Little

incentive to pick up
small banks
As the pace of consolidation speeds up in Taiwan, Hsu Teh-Nan, president and CEO
of Hua Nan Financial Holding Company (Hua Nan), discussed how it is positioned
for the future under its new structure, NPLs, and the ongoing challenges of balancing
political and commercial necessities.

“Banking used to be a comfortable kind with overseas financial institutions and other legislative reforms, Hsu acknowl-
line of business for a man to be in back through acquisitions. edged that consolidation got off to a
in the early days”, reminisced Hsu Teh- Given his strong domestic customer slow start in Taiwan, but sees the proc-
Nan, president and CEO of Hua Nan. base, Hsu is not particularly interested ess moving forward as inevitable. “The
Hsu is a career veteran, who rose in the in acquisitions of smaller Taiwanese financial holding companies will have
ranks from state-owned banks, private banks. Instead he feels that the bank no choice but to consolidate. The market
domestic banks and the Ministry of should devote its energies and resources will force the people to change because
Finance (MoF). For banks like Hua Nan, to broadening its lines of business by there will be no place for them if they
whose clientele mirrors the competitive considering acquisitions in the insurance do not.” Smaller banks, keen on holding
make-up of Taiwan, having collateral in and securities market. Hua Nan is also out for better valuations, “will also have
real estate and other tangible assets were taking steps to improve its CRM capabili- little choice but to sell off because their
entrenched practices. ties, enhancing its abilities to innovate space in the market will slip once the
“With our small landmass and the and cross-sell new products. full legal and regulatory infrastructure
cultural psyche of the Taiwanese towards Hsu’s vision is also apparent in Hua come in place.”
owning land, collateral in real estate Nan’s pragmatic and proactive approach Hua Nan has become one of MoF’s few
was a valid way to mitigate risk”. Now, to resolving its NPL problems. The bank potential showcases for reform. It was
it has become clearer that the practice is says that it has learnt from early mistakes one of the earliest to take the cue, and to
vulnerable to market risk as the economic and, working with other banks, has de- be approved, to form a financial holding
landscape changes. veloped a potent in-house capability to company, following a share swap with
Hua Nan is the second largest listed clear the remaining bad loans at improv- EnTrust Securities. From Hsu’s perspec-
domestic bank in Taiwan with total as- ing residual values and guard against tive, the success and failure of a financial
sets of $36 billion. The Taiwanese bank- the NPL problem rearing its ugly head holding company depends on whether
ing market remains ripe for consolida- in the future. cross-management of the subsidiary
tion as, at the time of writing, there were Hsu sees one of the bank’s core companies is centred, like Hua Nan,
no less than 53 domestic banks and over strengths as its customer base - ebul- around a strong bank. “That is why both
400 credit unions and co-operatives. Un- liently referred to as a “gold mine” Fubon and Cathay Financial Holding
der Hsu’s leadership, the bank has been – many of whom are the small and me- Companies, have been on the look-out
transforming itself rapidly, grasping the dium enterprises (SMEs) that formed the for bank targets.” Both Fubon and Cathay
need for reform with an urgency that has backbone of Taiwan’s economy. The bank are two of the larger domestic insurance
eluded some of its competitors in Taiwan. harbours ambitions of diversifying into centred financial groups in Taiwan.
Hua Nan was one of the first banks to re- retail banking, not contented with being “They need to strengthen their exist-
structure itself under a financial holding merely a leader in trade financing, and ing banks to become serious financial
company. The bank has a clear strategy commercial deposits and loans. Change services players. Even after integrating,
for how Hua Nan will participate in the is also being stimulated by the MoF, who cross-selling and scaling up will still be
overdue consolidation of the Taiwanese clearly understands the need to shape up tough if their business culture and com-
financial services industry. Hua Nan the banking industry – fast – in the face petence remain insurance or securities
has developed a blueprint to build up its of competition from across the straits in driven,” he explained.
financial services capabilities to become mainland China. “That is why Hua Nan is not inter-
a super-market style, one-stop shop for Despite the Financial Holding Com- ested in acquiring another bank. We
customers through alliance partnerships pany Law, enacted in late 2001, and have already a big, outstanding bank

68 The Asian Banker Journal

Hsu Teh-Nan, President and CEO, Hua Nan Financial Holding Company
The Asian Banker Journal 69
INTERVIEW

to work on – there is little incentive for

us to pick a smaller bank and really not
“We are building our Nan’s credit quality remains good as
reflected by its A3 long-term senior debt
worth the trouble of integrating two rating from Moody’s. Hua Nan would be
culturally different banks in that sense. CRM capability, which likely to receive a subordinated debt rat-
What we need is an insurance or securi- ing at least as good as ChinaTrust’s Baa1
ties target,” Hsu said rather candidly. will be ready within long-term bank deposit and senior debt
Last year Hua Nan Bank contributed ratings and a notch above Chinatrust’s
to some 90 percent of the holding com- two years.“ Baa2 subordinated debt rating.
pany’s consolidated revenue. Of course, the NPL problem is not
Hsu now faces new challenges cross- unique to Hua Nan, neither was it the
managing the bank and other subsidi- only bank in Taiwan to write off such a
aries under the holding structure and branches. We want to move aggressively huge amount to confront its bad debts
allocating group resources to build up into consumer credit card business and issue. By March of 2002, the average
a portfolio of consumer financing serv- we want to grow our current credit card ratio of NPL in Taiwanese banks was 8.04
ices. Incorporating a strong insurance circulation of 409,000 by 24 percent, and percent. Market speculation has been rife
company under its ambit would allow then 30 percent and another 50 percent that the NPL ratios were really higher
the bank to expand and diversify more to reach a million within a year.” than indicated by the Central Bank of
effectively into the franchise and into Hsu acknowledged the need to pro- China due to the definition of overdue
fee-based income - a particularly attrac- vide proper back-end support for these loans in Taiwan being twice the 90 days
tive avenue given that interest rate mar- ambitious plans. “We are building our required by international standards.
gins in loans and deposits are shrinking. CRM capability, which will be ready Behind the scenes, dealing with the
Hsu hinted, but could not reveal in within two years, and we plan to have NPL problem had been “very trying”
full, that they are in the final phase of a call centre at some point in time. We for management. Together with earlier
discussions with a well-regarded Euro- have been working jointly with IBM write-offs, the total write-offs amounted
pean financial institution on a possible consultants to decide what kind of in- to 76 percent of Hua Nan’s total NPLs.
bancassurance alliance to beef up Hua formation would we need for a CRM Such a massive figure will drag its tier
Nan’s consumer banking capabilities. In system, and in integrating our database.” one ratio down to 5.9 percent in 2002 from
order to test the readiness of the bank In addition, we were told that the bank’s 9.9 percent in 2001, even though it will be
for multi-channel delivery, forty-eight B-to-B, supplier management system able to take advantage of tax savings. Hsu
branches have already been selected to which was embarked upon three years has had a particularly strong incentive to
pioneer cross selling. ago, will be linked to other banks and tackle the NPL problem as many of Hua
Hsu said that Hua Nan is starting to integrated with the national informa- Nan’s NPLs come from its core client base
leverage its core strengths more effec- tion infrastructure. Possibly because of of SMEs. It was very important therefore
tively, including its existing customer their experiences in the designing of the to clear the decks. The exercise was
base, the deep spread of its collections system, Hsu has since been asked by the clearly a learning process and the bank
franchise from its commercial accounts Ministry of Economic Affairs to chair a has done well to pull through success-
clearance business and and its long- similar project comprising a consortium fully after some early wrong turns. Hsu
established trade financing business. of nine other banks to design the same became quite animated on the subject.
Hsu also wants to diversify away from system for completion by June 2003. “Why had it been tough?” Hsu asked
these established franchises into con- Questions remain as to how these rhetorically. “The reason why NPLs accu-
sumer banking and challenge the major initiatives will be funded, considering mulated and why Taiwanese banks took
credit players already saturated in the that Hua Nan has a problem with NPLs so long to write off the debts was the lack
market. Foreign players like Citibank, and had recently announced its intention of infrastructure available. Without a
which has an estimated 1.5 million to write off NT$52.4 billion. The write of proper entity, auctioning off the NPLs re-
cardholders in the premium spending will send ROE deep into negative terri- quired us to go through the government,
tier, have found fierce competition from tory (estimated at - 41.3 percent) despite which took a long time. So, at that time,
Chinatrust Commercial Bank, which a net profit of NT$113 million. “That is we engaged a team from Lehman Broth-
leads the pack with more than 4 million why we will be writing-off such a large ers to auction off NT$10 billion worth of
cards in circulation. amount, rather than amortising it,” Hsu NPLs. The task took about a year so we
Hsu is not intimidated by the competi- explained. Without the baggage of wres- did not get very good returns from the
tion: “Remember, Chinatrust managed to tling with non-performing loans over too sale, despite the fact that a good majority
transform itself within 5 years. We can long a period, and with provisions nor- of our loans have very strong collaterals.
do the same as well. We will bring in malising, Hua Nan can concentrate on Lehman Brothers told us that because of
expertise to establish a sales culture - we working its ROE to a targeted average of the time cost involved, it was not possible
already have a training centre to work on 18 percent in the subsequent years. Hua to redeem the NPLs at better returns.
that, we have put in place performance Nan will seek to recapitalise and improve We need to account for that loss to our
target setting, evaluation and compensa- its capital adequacy ratio to above 8 per- shareholders. And moreover, we had to
tion systems. We are not ruling out bring- cent through sub-debts issues. pay 20 percent in commission.”
ing external consultants to strengthen These should find a reasonable appe- “So we formed our own team of expe-
our system and, perhaps, reforming our tite from bond investors given that Hua rienced professionals. We did numerous

70 The Asian Banker Journal

The Asian Banker Journal 71
INTERVIEW

”We were able through the FASC tive advantage because Bank of Taiwan,
despite being the largest bank in Taiwan
given its asset size, is still operating
to redeem a better value of between with all the appendages of a state bank.
As Hua Nan’s largest shareholder (his-
60 percent and 100 percent from the torically a mechanism of the then ruling
party, Kuomingtan to control the private
collaterised loans for our shareholders.” banks) this does not present a conflict of
interest for Bank of Taiwan. Rather, there
remains a spirit of co-operation demon-
strated by cross support in underwriting
syndicate loans.
analyses and scenario studies.” This cessfully. A more performance-driven However, the bank’s remaining ties
included studying the practices of other compensation structure has replaced the to government does mean that politi-
banks such as the widely viewed success old seniority-based model. cal issues will remain a thorn in Hsu’s
of Korea’s Kookmin Bank in getting rid Risk management short-comings are side. In the larger Taiwanese banking
of NPLs in post-crisis Asia. But it was also being addressed. “The biggest chal- institutions, a close circle of friendship
likewise recognised that the market lenge in putting in place a risk manage- and collegiate networking still remains
conditions in Korea might be different ment system is to know the source and among the policy makers, board mem-
from Hua Nan’s experiences in Taiwan level of risk and to be able to deal with bers and senior career executives like
as well as the lack of subsidies from it immediately.” Hsu attributed the im- Hsu. In a scenario where politically
the Taiwanese government to address petus to work on the system to Dresdner driven directives risk interfering with
the NPL issues. “There were many op- Bank, from whom they adopted a list decision-making and pose a risk to the
tions for us: outright sales to a foreign of to suit their own operating environ- bank, executives like Hsu need to pro-
AMC, or to domestic AMCs, or dealing ment. In all likelihood, Dresdner (and tect the interest of the banks. Sensible
with it in-house. By which time, the its parent Allianz) could be just the terms will need to be struck to reflect
Legislative Yuan had approved banks sort of European partners that Hsu has the risk of such ventures, possibly, in
to form our own AMC equivalents. So hinted at. some cases, by persuading the govern-
we submitted the scenario analyses to “The whole system will be computer- ment to help to underwrite that risk.
the Chairman for consideration.” The ised and enable risk to be measured and The bureaucrats must be taught to rec-
board reached a unanimous consensus handled at real-time.” The management ognise that it is a commercial decision
to write off the NPL in one sweeping act had formed a team of experts to study whether the bank should accept such a
rather than to amortize it over a stretch credit risk, not just in the bank to meet risk. Recently for instance, Hua Nan was
of time periods. the Basel II requirements by 2006 and asked to take over five credit unions and
“So by then, after gaining approval, prevent NPLs from rising above the na- cooperatives, laden with overdue debts,
some of us banks came together to tional 2.5 percent target, but to institute but was able to restructure and salvage
form our own Financial Auction Serv- independent risk management units in the debt situation.
ices Company (FASC).” Hsu continued, all the subsidiaries of the holding com- Going forward, one of Hsu’s greatest
“Without the pressure of time cost, we pany. Three experts from Chinatrust challenges will be the need to balance
were able, through the FASC, to redeem Commercial were recruited to roll out the implementation of contemporary
a better value of between 60 percent and the complete risk control and capital business practices with an ability to
100 percent from the collaterised loans management system. “We are in the negotiate with political policy makers,
for our shareholders.” Hsu added: “Cer- process of installing the funds transfer and well-connected family patrons.
tainly, the FASC clearly turned out to be pricing system and the cost of funds will Executives like Hsu, with experience
a better alternative.” Compared to past be rationalised.” of the old ways and the new have the
attempts at simply reclassifying restruc- Rationalising the strategic and man- unique skills required to succeed in this
tured loans, the use of FASC might also agement processes has helped Hsu to tricky process.
offer greater transparency in improving push the pace of change at Hua Nan. During the interview, Hsu professed
Hua Nan’s asset quality. Hsu has been able to achieve this partly to be conservative, given his back-
The experience with NPLs convinced because Hua Nan is now less vulner- ground in credit auditing, which was
management of the need for fresh talent. able to political interference and policy apparent to us, despite what he char-
Staff, “qualified by postgraduate degrees influences. The government has been acterised as an aggressive demeanour.
or pedigreed exposures and experiences reducing its controlling stake in Hua Nonetheless, underlying the cultivated
in international financial services and Nan, via its state-owned Bank of Taiwan, conservatism of a man groomed as a
consultancies like KPMG and Andersen”, to less than 34 percent since 1997, and career bureaucrat in the state-owned
will be involved in building the group’s is expected to continue to down it to 20 banks, is an astute, politically savvy
strategy and policies. Having overcome percent in over five years. This means and well-connected businessman who
union objections, an early retirement that the days where government has a is now professionally engaged in and
programme for more than 350 senior hand in the bank’s budgeting process is committed to the running of a modern
employees has been implemented suc- over. This has given Hua Nan a competi- financial institution.

72 The Asian Banker Journal

 PEOPLE

Andrew Long works towards a

central processing culture at HSBC
Andrew Long, head of HSBC opera- rently has a staff of 1,200. Work on
tions and processing in Asia Pacific is the recently established processing
building HSBC’s in-house centralised centres in Shanghai and Bangalore was
processing capability to pave way started in late 2000.
towards “central processing culture” The bank said that in the next five
within the organisation. yea rs it would be i ncreasi ng t he
Last month, global banking giant number of staff in these GSCs as more
HSBC rolled out its third Global Service workload is expected to flow into
Centre (GSC) in Shanghai. In addition these centres due to greater process-
to the service centres in Guangzhou, ing centralisation.
and in Hyderabad and Bangalore in Currently, these centres carry out
India, HSBC also recently announced basic banking transaction processing
plans to open a sixth GSC in Malaysia such as cross-border payments, funds
in 2003. transfer and check clearing. In the
According to the bank, its strategy is future, the bank plans to undertake
centred on keeping the ownership of a higher level of processing activities
core banking transaction processing. in addition to simple data entry work
Andrew Long, HSBC, head of operations and It has set up fully owned non-bank such as executive reporting from cen-
processing, Asia Pacific
companies - run by HSBC management, tralised locations.
system and staff resources - to carry out For non-core activities, HSBC is look-
centralised processing. ing at outsourcing possibilities for a
In order to maintain high efficiencies range of projects and processes on a
in the centralised processing arrange- case-by-case and country-by-country
ment, these companies and business basis. The decision to outsource these
units incorporated performance bench- activities is based on considerations of
marks in their service level agreements. reputational risk, economic and contin-
”It’s all paperless, HSBC said these performance indica-
tors were better than the indicators
gency perspectives.
Currently, centres in India mostly
released when the same processing process operations coming out of the
it’s all image-based, activities were carried separately in UK, while Guangzhao is focused on
individual countries. Shanghai’s processing requirements.
with remote access ”The bank plans to build a total of However, the bank said it will build com-
five or six GSCs to carry out centralised mon processes and common platforms
to the systems. And processing and act as contingency sites across different centres.
for each other,” says Andrew Long, head Long says that these centres will be
it allows us to bring of HSBC operations and processing in increasing their share of work coming
Asia Pacific. out of different locations. Such steps will
the economies of scale Long adds, “These initiatives will pave also enable the sites to act as mutual back-
the way for the development of a central ups so that if there would be problems
processing culture that will be differ- with one site, work could be channelled
by bringing processes ent from the current country-specific to the other.
processing culture.” ”It’s all paperless, it’s all image-
together from different Currently, there are two centres based, wit h remote access to t he
working in Guangzhou and Hyderabad systems. And it allows us to bring the
entities and from in addition to separate IT applications economies of scale by bringing proc-
development centres in Guangzhou and esses together from different entities
different countries. Pune, India. and from different countries. We can
HSBC started working on a cen- also achieve significant economies
tralised processing centre back in in terms of the wage differentials
late 1998 when it decided to establish between high cost countries from
its first central processing centre in which we’re taking work out to low
Guangzhao. This centre was later cost countries where we’re putting the
transferred to Hyderabad, which cur- work,” Long explains.

The Asian Banker Journal 73

PARTNERS

Visa’s new CIO driving more powers

down to regional centres
This will involve empowering the distributed systems architecture.
individual countries to modify the ap- Explaining his role in the new posi-
plications to reflect these changes. tion, Singh said, “it is my job to ensure
“Over the years, Visa operated a closed the seamless continuity of products and
loop Visanet system. What we are now services.”
implementing is a distributed process- For the local processing centres, Visa
ing environment, which will be tightly will use Unix machines and TCP/IP net-
integrated with our existing Visanet working with updated solutions.
system. The aim is to give the regions Talking about the possibility of Visa
more flexibility in offering customised outsourcing its transaction processing
local products”, Singh explained. operation Singh said, “we are looking at
“We are harnessing the scale and ef- opportunities for outsourcing where it
ficiency of Visanet to drive more process- makes sense.”
ing down to the regional level,” he added. “Outsourcing brings value in terms of
“This approach will improve our ability customer service and software develop-
to rapidly customise solutions.” ment, but we have to see what will give
Singh joined Visa in November 2001 best value to our members.”
Inder P. Singh, CIO, Visa International and was elevated to the newly created Before joining Visa, Singh worked
position of CIO in June this year. from 1978 to 1999 at SeaFirst Bank and
He will be responsible for coordinat- later at Bank of America. There he de-
ing IT processes and standards in four veloped BOA’s overall delivery strategy
Inder P. Singh who was appointed to the strategic directions: to ensure global for expansion in Asia and established
newly created position of CIO at Visa interoperability of all Visa technology, the global retail business/technology
International has been working on the dis- maintain global service standards for and payment strategies for the bank. He
tributed processing environment strategy. transaction processing and data man- also founded and headed Exlservices.
A game plan to delegate six regional office agement, and deliver system integrity com, a company that offered outsourc-
more powers to customise their solutions and guide ongoing strategic initiatives ing services for customer care and
according to the local needs. including the deployment of Visa’s new backroom operations.

PARTNER NEWS ($2.6 million) agreement with CL Com-

puters, Opensys and Interdeals Auto-
banking system. The bank said it has
selected Datacraft to roll out the network
mation for the supply and installation connecting 1,500 branches, while Tata
News from partner organi- of new high-capacity cash and cheque Consultancy Services will implement the
deposit self-service terminals (SSTs) at core banking solution.
sations serving the financial its e-Kawanku centres. Maybank said
the enhanced protection features detect HSBC has signed a three-year, $2 million
services community agreement with SAS Institute to provide
forged notes.
HSBC’s Hong Kong operations with
IBM will acquire PwC Consulting System Access has recently launched strategic decision-support applications
in a $3.5 billion deal, which IBM netSYMBOLS v8, the latest release of for customer and business intelligence,
said would potentially expand its its flagship product. System Access said management information reporting and
computer-services operation. IBM’s that netSYMBOLS v8 is designed to advanced analytics.
computer-services operation, already incorporate cross-segment banking func-
the world’s largest, made up 41 percent tionalities around a customer centric de- UNION BANK OF INDIA (UBI) has
of the company’s total revenue last sign. System Access are re-branding the implemented CashTech Solutions India’s
year. In 2000, Hewlett Packard negoti- netSYMBOLS product as “SYMBOLS.” cash management product, CashIn, to
ated for PwC Consulting in a reported launch the bank’s collection product
$18 billion bid, but talks broke down STATE BANK OF INDIA has drawn UnionSpeed, and its payment product
when the companies were unable to up an IT strategy for the next five years UnionPrompt. CashTech says CashIn
agree on certain areas. with plans to integrate online, real-time will allow UBI’s corporate clients to ef-
transactions processing, multiple deliv- ficiently manage their cash flows through
MALAYAN BANKING BHD (MAY- ery channels, automated treasury and speedy and efficient collections from all
BANK) has signed a 10 million ringgit risk management systems into the core over the country.

74 The Asian Banker Journal

 BENCHMARK

Cash is king for Chinese citizens

There are increasing signs that China’s volatile stock and Residents anticipate flat price levels in the coming three
bond markets have burned private investors once too often. months, with 71.7% of the surveyed saying prices would
Chinese urban residents now prefer to leave their cash on remain unchanged. But under the current price level and
deposit rather than invest in stock and bond markets, ac- interest rate, 33.4% were willing to increase consumption.
cording to a survey conducted on 20,000 urban depositors For instance, expectations for car purchases were higher
in 50 cities by the People’s Bank of China in mid-May this with 8% of respondents anticipating a new car in the coming
year. Results of the survey also show that the residents three months. Among the surveyed, 12.9% used personal
had lower anticipation for income growth, expectation for consumer loans for such big-ticket items, four percentage
low inflation, and wider acceptance of car purchase on points higher than two years before and 1.3 points higher
consumer credit. than in 2001.
According to the survey, 65% chose to put their money
into banks, with just circa 10% each preferring investment
in treasury bonds and in the stock market. Investors have Chinese savings patterns
become more cautious as most asset prices in China have
been extremely volatile in recent years. Other contributing
factors include the lack of traditional wealth management
channels and products available to customers, limited
knowledge on alternative products as well as conservatism
on the part of depositors.
As to the confidence in income growth, wealth expansion
of urban residents slowed down in the second quarter and
expectations for lower further growth. The income index for
the second quarter stood at 10, a sharp fall from the 20.8 in the
first quarter and a drop of 2.3 from the fourth quarter of last
year. This was basically because policy factors such as rise of
salary and minimum security for living expenses implemented
in 2001 have been digested. Source: People’s Bank of China

Australia - More banking online with older customers

spear-heading the move
According to a survey by Market Intelligence Strategy Centre Older customers aged 50 and above are leading the charge
(MISC), the number of Internet banking users in Australia has with almost 775,000 people in that age group banking online,
almost doubling to more than five million since last year, with a growth rate of 113%. MISC said while this group was older,
registered users growing from 2.77 million to 5.23 million in it contained many baby boomers who were still active and
the year to March. The increase in new users in the past two preferred the convenience of PC-based banking to queuing
years has quadrupled, with numbers growing from just 1.37 in banks.
million in June 2000. There were more than half a million “As this age group increases in numbers and seeks to better
new registrations in the March quarter alone. The number control its formidable asset wealth, it will influence the market-
of registered users included businesses and customers who ing and provision.
have performed at least one internet banking function in the
past year.
Australia’s internet banking participation
MISC acknowledges that the banks have strive
to make the services more user-friendly and
points to campaigns by banks to shift customers
away from branch transactions to the Internet
and other electronic options being effective. Of
course, the rise in registrations could also be
partly attributed to customers forced onto the
internet through branch closures or high fees for Note: For the 12 months ended March 2002
branch transactions. Source: The Market Intelligence Strategy Centre on major Australian banks

The Asian Banker Journal 75

BENCHMARK

Hong Kong bankruptcies and jobless rates hit record

The number of bankruptcies in Hong Kong hit a record high in As bankruptcies mount, expired credit card loans soared.
the first half of 2002 as the territory struggled to emerge from Overdue loans totalled HK$1.15 billion ($147 million) at end-
recession and battled mounting unemployment. Hong Kong March, up 44% from December 2001. The annualised credit
recorded 10,173 personal and corporate bankruptcies in the card write-off ratio rose to 9.04% in the first quarter of the year
first six months of the year, surpassing a record 9,151 cases in from 8.27% in the last quarter of 2001, with warnings that the
the whole of 2001 and 2 times more than the 3,395 cases seen numbers could hit double digits this year.
in the first half of 2001. Hong Kong has been battered by two However, Hong Kong banks have stepped up measures to
recessions in four years with unemployment swelling to a record contain the runaway bankruptcy cases. For instance, Standard
high of 7.7% by end of 2nd quarter 2002, bringing the number Chartered Bank, one of the leading credit card players in Hong
of unemployed to 264,000. Labour demand remained slack with Kong with 21% of the market, has cut credit limit on some
employers still cautious about staffing and many forecasters 130,000 cardholders. Hang Seng Bank, Hong Kong’s third largest
now expect the jobless rate to hit 8% before year-end. bank, is jacking up credit card interest rates to 35% and hiking
Although higher bankruptcies can be attributable to the late payment fees for clients who fail to make payments on time
government’s decision to change bankruptcy laws and allow starting in August. Bankers have also been lobbying the govern-
bankrupt individuals to start borrowing again after four years ment to allow them to share consumer credit data in a bid to
instead of the previous eight, analysts have also attributed the stave off the growing number of bankruptcies.
sharp rise to banks themselves. Heated competition has seem
banks aggressively increasing consumer lending and giving away
credit cards with all
Hong Kong - Unemployment rate (seasonally adjusted)
kinds of discounts
8.0
and freebies in a bid
to offset weak mort- 7.0
gage demand. Hong
Kong, which has a 6.0
population of nearly 5.0
seven million peo-
ple, had 9.38 mil-
%

4.0
lion credit cards in
3.0
circulation (1.34 per
capita) at the end of 2.0
March, the Hong
Kong Monetary Au- 1.0
thority said. 0.0
May-97

Aug-97

Nov-97

Feb-98

May-98

Aug-98

Nov-98

Feb-99

May-99

Aug-99

Nov-99

Feb-00

May-00

Aug-00

Nov-00

Feb-01

May-01

Aug-01

Nov-01

Feb-02

May-02
Over-due card
loans up Source: HKMA

Taiwan - government to penalize banks with high NPLs

According to a Financial Reform Committee draft plan, Tai- target of lowering the average NPL ratio at all Taiwan banks to
wanese banks might not be allowed to open new branches under 5 percent by the end of 2003. Banks will also be required
and simple banking units and give financial rewards to board to raise their capital adequacy ratio to 8 percent in two years.
directors and supervisors if their overdue loan ratios cannot be Moving to achieve that aim, the capital of the RTC fund will be
shaved to below 8 percent by the end of 2002. The banks will raised to NT$ 900 billion from the original estimation of NT$150
also face restrictions on distributing profits to shareholders and billion made last year.
employees whilst their reinvestment activities will be curbed. Under the principle of treating various banks according to
This set of draft measures will be presented to Premier Yu their different levels of bad loan ratios, the banks with their
Shyi-kun in early September. It is part of an overall financial ratios of NPLs reaching the level set by the government will
reform program, which aims to take concrete steps to cut the see relaxed supervision of their business operations. On the
financial institutions’ bad loan ratios. contrary, those saddled with exceptionally high ratios will be
In addition to beefing up the capital of the Cabinet’s Resolu- subject to restrictions, including the closure of a certain percent-
tion Trust Committee (RTC) fund, the panel has tentatively set a age of branches.

76 The Asian Banker Journal

 Changes in Bank Ratings for Asia as at July 31, 2002
Moody’s Investors Service Standard & Poor’s
Bk Deposit Financial Long-Term Debt Outlook Foreign Currency Counterparty Credit
Long Term Short Term Strength Senior Subordinate LT Debt ST Debt Outlook LT Debt ST Debt Watch
AUSTRALIA
Suncorp Metway A2 P1 C+ A2 A3 Stable
Bank Western Australia A1 P1 C Positive
HONG KONG
Hong Kong and Shanghai Bank Aa3 A1 Stable
INDONESIA
P.T. Bank Negara Indonesia B- C Negative
JAPAN
Bank of Tokyo Mitsubishi D-
Sumitomo Mitsui Banking Corp E
Mizuno Bank E
Mizuno Corporate Bank E
UFJ Bank E
UFJ Trust Bank E
KOREA
Industrial Bank of Korea BBB+ A-2 Stable
TAIWAN
Fubon Commercial Bank BBB- A-3 Stable
Chinatrust Financial Holdings BBB- A-3 Stable
Chinatrust Commercial Bank BBB A-2

The Asian Banker Journal

Note: Shaded areas represent adjusted ratings.

77
RATINGS UPDATE
DATAFILES

78 The Asian Banker Journal

The Asian Banker Journal 79
80 The Asian Banker Journal