Asian Banking and Finance Magazine

DISPLAY TO SEPTEMBER 30, 2011

Asian Banking & Finance Magazine gives recognition to the outstanding bank performers for 2011 behavioral economics: the new competitive edge

FROM THE EDITOR Publisher & EDITOR-IN-CHIEF Assistant Editor Art Director

Jason Oliver Niyasuthin

Editorial Artist

Regina Goloy

Editorial Assistant

Queenie Chan

Media Assistant Editorial Assistant ADVERTISING CONTACTS

Nikki Tacata Alex Wong Laarni Salazar-Navida lanie@charltonmediamail.com Carolyn Solas carolyn@charltonmediamail.com Alyz Katherine Tenorio alyz@charltonmediamail.com Loren Laylay loren@charltonmediamail.com

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This year’s Asian Banking and Finance Retail Banking Awards were the most contested in the history of the awards, and the winners can be proud of their achievements. The Awards were first organized in 2007, and have since grown to reflect the best achievements of our industry.

Tim Charlton

Estinnely Milan estinnely@charltonmediamail.com advertising@charltonmediamail.com editorial@charltonmediamail.com

I am very pleased to mention that this year’s awards saw a record number of entries, each one bringing innovation to the next level and therefore providing exceptional satisfaction to their customers. Asian banks are undoubtedly weathering the constantly changing banking landscape while delivering outstanding results.

ABF recognizes these notable efforts of the Asian banks. More than 150 bankers and financial executives were present to witness this milestone evening in Singapore in July.

Many thanks, of course, to our partners from PwC, KPMG, Deloitte Consulting, and Ernst & Young Advisory for meticulously screening the nominations and giving the final verdict on who deserves to win each category.

SINGAPORE Charlton Media Group 15 B Stanley Street, Singapore - 068734. +65 62237660

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In this issue you will find out how the winning banks’ strategy bested their competitors and how their innovative campaigns and initiatives worked for them to deserve their respective awards. We dedicate this issue to all the outstanding bank performers from this year’s Asian Banking and Finance Retail Banking Awards.

Congratulations to all the winners! We hope to see you all again next year.

www.charltonmedia.com

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Tim Charlton

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MICA (P) 249/07/2011 No. 66

ASIAN BANKING AND FINANCE | SEPTEMBER 2011 3

CONTENTS

10

14

behavioral economics: The new competitive edge

FEATURE 14 Behavioral economics:

The new competitive edge The key to financial success is for leaders to work with human nature rather than against it.

SPECIAL FEATURE Asian Banking & Finance Magazine gives recognition to the outstanding bank performers for 2011

16 ABA Bank: A trusted brand with a loyal client base

18 New core banking system: Key to

16 20 Soaring and aiming high 22 Brand makeover: Federal Bank of Lebanon s.a.l.

abf retail banking awards 2011 the awards night

abf retail banking awards 2011 winners’ profiles

EVENT 10 2011 Asian Banking & Finance Retail Banking Awards Night

24 PrimeCredit Brothers: Leading by example

26 Embracing innovation 28 TECHCOMBANK: Roaring success 30 OCBC: Banking through sickness and health

The top bank performers recognized in the 2011 Asian Banking and Finance Retail Banking Awards.

REGULAR 06 Most Read 34 Last Word

31 OCBC Securities: Smarter trading on the go

success for BDI

Published Bi-monthly on the Second week of the Month by Charlton Media Group Pte Ltd, 15 B Stanley Street, Singapore - 068734 4 ASIAN BANKING AND FINANCE | SEPTEMBER 2011

For the latest banking news from Asia visit the website

www.asianbankingandfinance.net

News from asianbankingandfinance.net

The best of asianbakingandfinance.net Expansion and contraction in Asia most read retail banking

StanChart to close 43 Korea branches amidst strike Nearly half of the lenders’ 6,500 employees in Korea walked out to protest against a proposed incentive-based compensation system.

Standard Chartered Plc’s Korean unit said it will temporarily close about a tenth of its branches as it has become the worst labor dispute involving a foreign bank in the nation in more than five years. retail banking

RHB still seeks for merger partner RHB maintains interest in M&A even after Maybank and CIMB dropped the plan.

RHB Capital, Malaysia’s fifth largest lender, remains open to merger opportunities if the price is right, its chief said after two larger rivals scrapped plans to acquire it in a bid to create Southeast Asia’s biggest bank.

BRANCH BANKING

StanChart closes down as thousands walkout of growth outside Australia.

CARDS & PAYMENTS

Banco de Oro starts offering China UnionPay services GFG Group enables the lender to harness China UnionPay transactions using its Cadencie platform.

Payment software and services company GFG Group announced the recent successful implementation of China UnionPay (CUP) issuing and acquiring by Banco de Oro Unibank Inc. (BDO) in the Philippines, utilising GFG’s Cadencie card management solution.

trade finance

Deutsche Bank Korea appeals freeze order over stock manipulation The South Korean branch of Deutsche Bank AG has appealed a Seoul court’s decision to freeze its assets over allegations that the company pocketed massive profits from illegal stock market trading late November.

The bank lodged the appeal in response to the Seoul Central District Court’s order to freeze 44.8 billion won or $42.3 million worth of deposits jointly held by the lender and Deutsche Securities Korea, its brokerage unit

Commonwealth Bank keen on expanding in Indonesia The lender resorts to overseas income to compensate lethargic lending in Australia.

The Commonwealth Bank has signalled plans to nearly double the footprint across Indonesia over the next few years in an effort to find fresh sources

BDO starts offering China UnionPay services investment banking

$3.6bn Temasek still keen

on China despite $3.6bn shares sale China accounts for 20% of the Singapore state investor’s portfolio despite having sold shares in two Chinese banks.

Singapore state investor Temasek Holdings said it remains bullish on China, even though it sold $3.6 billion worth of shares in two Chinese banks.

retail banking

AgBank eyes 45% surge in first half profit Despite the fact that its lock-up period will begin expiring in July, none of the bank’s key investors in its Hong Kong shares have hinted of selling their stake. As such, Agricultural Bank of China, the country’s No. 3 lender, expects first-half net profit to rise by more than 45%, helped by a widening net interest margin and growth in fee income. lending & credit

SME Bank targets RM1.5 B worth of loan dispersal

Indonesia to expect more branches

6 ASIAN BANKING AND FINANCE | SEPTEMBER 2011

SME Bank aims to disburse RM1.5 billion in loans by year-end.

The bank’s managing director, Datuk Mohd Radzif Mohd Yunus, said the bank gave out RM700 million in loans in the first half of this year in continuing efforts to assist small and medium enterprises.

co-PUBLISHED

A rising dragon in the ATM industry been widely adopted in China’s largest banks such as Agricultural Bank of China, Bank of China, China construction Bank, Bank of Communication, Postal Savings Bank of China and so on. At present, GRGBanking is controlling over 22% ATM market share in China--the world ‘s second largest ATM market.

GRG Building

C

hina’s phenomenal economic growth over the past three decades has attracted much attention worldwide. It has become the second largest economy last year and is now on pace to catch US by 2030, according to World Bank’s chief economist.

Today, Chinese companies are embarking towards global activities and have become the world’s leading players in the market.

Huawei, the second-largest supplier of mobile telecommunications equipment worldwide, is one of the most successful Chinese companies today. In the self-service solutions industry meanwhile, GRGBanking tops the world’s ATM market. Established in 1999, GRGBanking has grown so much in the last decade. It is now the largest cash processing solution provider in China and ranks 6th in the global market.

Its revenue for 2010 amounted to a whopping $262.9 million. Last year, the company signed two contracts worth $93.17 million with the Bank of China. Moreover, the company made a significant breakthrough in Europe last year, winning a bid to deploy 1,250 H68N cash-recycling ATMs for Ziraat Bankasi, Turkey’s biggest bank.

In 2009, World Brand Lab ranked GRG Banking Equipment Co Ltd. as among the top 500 most valuable brands in China. GRG ranked 359th, valuing over RMB 2 billion (U.S. $29 million). It is the only company in the financial self-service industry to make the list.

Sprinting to catch up In 1999, GRGBanking was established and was deemed a newcomer in the ATM industry. There was harsh competition in the market dominated by foreign companies like Diebold, NCR and Wincor Nixdorf.

Product quality was the key in order to win the trust of big state-owned banks in China. GRGBanking inherits its high quality standards from parent company Gougzhou Radio Group（GRG）which specializes in military communication. A year after its establishment, GRGBanking successfully passed ISO9001: 1994 quality system certification which was a leap towards a new stage of production management.

The reliability of the products combined with responsive service established the company’s reputation in the Chinese Banking industry.

Contracts from leading banks in China started to come one after another. Therefore, GRG banking has grown rapidly amid severe competition. In 2006, GRG entered into the top 3 Chinese ATM market. In 2007, it was listed in China’s Stock Exchange Market. In 2008, GRGBanking became the largest ATM supplier in China and broke into the global maket’s top 10. It took less than 10 years for the company to grow into the No.1 ATM brand in China.

Today, GRGBanking’s ATM services have

“GRGBanking’s revenue for 2010 amounted to $262.9 million”

An emerging technology leader China has long been regarded as a latecomer in international technology because of its isolation during the socio-economist era of the 50s to 70s. However, this has changed.

China has heavily invested in R&D, with spending growing by 20% per year since 1999 to reach over US$100 billion a year. Having been a licensee of intellectual property rights for a long time, Chinese companies are now trying to create their own technologies and patents.

GRGBanking, for example, has already applied more than 153 domestic and international patents by June 2010.

Besides, GRGBanking unveiled the first Chinese ATM R&D Academy last November after more than one year of preparation. The GRG R&D Academy is recognized as a state level financial electronics technology center. It consists of the R&D Center Office, Institute of ATM, Institute of ATM security, Institute of General Research, Institute of Basic Research, Institute of AFC Research, Institute of Software Research and the Test Center.

In addition to these, the GRG R&D Academy has 1800 technicians and over 400 senior researchers. Moreover, the chief scientist of the ATM R&D Academy, Dai Ruwei is the most prestigious academician.

This has brought GRG’s current R&D capability to the top level, worldwide. It is now one of the few in the world that has its own IPR of cash processing mechanisms including cashout, cash-in and cash recycling modules.

“In terms of future, as I explained, cash processing industry is still undeveloped and has big potential, while GRG is pioneer and has good position in the field. I believe with our current business strategy, philosophy and working culture, we will have a very bright future,” Mark Yip, Managing Director of GRGBanking, said.

CONTACT GRG Banking Equipment Co., Ltd 9 Kelin Road, Science City, Luogang District, Guangzhou, China Tel: +86 020-82188010 Website: www.GRGBanking.com

Banking Technology news transmitted daily on asianbankingandfinance.net

Banking Technology news transmitted daily on asianbankingandfinance.net ASIAN

BANKING FINANCE

Juan David Morgan Jr., Enrique de Alba, Juan David Morgan G., Jorge Luis Reyes, Roberto Lewis Morgan and Eduardo Enrique Morgan III, partners of Morgan & Morgan.

At the center, Alexis Medina A., Executive Director of the Singapure office.

Morgan & Morgan Group celebrates its Third Anniversary in Singapore

The Morgan & Morgan Group hosted a cocktail in Singapore on April 13, 2011 at the Marina Mandarin Hotel, to commemorate its third year of successful operations in the heart of Southeast Asia. The Singapore office was established in 2008 and offers corporate, maritime and legal services, as part of Morgan & Morgan's global network in more than 20 cities in Europe, America and Asia.

Dr. Juan David Morgan G., founding partner of The Morgan & Morgan Group, addressed the distinguished guests, pointing out the many similarities between Panama and Singapore, such as their strategic geographical positions and their well-developed service oriented economies. He closed by revealing the future plans the Morgan & Morgan Group has for its Singapore office, which include obtaining a Get daily industry specific news for Banking Technology only at asianbankingandfinance.net.

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Trust Company License and incorporating the office into Morgan &

48 SINGAPORE REVIEW | MARCH 28 ASIAN BANKINGBUSINESS AND FINANCE | JUNE 20112010

and financial planning.

Get daily industry specific news for Banking Technology only at asianbankingandfinance.net Click on the left hand side under sections to get your industry content, your way.

Sign up for the weekly Banking Technology newsletter.

Only at asianbankingandfinance.net

Morgan's fiduciary network services for asset protection, tax, estate Participating guests included important law firms, banks, asset management companies, trust companies, shipping agents as well as ship owner’s representatives in Singapore. Ms. Patricia Nuùez Spiegel, General Vice Consul of the Republic of Panama in Singapore, was also present in this special event.

The Morgan & Morgan Group has more than 88 years of successful experience. It has developed an extensive and efficient operations network in more than 20 cities in America, Asia and Europe, delivering the highest quality of legal, fiduciary and financial services under the best international industry standards.

Asian Banking and Finance Retail Banking Awards 2011

T

he region’s best banks were recognised at this year’s awards held in Singapore. More than 150 bankers from around Asia were on hand to cheer on the winners at the region’s most prestigious retail banking awards.

Since initiating the Awards in 2007, Asian Banking and Finance Magazine (ABF) has been recognizing the best performances of various banking and finance institutions around Asia. This year, ABF focused on best-of-the-best practices in the retail banking sector.

The nominations were screened by the top partners of different firms in Asia. The judges included: •Dominic Nixon, PwC •Egidio Zarrella, KPMG •Mohit Mehrotra, Deloitte Consulting, SEA •Liew Nam Soon, Ernst and Young Advisory LLP The judges looked at the nominees’ strategy, service or product based on what makes it different from others (innovation), how it benefits the market as a whole (effectiveness), and how flexible it is to changes and progressive opportunities (dynamism).

Publisher Tim Charlton said: “This year saw a record number of entries and some excellent examples of banks leading through innovation.”

ABF salutes all the winners for their outstanding performances in the respective categories. The winning banks are:

The team from OCBC Bank

Martin Grimshaw & Ian Joshua of Deutsche Tim Charlton, Editor-in-Chief of Asian Bank AG Banking & Finance Magazine

Best Self Service Initiative • Gold: Citigroup Hong Kong • Silver: DBS Bank • Bronze: Asia United Bank Best Direct Marketing Campaign in Indonesia • PT Bank Mandiri Best Direct Marketing Campaign in Taiwan • Taishin Bank Philippine Best Bank Website • Rizal Commercial Banking Corporation

Mr. Bandit Rojanavongse of Siam Commercial Bank

Thailand Best Bank Website • Siam Commercial Bank Hong Kong Best Bank Website • Citigroup Hong Kong Best Security Initiative • RHB Bank Berhad Best Credit Card Initiative • GOLD: OCBC Bank • SILVER: Citigroup Hong Kong Best Branch Initiative • GOLD: Citibank Singapore •SILVER: Citigroup Hong Kong

10 ASIAN BANKING AND FINANCE | SEPTEMBER 2011

The team from OCBC Bank

Andi Tenri Gappa of PT Pan Indonesian Bank

The team from PrimeCredit Limited

Jacquelyn Tan & Ong Lay Choo of Citibank Singapore

The team from PT Bank Mandiri Tbk

Ng Kwang Liang of Public Bank Berhad Delegates enjoying the event

Tim Charlton with Jessie Tang of CIMB Berhad receiving the Gold The team from PT Bank Danamon Tbk who won the Gold award for Best Core award for Best Advertising Campaign Banking System Initiative

Sharanjit Leyl of BBC News, Host for Wilfredo Rodriquez of Asia United the evening Bank

Tiffany Ko of Taishin Bank

Halil Ibrahim of TC Ziraat Bank receiving their award

ASIAN BANKING AND FINANCE | SEPTEMBER 2011 11

Asian Banking and Finance Retail Banking Awards 2011 Best Advertising Campaign • GOLD: CIMB Bank Berhad • SILVER: DBS Bank • BRONZE:Citibank Singapore Best Corporate Social Responsibility Program • GOLD: The Hong Kong and Shanghai Banking Corporation Singapore • SILVER: Maybank Singapore •BRONZE: Bendigo and Adelaide Bank

The team from Techcombank

Best Core Banking System Initiative • GOLD: Bank Danamon • SILVER: Citigroup Hong Kong • BRONZE: Asia United Bank Best Environmental Initiative • GOLD: The Hong Kong and Shanghai Banking Corporation Limited Hong Kong • SILVER: Deutsche Bank AG • BRONZE: Philippine Business Bank Best Environmental Initiative – Indonesia • PT Pan Indonesia Tbk. Best Online Banking Initiative in the Philippines • Security Bank Best Online Banking Initiative in Hong Kong • Citigroup Hong Kong Best Online Banking / Securities in Singapore • OCBC Securities

Peter Ormandy & Robert Musgrove of Bendigo & Adelaide Bank

Sulaiman Al Harthy of Bank Muscat

Most Innovative Banking Technology • TC Ziraat Bank Best ASEAN SME Bank • OCBC Bank FINANCE COMPANY OF THE YEAR Hong Kong Finance Company of the Year • PrimeCredit Limited Singapore Finance Company of the Year • Hong Leong Finance Thailand Finance Company of the Year • Siam Commercial Bank RETAIL BANK OF THE YEAR Cambodia Retail Bank of the Year • ABA Bank Cambodia Malaysia Retail Bank of the Year • Public Bank Berhad Philippine Retail Bank of the Year • Rizal Commercial Banking Corporation Singapore Retail Bank of the Year • DBS Bank Thailand Retail Bank of the Year • Standard Chartered Bank (Thai) Public Co. Ltd. Vietnam Retail Bank of the Year • Vietnam Technological and Commercial joint-stock Bank Taiwan Retail Bank of the Year • Taishin Bank Oman Retail Bank of the Year • BankMuscat BEST INTERNATIONAL BANK OF THE YEAR • Citigroup Hong Kong

12 ASIAN BANKING AND FINANCE | SEPTEMBER 2011

Emily Chow of PrimeCredit

The team from DBS Bank

Askhat Azhikhanov of ABA Bank receiving the Cambodia Retail Bank of the Year

The team from Maybank Singapore

The team from OCBC Securities

Romina Binti Talib of RHB Bank Berhad Teresa Au of HSBC Hongkong with Tim receiving the award Charlton

The team from Hong Leong Finance Limited

Goh Kong Aik of HSBC Singapore accepts the award

The team from RCBC Bank

Keith Chan of Philippine Business Bank receiving the award

Krisana Gallezo, Niyasuthin, & Ann Aquino of Asian Banking & Finance Magazine

Chantarmanee Nunchaiya of Standard Chartered Thailand

Daniel Yu of Security Bank receiving the award ASIAN BANKING AND FINANCE | SEPTEMBER 2011 13

Behavioral economics: The new competitive edge The key to financial success is for leaders to work with human nature rather than against it.

A

n emerging management discipline based on the principles of behavioral economics is helping banks make sense of the behavior of customers and employees.

For Larry Emond, Managing Partner and Chief Marketing Officer of Gallup Consulting, whose role revolves around counseling client companies on strategic issues, applied behavioral economics can provide business leaders with insights they otherwise might not have considered.

“In today’s hypercompetitive global business environment, the secret to driving higher levels of growth and profitability lies in understanding the powerful role human nature plays in the marketplace and in the workplace,” says Emond.

Emond took time out to give ABF his take on the future of customer and employee engagement, and why he says applied behavioral economics plays an important role in the financial growth of a bank.

“the secret to driving higher levels of growth and profitability lies in understanding the powerful role human nature plays in the marketplace and in the workplace.”

14 ASIAN BANKING AND FINANCE | SEPTEMBER 2011

ABF: How is Behavioral Economics different from neoclassical economics?

Larry: Neoclassical economics assumes that human beings are rational, making economic decisions based on logical rational data. Before having a decision, they evaluate all of the available evidence that is the benefits of a certain course of action against its costs. This has led to investment in appealing mainly to the rational side of customers and employees to engage them.

For the last twenty years, we in Gallup have been trying to understand why employees and customers behave the way they do. What we have learned is that emotion plays a pivotal role in decision making.

Unlike neoclassical economics, behavioral economics is based on the realization that human beings are not very rational.

ABF: What competitive edge does Behavioral Economics give to the banks?

Larry: Banks have been in the forefront of measuring how customers feel. But banks are not paying enough attention to the emotional relationship the customers have with the employees. Banks have to understand all the inherent contradictions, flaws and emotions that come with being human. Their performance matrix should be based on both the emotional state of the employees and the customers.

Gallup’s research has found that banks can build an emotional relationship with customers by building emotional relationship first with employees — but not just a linear relationship.

The miracle is when a branch finds ways to engage both its employees and customers at the same time.

When that happens, the branch will be up to five times more successful on any of the key metrics, like revenue growth, deposits and loans, on cross selling and upselling to customers etc. and hence the economic equity is anywhere more with engaged

feature “Banks have to teach their employees the psychology of customer engagement.”

Larry Emond, Managing Partner and Chief Marketing Officer of Gallup Consulting

customers than disengaged customers.

Fig 1.1 illustrates that branches with higher employee engagement are most likely to have higher customer engagement. When you see a scattered kind of variation on any metric, it means you have a situation that is not being managed. Variation is the scourge of any management task.

All of this plays out the same way in call centers and other touch points where employees meet customers.

ABF: What is the correlation between customer-employee encounter to financial performance?

Larry: This correlation can be best explained with figure 1.2. Engaged customers are more likely to spend more with the business and are unlikely to go with a competitor. If this happens at all branches, there is an increase in the bank’s net profit, its revenue and market capital. The bank becomes a leading player in the industry.

ABF: How can banks engage their customers?

Larry: The absolute differentiators that make customers highly engaged are how they are remembered and treated when they are walking in the branch or when they are speaking to an employee over the phone. The way the employee connects to customers is how you engage your customers.

Business leaders need to engage their employees to engage their customers. Banks have to teach their employees the psychology of customer engagement.

ABF: How do banks find the right kind of talent?

Larry: Behavioral Economics recognizes that people are very different from each other. Some of them are naturally more inclined to work with clients, some behind the scenes, while others are naturally inclined to manage other people.

A psychologically wired branch manager has a direct impact on the growth of the bank. If the branch manager needs to be changed, Gallup has a method of designing interviews that enables our clients to find people who are currently working for them or from outside who are psychologically designed to bring out the best of the branch employees and engage the customers.

The number one rule is to begin with the branch manager as the critical point of contact for both customers and employees.

ABF: Do happy employees lead to happy customers?

Larry: Not always. When we first entered the field of behavioral economics, we had a breakthrough that it doesn’t always work this way. Essentially, we want to believe that happy employees will lead to happy customers, but that is not true. You can have employees who are highly engaged, but may not directly lead to engaged customers.

Think about the time you went to a store and at the counter, a couple of the employees were having a great time talking to each other. The last thing they wanted was is to be distracted by the customer. We have seen in our research that even though employees may be really happy, their happiness may not directly relate to happy customers. You also have customers who are very happy but they are happy because the employees

have been asked to work extra hours in order to serve the customers.

Clients we have been working with for many years, if they find in their branches the phenomenon that the customers are engaged but at the same time employees are not engaged, know that the environment won’t sustain in the long haul.

Therefore, a business has to aim to be in a position of being above average on both employee engagement and customer engagement or even being on the same level for that will lead to an increase in financial performance.

The key points are that behavioral economics works on both employee engagement and customer engagement. Every encounter the customer has with an employee is an opportunity to increase the customer engagement level. The performance of this encounter is a phenomenon that we have to measure and manage at all levels. Banks that show the most interest in behavioral economics and are keen to understand, measure and manage the emotional relationship of customers are the banks who are on the forefront of the industry for they are the ones who are most competitive.

Optimization at Bank S I 2004 (Fig 1.1)

Source: Gallup Consulting

What have been the results? I Bank S (Fig 1.2)

Source: Gallup Consulting

ASIAN BANKING AND FINANCE | SEPTEMBER 2011 15

Cambodia Retail Bank of the Year - ABA Bank

ABA Bank: A Trusted Brand with a Loyal Client Base

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racing its roots from October 1996 as a commercial bank in The Kingdom of Cambodia, Advanced Bank of Asia Limited or ABA Bank has evolved to be one of the most dynamic institutions for banking and customer services.

Serving both corporate and private clients, ABA Bank has grown from a small banking institution with around 20 employees to 204 employees to meet the growing market demands.

ABA Bank’s edge over other banks ABA Bank prides itself to be the leader in providing the most advanced internet and mobile banking technology in Cambodia.

But what sets them apart is their international and highly experienced management team, that also has an excellent team of young professionals down the line.

“ABA Bank’s key to success is our team.

Simple as that. A highly experienced international top management team working together with the best local minds to bring its customers services of international qual- ABA BANK: Conquering the banking business in Cambodia ity. From this we are able to create the prod- increased its registered capital to US$36 par with the leading banks in the country ucts and services that are of high quality and million to comply with new National Bank and well ahead of its mid-sized competistand out between other alternatives,” said of Cambodia (NBC) minimum capital re- tors. quirements due to come into force at the end Chief Marketing Officer Juveris Tenisons.

Keeping a positive outlook In 2010, ABA Bank added another of year 2010.

“The new capital injection means we Consequently, different challenges go achievement to its portfolio as it won the prestigious “HSBC Global Payments and are extremely well placed to continue along with having a trusted brand in the with our bold expansion strategy,” said banking industry. But Mr. Tenisons said, Cash Management 2010 Golden Award.”

“Our loyal client base, our overall success CEO Madi Akmambet.

Mr. Hersel Mehani, Senior With the new capital in- of the bank and international acknowledgVice President of Global Payjection, ABA is in great po- ments through awards for the successful ment and Cash Management “The new capital sition to provide innovative work that we are doing is the power and at HSBC described ABA Bank injection means we new banking products and energy that keeps us going forward and to have an “excellent standard,” are extremely well services to the market, which helps us overcome any challenges that we which serves as Cambodia’s placed to continue includes deposit and savings encounter.” global link to the international with our bold As ABA realizes that its growth would banking system. expansion strategy.” plans for retail customers, visa and mastercard prod- not have been possible without its loyal cliABA has been the fastest ucts, car loans and home ents and supporters, the Bank had extendorganically growing bank in Cambodia for the past two years providing mortgages. It also provides secure inter- ed loans worth $94.23 million by the end customers with a wide range of advanced net banking services to allow customers of June 2011, more than 100% the same banking technologies such as iBanking and to manage their finances from the com- time last year June end 2010 when it had lent just $46.8 million. eCare, as well as developing an ever-growing fort of their home or office.

“By continuing to innovate and expand, For small and medium-sized enterprises network of full service branches and ATMs. Over the last 12 months, assets have more (SMEs), entrepreneurs and larger corpo- we are confident we can cement our growthan doubled from $97.3 million to $196.1 rate clients, ABA provides a full range of ing reputation as one of Cambodia’s leadmillion. Bank deposits grew more than two banking services, including deposits, busi- ing banks,” said Mr. Akmambet. times from $77.7 million at the end of June ness loans, remittances and payroll management.

2010 to $161.3 million at June end 2011.

CONTACT The mid-sized lender now has eight fullTel: +855 23 225 333 service branches across the country’s three Striving to achieve more Email: info@ababank.com But ABA Bank doesn’t stop there, as it con- major commercial centres and an ever exWebsite: www.ababank.com tinues to seek growth and success. It has panding network of ATMs, putting it on a 16 ASIAN BANKING AND FINANCE | SEPTEMBER 2011

Best Core Banking Initiative - Bank Danamon Indonesia

New Core Banking System: Key to Success for BDI

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vision that includes change is vital for the growth of any organisation in a competitive market. When Bank Danamon Indonesia (BDI) embarked on its journey of transformation in 2004, its key strategic programme, bolstered by the objective of becoming Indonesia’s leading financial institution, was based on this fundamental rationale.

Challenges of the new NCBS programme It started with preparing an IT End State and Roadmap aiming at superior customer experience, cost-effective delivery, sound MIS and risk management, and secure, resilient banking environment. In addition, multiple projects and programmes were defined covering infrastructure and applications. Above all, the replacement of ICBS

by New Core Banking System (NCBS) was the key strategic programme for making a quantum jump in flexibility, speed to market, service quality, reliability and scalability, Mr Kanchan Nijasure, CIO, BDI, shares.

However, implementing a new core Mr Kanchan Nijasure, Chief information officer of Bank Danamon Indonesia banking system was not an easy task. Mr was being implemented. This insulation planned forward and backward swing-over.

• Last but not the least, it was important Nijasure identifies the challenges that faced layer ensured that all customer transactions the NCBS programme—minimising in- would take place in “business as usual” to make Bank Danamon Team as the Sysconvenience to customers, uninterrupted mode, irrespective of the stage of imple- tems Integrator for the programme. Whilst roll-out of all IT initiatives to support busi- mentation covering branches, electronic this ensured full engagement of the related ness growth and continued timely report- channels, external payment systems and user areas and IT during planning, execution and support of production, it also ing to the regulators and top management. diverse internal applications.

• Managing the entire programme in eliminated the dangers of critical knowlMoreover, the internal conditions and cirmanageable bites with tangi- edge gaps affecting either the project or cumstances in BDI added on ble progress at each stage was production. to the complexity of the recritical. Hence, the implemenThe NCBS programme was initiated in placement project. BDI’s operations spanned over three dif- “...implementing a tation was planned in three June 2007 and completed in August 2010. ferent time zones with different new core banking broad phases, namely Enter- “Customers did not have to change their clearing time windows. Also, system was not an prise GL, Mass Market Busi- account numbers or know whether a given ness and Conventional Bank- branch had been converted. Furthermore, most of the branches across Ineasy task.” ing Business. The conversion during the implementation, Adira Quandonesia’s vast archipelago were of branches was carried out tum and Pawn-broking businesses were operating in low bandwidth in waves defined by clearing launched. Consumer Internet Banking infrastructure. That was not all. “Many lines of business, large number windows applicable to different regions. All and Contact Centre were implemented of branches across different time zones, users were given extensive hands-on train- in parallel with NCBS. Every month, acmultiple clearing windows, multiple chan- ing. Soft Launch was done at each branch curate regulatory reports and MIS reports nels and several interfaces added to the with use of Buddy Bankers in initial weeks were produced on time. The programme for each conversion wave. was completed within budget despite scope complexity,” Mr Nijasure recalls.

• A disaster recovery readiness at every enhancements and major changes in Bank stage during the implementation was also Danamon top management,” Mr Nijasure Facing challenges with strategic choices At this point, the Bank made four strategic considered necessary. Hence, right from highlights. choices, worked through the implications the beginning, the new system was made and executed them with a rigorous disci- available from the Main Data Centre and CONTACT Back-up Data Centre with synchronous pline: Tel: +62-81586500-150 • It looked at defining and building an data replication and zero data loss. During Email: sumartono.tono@danamon.co.id insulation layer to minimize customer the implementation, the system was operWebsite: www.danamon.co.id and user inconvenience while the system ated from either Data Centre with well18 ASIAN BANKING AND FINANCE | SEPTEMBER 2011

Best Direct Marketing Campaign in Indonesia- bank mandiri

Soaring and Aiming High

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Making a name in the banking industry ormed on 2 October 1998 as a part of the Government of Indonesia’s bank restructuring program, Bank Mandiri has now transformed into one of Indonesia’s strongest retail banks. Without leaving its previous core competency in corporate banking, Bank Mandiri has succeeded to penetrate the retail banking segment and draw consumers’ attention.

In this segment, Bank Mandiri now has a full range of retail product and services, including a rising star product, credit card.

In so short a time, Bank Mandiri became one of the biggest credit card issuers in Indonesia. Since the full operation of issuing credit cards in 2003, we are now in top 4 in terms of the receivables, holding 11% of the market share (May 2011). Our credit card business is constantly growing more than 30% annually and receiving acknowledgements from renowned institutions, both in the national and regional scope.

Mansyur S. Nasution, Senior Executive Vice President, Bank Mandiri Target goals for the future In line with our corporate plan for the next nology). It’s the human and organizational the credit card market in Indonesia suf5 years, the goal of credit card business in aspect of analytical competencies that are fered a negative growth, Bank Mandiri Bank Mandiri is to be the top issuer in truly differentiating. We believe that to be achieved positive YTD growth of 19.96% the market by growing 5 times in 6 years, able to build CLM capabilities, it requires at the end of the year. Visa Worldwide, on their Strategic Portfolio Insight (SPI) achieving 12.5% market share. It was seen at least three initiatives: 1. Designing the organizational struc- Report on June 2010, stated that Mandiri as an aggressive goal since the credit card Visa’s growth was much better than the market in Indonesia is highly competitive. ture 2. Creating analytical competencies and industry. A survey done by a well known After 6 months of strategic planning, we having a customer-centric world research company has also stated believe that strong knowledge that in 2010, even though Mandiri was still mindset about our customers is the key “While the credit card 3. Developing system and in #3 in the Brand Equity Index, it was the to reach the goal. only issuer that was rising up in all 6 big To make it visible, we market in Indonesia infrastructure It might be too early to say cities in Indonesia while the other top big picked the concept of Cus- suffered a negative tomer Lifecycle Management growth, Bank Mandiri that the CLM is a success, five issuers were experiencing downgrade. have positive YTD Last but not least, the Asian Banking & but after a year of implemen(CLM) as our key enabler.

The basic concept of CLM growth of 19.96% at tation, we believe that this Finance Magazine has granted us The Best is to treat cardholders based the end of the year.” strategy has started to pay Direct Marketing Campaign at the ABF off. Using our portfolio data, Retail Banking Awards held last July 2011. on their lifecycle and behavior and deal with them differently. Since the value per customer, treated based on We realized that our achievements so far every cardholder is different, then the his lifecycle and behavior, has increased were only small steps compared to our huge number of cardholders become a after the implementation. In contrast, the goal of achieving a potentially huge gain real challenge. To find their similarities, control population (a group of customer from our CLM implementation strategy. cluster them, and treat them with a ‘per- that haven’t been treated differently) has We will continue to aim for improvements in this initiative and believe that this would sonalized’ relationship will need special showed a negative value movement.

Our program campaign has also be- lead us to reach our vision to become the business requirements such as analytic capabilities, robust IT system, and infra- come more efficient and effective. In the most admired issuer for innovation, comexternal market, we compared how the petitiveness, and efficiency. structure.

Following that strategy, several initia- whole portfolio has changed. We took data tives were designed and executed in early from the central bank and we used YTD CONTACT 2010. We felt that the key initiatives should growth of receivables in quarter from year Tel: (021)- 5299-7777 include all aspects because CLM does not 2010 to compare with receivables position Website: www.bankmandiri.co.id simply equate with IT (Information Tech- as of December 2009. Surprisingly, while 20 ASIAN BANKING AND FINANCE | SEPTEMBER 2011

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Lebanon Retail Bank of the Year - Federal bank of lebanon

Brand makeover: Federal Bank of Lebanon s.a.l.

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ederal Bank of Lebanon s.a.l. is one of the oldest banks and amongst the first 30 banks to be licensed in Lebanon. It was founded in 1952 and since then, it has been providing a full range of products and services including commercial, trade and corporate finance, retail banking, plastic cards, wealth management and financial market brokerage to its customers. Federal Bank of Lebanon is part of a group of banks that are based in Cyprus, Tanzania, Russia and soon China. Due to the regrettable civil war in the 70s, the bank had to curtail its activities in Lebanon and redirect its energies toward the international scene, while keeping its presence in Lebanon.

New leader, new strategies In 2008, a new management team under the leadership of Mr. M. Yasser Mortada, CEO - General Manager, developed a new strategy to re-introduce and reinforce the bank’s presence in Lebanon. Federal Bank of Lebanon reinvented itself with a brand new identity, with a logo completely reworked Mr. Mohamad Yasser Mortada, the Chief Executive Officer of Federal Bank of Lebanon s.a.l. for an attractive vibrant new look. The total sis, anticipating the ongoing future. It also two main areas: the reception area and the makeover, however, was not just aesthetic: it stands for a modern couch, symbolizing the workstation area. The reception area is manwas carried out on a conceptual and practi- hospitality of the bank and the warm com- aged by a Meeter-Greeter (MG) from a Hotel Management background. The purpose of cal level as well. The essence of this remod- fort therein.

The challenge was to revolutionize bank- this area is to receive the client and convey eling was to spare no effort in making the customer’s experience as comfortable and as ing as it was known. This was achieved by to him/her the hotel reception feeling and personal as possible. With this drive, Federal adopting the one-to-one banking experi- professional service. The client will then be Bank of Lebanon was thus transformed into ence and making it accessible to the public. directly accompanied to the working station It was based on the rationale area by the Meeter-Greeter. The working staa Boutique Bank, making it the that it would carve a unique tion area is managed by a Relationship Manfirst of its kind in Lebanon and identity that would serve to ager (RM) supervising different Relationship the MENA region. The concept raise Federal Bank of Lebanon Officers (RO). It is formed of desks “one-stop emphasized on completely removing the counter and creat- “It’s the new concept above the competition, and shop”. Every Relationship Officer will reing a one-to-one personalized bank, where comfort turn it into an immediately ceive one client at a time and can provide a trumps formality.” recognizable name in the busi- full range of banking services. No counters, desk. This was seen as a revoluonly desks managed by relationship officers ness. tion in the art of banking and trained to execute and process any type of the Federal Bank of Lebanon transactions from account opening, withA complete makeover emerged as a leader in pioneerThe changes did not only occur in the bank drawals, deposits, retail loans, payments, etc. ing the change.

You may call this concept “Relational” or Furthermore, the bank revealed its new as it did business now, the complete corpoimage and identity in 2010 through a full- rate environment underwent a makeover. “Dialogue” Banking, the “Retail” or “Boufledged campaign covering a new concept “It’s the new concept bank, where comfort tique” Experience, the “Lounge-Style” or for the branches, new communication, trumps formality. According to many bank- “Coffee-Shop-Style” branch, but all of these TV commercials, radio, billboards, press, ers, designers and developers, the days of have one thing in common; they are adding newspapers etc. The new logo completed echoing monolith bank buildings of mar- a human, homely element to banking, Morits brand image. The typeface is an elegant ble and granite, or buildings full of fluores- tada thinks. professional font in solid grey, denoting cent lighting and colourless cubicles, may strength of character. The icon is a reverse be numbered,” says Mortada. In short, the CONTACT apostrophe, in bold fuchsia/red. It stands Federal Bank of Lebanon, through its new Tel: +961-1-212300/6 for openness, contrary to a regular apostro- concept, has combined a bank with a hotel Email address: info@fbl.com.lb phe which serves to close a quote, and looks reception.

Website: www.fbl.com.lb In its new avatar, the branch is divided into forward to the beyond, as if it were an ellip22 ASIAN BANKING AND FINANCE | SEPTEMBER 2011

Singapore Finance Company of the Year - hong leong finance

50 years of glory: Hong Leong Finance

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ong Leong Finance (HLF) group traces it roots back to 1961 when it began life as a humble loans and deposits firm. Little did its stakeholders know that 50 years down the line, what started as a small and medium enterprise (SME) would evolve into Singapore’s largest finance company with a distribution network of 28 branches.

Today, as the financial services arm of the Hong Leong Group Singapore, HLF offers an extensive and comprehensive suite of financial products, spanning from deposits to loans for individuals and corporations.

Drawing on its journey as an SME, HLF has dedicated itself to helping others grow. It is one of the pioneers in the Local Enterprise Finance Scheme administered by SPRING Singapore and a leader in SME financing, providing a slew of government-assisted programmes to aid companies in their growth.

To commemorate its 50th anniversary this year, HLF is taking its commitment to helping SMEs to greater heights. It launched special financing packages to defray their rising SME Centre at City Square Mall HLF is also reaching out to customers in business operating cost, by providing value bundles for SMEs to lower financing cost cyberspace, by revamping its website. The for factoring, accounts receivables, as well as new portal www.hlf.com.sg incorporates residential and commercial properties with more user-friendly features like the “Cona one month interest waiver for equipment cierge” service which offers users quick confinancing option. A deposit campaign with nection to the required information. Visitors special rates and Jubilee Mug give-aways to the site can also be updated with up-towere also rolled out to reward its loyal cus- date news through its Channel NewsAsia (CNA) newsfeed. tomers.

Throughout changing landHLF has also enhanced its scapes over the past 50 years, distribution network with the latest initiative on SME Centre@ “HLF is dedicated to one thing remains the same – the strong relationship HLF has Branches for customer conven- continually deepen ties with both its enjoyed with its stakeholders ience. To date, four new SME Centres at City Square Mall Ju- corporate and retail and business partners. HLF is customers.” dedicated to continually deeprong East and Bedok have been en ties with both its corporate set up. The latest of which just and retail customers. opened in July 2011.

Reflecting on its long-term partnership “The centres bring us closer to the business community in all parts of Singapore. The with local entrepreneurs, Mr Macdonald one-stop financing centre provides easy ac- smiles, “Our customers tell us that they encess and facilitates business activities which joy our consistent personalized services as are popular with our customers. Plans to roll they like to be served by familiar Relationout more centres are in the pipeline,” said Mr ship Managers who understand their needs.

Ian Macdonald, President of Leong Finance. Because they trust our service, we have seen Not forgetting its loyal retail customers, many new customers referred by them. We HLF strives to offer competitive interest rates would like to thank them for our success toand is a key lender in the HDB home loan day.”

HLF believes in taking a holistic approach market. The HDB home loan is an important and pivotal component in the overall to nurturing the SME community – not just HLF’s business growth strategy, Mr Macdon- by working with public and private stakeholders to contribute to SME-geared events ald reveals.

24 ASIAN BANKING AND FINANCE | SEPTEMBER 2011

and initiatives but also through constant upgrading of its products and services. The company strives to deliver revolutionary and relevant customer-centric financial solutions by tapping on innovation and enhancing executive capabilities for the benefit of both corporate and retail customers to maintain its competitive edge in the Singapore financial landscape.

Going forward, with the uncertainties in overseas economic and financial markets, HLF is taking a cautiously optimistic view in business investment and expansion plans to tap on the growing affluent market in Singapore. Its primary focus remains in the property and SME markets to build a sustainable loan portfolio growth and retain its leadership in financing. While challenges lie ahead, HLF will remain vigilant of the risks, monitor changes and developments closely in order to capitalize on openings that may arise. With its core strategy in place and determination to succeed, HLF is well placed to continue to be a key player in the Singapore financial community in the next 50 years of its service to the Singapore consumers and SMEs

CONTACT Ms Yet Pek Yeen Tel: (65) 6415 9340 Email: yetpy@hlf.com.sg Website: www.hlf.com.sg

hong kong finance company of the year - primecredit brothers

PrimeCredit Brothers: Leading by example

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hough finance companies have been labelled as “loan sharks”, PrimeCredit Brothers, Hong Kong, has successfully managed to change the customers’ perspective with an image that is not just friendly but also very professional.

The 3-D Innovation Process How did PrimeCredit manage to clear that stigma? Through a three dimensional process of innovation, says PrimeCredit’s head of marketing Emily Chow. The first strategy involved an innovative brand strategy that rode on the insight that consumers were looking for a more promising and efficient loan application experience to address their immediate monetary needs after numerous rejections from banks. Based on research findings, the brand strategy of PrimeCredit Brothers was then developed.

“From focus groups, we understand that the target customers of financial institutions in Hong Kong do not solely focus on product features. They are more concerned about the commitment to help them through flexibil- 3 - Dimension Innovation from PrimeCredit Brothers • Qualitative measurement – that is the ity of application procedure as well as advices on repayment plan provided by the financial brand performance, which includes the institution as they might have encountered brand awareness, brand preference, etc.

• Quantitative measurement – it refers to a certain level of dissatisfaction throughout the loan approval process from banks before business performance which includes leads approaching us, such as not enough loan generation, market share, business growth • Servicing Index – that is customers’ feedamount, being requested to provide a lot of documents, longer approval process. There- backs on our services, such as staff’s politeness, professionalism, turnafore, we developed an imagery round time, etc. icon of “PrimeCredit Brothers” for our personal loan service, which in Chinese society means “The key successful Key to success: Listening to of being supportive and negoti- factor for PrimeCredit customers Chow emphasises that riding able, telling the customers that is listening to the on the well-built friendly and we, PrimeCredit, are more customers.” supportive image in sub-prime committed to help them and personal loan segment, it is more negotiable throughout necessary to elevate the prodthe loan approval process provided with flexible applicable requirement uct positioning of “being supportive” from and more options for repayment plans. The a product level to a brand level covering all icon of “PrimeCredit Brothers” had made us range of products by implementing a brand become friendlier and closer to the consum- campaign. “The brotherhood image at the moment was developed for personal loan ers,” Chow shares.

On top of the wide range of loan products products only. Coming forward, we would provided, a new product called Stand-By elevate the essence to the brand level and Cash was developed. It was a new product in bring it across all products.

Therefore telling the consumers that the market with a unique feature of up to a 100 days Interest-free period for Card repay- PrimeCredit has always been supportive to our consumers for more than 30 years, ment settlement.

The success of the innovative changes is bringing them with a wider choice of prodmeasured by three methods in PrimeCredit ucts and higher quality of services across all products, from P-loan to mortgage, VISA Brothers: 26 ASIAN BANKING AND FINANCE | SEPTEMBER 2011

card and deposit service, providing them with more professional financing service.”

To further uplift the brand equity, PrimeCredit has also put a lot of efforts in taking up social responsibility, such as contributing to volunteering services and donation. “Further mileages could be made possible in area of expanding our target segments, providing better services to more people other than traditional personal loan segment only. Apart from it, taking up the role of a responsible corporate citizenship shall not be neglected. Therefore, we will also be participating more proactively in social services, e.g. charity activities and educating the public about better financing management,” she shares.

All in all, the key successful factor for PrimeCredit is “Listening to the customers”, therefore, we organize a lot of focus groups and conduct a series of surveys to understand how they think and what they need.

Through this, Prime Credit knows what it must do to provide a better service to its valuable customers.

CONTACT Tel: 852-2111 2999 Email address: enquiry@primecredit.com Website: www.primecredit.com

Malaysia Retail Bank of the Year - Public bank malaysia

Embracing Innovation

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nnovation and effective execution of business strategies help Public Bank in defending and growing its market share, not only in its lending and deposit taking businesses, but also in its new businesses such as wealth management and bancassurance.

Public Bank’s Competitive Advantage Amidst the highly competitive banking landscape in Malaysia, Public Bank embraces innovation by using modern information and communication technology (ICT) as a strategic tool to innovate new products and services, new delivery channels, new processes, and improve delivery standards to meet demands from discerning customers.

Public Bank uses modern ICT to provide high value propositions and enhance customer experience to sustain its competitive advantage. Public Bank is focusing not only on investment in modern ICT, but also on investment in human capital and talent development and retention. Looking forward, the capacity to innovate will remain a major Tan Sri Dato’ Sri Dr Teh Hong Piow, Founder and Chairman of Public Bank main bancassurance provider in Malaysia and services has become shorter than ever competitive advantage for Public Bank.

In its lending business, Public Bank has and the Asia-Pacific. Jointly with ING In- due to increased industry-wide innovation two flagship products, namely the 5HOME surance, Public Bank enters into a family capability and competition,” says Tan Sri Plan for home mortgages and the SWIFT takaful business this year. In addition, Pub- Dato’ Sri Dr Teh Hong Piow, Founder and Plan for small- and medium-sized busi- lic Bank provides a wide range of remittance Chairman of Public Bank.

To cope, the Bank was constantly on its nesses to expand their operations. The services and cash and channel management 5Home Plan is highly popular as it makes services. Public Bank has also introduced its toes by taking pre-emptive steps to be at home ownership in Malaysia easy by pro- mobile banking channel, in addition to its the front curve of competition. The steps established Internet banking included providing the broad range of viding a wide range of home channel and wide distribution high quality products and services to the financing packages, depend“Public Bank is customer in the most efficient, timely and of self-service terminals. ing on customer needs. The The Bank’s electronic Loan cost-effective manner. Efforts to sustain SWIFT Plan offers small- and focusing not only on Delivery System has been im- the Bank’s superior customer service (such medium-sized enterprises a investment in modproved to incorporate higher as the Bank’s 2-minute Standard Waiting combination of asset financing ern ICT but also on with working capital financing investment in human levels of straight-through- Time) across all domestic branches were capital and talent processing for faster loan ap- unabated. The Bank listened closely to its and trade lines. In its depositdevelopment.” proval turnaround time. Cus- staff and customers through focus groups taking business, Public Bank tomers can straight away apply for new ideas to get relevant insight and offers a wide range of ringgit saving products plus structured investment for various types of insurance products and business feedback from them. Customer products, Gold Investment Account and credit cards when they submit their appli- needs analyses and customer satisfaction foreign currency deposits, including New cations for home loans. To speed up loan surveys through “mystery shoppers” have Zealand Dollar, Australian Dollar and Chi- applications, the Group’s marketing staff is formed part of the Bank’s efforts to drive nese Renminbi deposits to provide greater equipped with portable biometrics readers customer segment strategies. Public Bank choices to the customer. Public Bank was to authenticate customer identity outside has developed a pool of dedicated staff to the first bank in Malaysia to allow account banking hours and at customers’ premises. champion product and service innovation. holders of Gold Investment Account to per- However, there were challenges in the imform online gold trading via the Bank’s web plementation. “The key challenge was to CONTACT meet increased customer expectations and portal.

Dato’ Chang Kat Kiam ensure speed-to-market of new products Chief Operating Officer and services, amidst the highly competitive Strategies for Superior Customer Service Tel: 03-2163 9797 Public Bank has entered into a 10-year stra- banking landscape in Malaysia. FurtherEmail: changkk@publicbank.com.my tegic alliance with ING Insurance to be a more, product cycle for banking products 28 ASIAN BANKING AND FINANCE | SEPTEMBER 2011

vietnam retail bank of the year - techcom bank

TECHCOMBANK: Roaring Success

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ietnam Technological and Commercial Joint Stock Bank, commonly known as Techcombank, is one of the largest and fastest growing commercial banks in Vietnam. Since its inception in 1993, the bank has demonstrated strong growth over the years, consistently exceeding 30% in both total assets and annual turnover. Its total assets in 2010 are almost 14 times of those in 2005, while the profits before tax have increased almost tenfold in the same period.

Strategic collaborations In 2006, Techcombank became the first Vietnamese bank to form a strategic partnership with HSBC. As a result, HSBC’s banking knowledge and best practices were transferred to Techcombank, especially in the risk management and retail banking area. In 2009, Techcombank’s collaboration with McKinsey brought strategic and technical support in the fields of management and development Nguyen Duc Vinh, CEO, Techcombank strategy.

The support from McKinsey helped Retail Banking and Risk Management the bank to refine its focus on both SME Retail banking in Vietnam is quite a new segment but Techcombank has developed banking and retail banking.

By the end of June 2011, total assets of a comprehensive strategy to target it. “The Techcombank reached over VND 176,822 market is still young with only traditional billion. Today, with an extensive network financial needs but we are set to provide a spanning nearly 300 branches/TSO and range of diversified to the latest products 1,091 ATMs; and a strong workforce of ranging from a very traditional one to latest technology-related products 7,337 professionally trained like internet banking. It can be staff, Techcombank is wellsaid that we are ahead of the placed to serve more than “We concentrate market and most of our com60,000 enterprises and 2 milour resources in petitors ,” he underlines. lion individual customers all developing the two Risk management is another over the country. main strategies of key area that the bank has bol“In order to achieve our asSME baking and stered in the last two years. A piration of becoming the best retail banking.” new Credit Oversight Unit bank and the leading busiand an appraisal office were ness in Vietnam, we concentrate our resources in developing the two established in order to enhance debt qualmain strategies of SME banking and retail ity management capabilities and consolidate banking,” says Techcombank Vietnam debt management into principal customer groups: corporate clients, retail customers CEO Nguyen Duc Vinh.

SME banking forms the most important and institutional finance clients. The ensection of the economy. Techcombank re- hancement of the comprehensive risk manalised that it’s also one of the monitors of agement framework helped us reduce the Vietnamese economic growth in the up- ratio of non-performing loan to 2.29% as of 31 December 2010. coming years.

With active support from its strategic partTechcombank created a specialised transaction banking unit to offer SMEs ners, HSBC and Mc Kinsey, the years 2009 products such as the supply channel, fi- and 2010 saw the bank complete the first nancial trade as well as technology-related phase of TechcomOne – a 5 year transformation program, in which it vigorously transproducts like internet banking.

30 ASIAN BANKING AND FINANCE | SEPTEMBER 2011

formed and restructured all functional units towards specialisation based on a modern global bank model. The most remarkable was the creation of a specialised Sales and Distribution Division independent of business and support functions. This allowed Techcombank to respond more effectively to the banking needs of each customer segment. “In 2009 and 2010, we also mobilised every resource to strengthen our foundations in order to consolidate on the course of transforming Techcombank into a modern and professional bank, including strategy, organisation structure, human resources, risk management, technology, and sales and distribution (Branch network). In terms of human resources, we implemented a number of initiatives to realise the mission of “creating the best environment for employees”. This resulted in a 38% increase in our workforce, bringing the total number of employees to 6,960 by end of 2010. “With the constant increase in the workforce, Techcombank aims to further leverage on staff capabilities and professionalism as key factors for rapid and sustainable growth,” Duc Vinh says.

CONTACT TECHCOMBANK Tel: +84(4) 39446368 Email: AssistanttoCEO@techcombank.com.vn Website: www.techcombank.com.vn

Strong Breakthrough

www.techcombank.com.vn

VIETNAM TECHNOLOGICAL AND COMMERCIAL JOINT STOCK BANK 70-72 Ba Trieu Street, Hoan Kiem District, Hanoi, Vietnam Tel: +84(4) 39446368 Fax: +84(4) 39446362

best asean sme bank - OCBC Bank Singapore

OCBC: Banking through sickness and health

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ou may have a great proposition and a superb business model, good knowledge of the market, the product or service that you wish to deliver may be excellent, yet the blood that will keep your business alive and breathing till the end is the cash flow. Sound financing is important to the entrepreneur or SME who is looking at scaling up their businesses profitably and sustainably. This is when a bank like OCBC can be your partner to help you achieve your goals. “We focus on serving SMEs across the full life cycle, including the early-stages, which many banks have tended to neglect,” says OCBC Bank Executive Vice President and Global Head for Enterprise Banking and Financial Institutions Linus Goh. Goh underlines that SMEs today are no longer bound to the geographical limits of Singapore. They could be Singapore companies who have chosen to grow by venturing overseas, but they could also be overseas companies who use Singapore as a platform to access the region. Many second or thirdgeneration SME owners are also revamping Mr Linus Goh, Executive VP and Global Head, Enterprise Banking & Financial Institutions, OCBC Bank their business models to internationalise the limited capital may have not been opti- understands that SME owners are proud of mal. So from our perspective, many SMEs their business achievements and they would their operations.

The trends today are dynamism and con- have this fear that they will run out of cash to like to be respected and recognised for their tinued growth. OCBC works strategically do the business. They feel they have a good success. Hence, the Bank introduced the with SMEs to help them achieve the differ- model and have won customers over, but are OCBC Business Card in November 2010. ent milestones in their business life cycle by not able to push it on to the next milestone This is the first customisable platinum debit partnering them at a young age and growing because of not having the right level of sup- Mastercard that gives business owners the option of having their company logos and with them. “We serve one in two businesses port—financial or otherwise.” corporate titles imprinted on their cards. in the early stage of their life, SMEs as the focus of OCBC’s This unique feature will help SMEs build the and that enables us to get in ear“OCBC works companies’ brand recognition and brand services ly and understand their aspirastrategically with In fact, the SME business is at equity as well. tions and plans, and we play the In addition, OCBC is also the main sponrole as an advisor. We have had SMEs to help them the core of OCBC’s focus, Goh achieve the points out. OCBC’s portfolio sor for four top awards programmes that the privilege of partnering with different reflects that many companies give recognition to the SME owner as he many young businesses to see it is easy to be tempted to over milestones in their have been with the bank for 20- grows his business through the different expand, venture into too many business life cycle.” 30 years. “We have been able to stages of the business life cycle. These inwork with them through these clude the Emerging Enterprise Award that is markets or over extend oneself years. It’s about helping them get started tailored for small businesses, the Enterprise in terms of investments,” Goh cautions.

Of course, there are specific milestones to and knowing how to anticipate their needs 50 (E50) Awards that is targeted at local reach as you start off, but across the whole as they expand -- when they need trade or and privately-owned enterprises, the Busilife cycle, the fear is that if you have made foreign exchange facilities, when they need ness China Awards which give recognition it to one milestone, how would you get the to finance their commercial property or ex- to global enterprises, and the Entrepreneur support to make it to the next? How do pand overseas, when they need to engage of the Year Award that pays tribute to outyou ensure that you minimise the risk of different forms of financing, even leverag- standing entrepreneurs. failure? “There are so many businesses that ing on the government schemes and how thrive in the early end of the process and we help them avail all of these things,” Goh then struggle later. Often, it is not because shares.

CONTACT OCBC’s support to the SMEs goes beyond the business idea or the business model isn’t Tel: (65) 6538 1111 good enough. Very often, it has to do with financial help. The bank also believes in givEmail: bbcsc-bizinteract@ocbc.com the fact that maybe the cash flow needed to ing recognition to SMEs. Having spent years Website: www.ocbc.com/sme-banking/ run the operation or the way to apportion on the ground with their customers, OCBC 32 ASIAN BANKING AND FINANCE | SEPTEMBER 2011

best online banking / securities in singapore - ocbc securities

OCBC Securities: Smarter trading on the go

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CBC Securities Private Limited (“OCBC Securities”) is a whollyowned subsidiary of OCBC Bank and member of the Singapore Exchange Securities Trading Limited (SGX-ST) and the Singapore Exchange Derivatives Trading Limited (SGX-DT). Having been in the business for more than 20 years, it has grown to become one of the leading stock and futures broking firms in Singapore, providing full brokerage services for equities and derivatives trading. It employs state-of-the-art technology to deliver speedy multi-market electronic execution of trades for investors. Investors can leverage on our extensive Direct Market Access (DMA) trading platform to access multiple markets in one single account.

Breaking the traditional online trading One of the key thrusts of OCBC Securities has been focused on bridging the gaps of traditional online trading to provide investors with more investment options to capture market opportunities with speed, Capture market opportunities on the go convenience and accessibility. The key as- nitely a demand for more features and a pect found lacking in traditional browser- more intuitive trading portal.

With the proliferation of more affordbased online trading is that it typically able smart phones and lower-priced data confines investors to their work stations.

At this current condition, where time plans, coupled with Singapore’s continued is of great value and individuals need to push to extend broadband access to pubconstantly commute from one place to an- lic places through its Wireless@SG initiaother, it is increasingly becoming impor- tive, we anticipate that more investors will use this channel to trade,” tant that we deliver a product says OCBC Securities Manor service that reflects and aging Director Ho Yew Ping. complements the demands “We feel iOCBC and lifestyles of today’s investors. iOCBC TradeMobile TradeMobile will give iOCBC TradeMobile proves investors greater its worth comes with a solution that alcontrol over their As global markets continue lows investors to keep abreast investments.” to evolve, investors are preof market situations, monitor sented with different investand manage their investments ment opportunities across on the go. The applicationbased platform also provides more room countries and markets. “Since launching for intuitively, a smarter and sleeker in- our direct market access network to 9 key terface and a no frills, hassle-free trading exchanges, we have seen our monthly experience. Investors can also be assured trade value to these key securities exthat their trades are executed in a timely changes rise. As a result, we feel iOCBC TradeMobile will give investors greater and secured manner.

“When we first launched the browser- control over their investments since they based mobile trading service more than can now effectively capture market opthree years ago, investors could only trade portunities on the go, as long as they have direct on the Singapore Exchange, and we their mobile devices,” Mr Hui Yew Ping saw the usage grow steadily by about 15% shares.

First introduced on the iPhone plateach year. We obtained feedback from our customers on how we can improve form, iOCBC TradeMobile has evolved this service and found that there is defi- and gone through several additions and

enhancements. Today, the application is available across a comprehensive suite of mobile platforms such as the iPad, BlackBerry, Android, and Java-enabled mobile devices. At the recent OCBC Securities Global Investors Forum, iOCBC TradeMobile was showcased across various platforms that cater to the different lifestyle and mobile preferences of investors. More than 1000 attendees, including world renowned guest speakers, were first hand witnesses to the event.

Striving for greater heights iOCBC TradeMobile has once again reached another significant milestone in winning this award. Mr Hui Yew Ping added, “It is a firm testament to our strategy and effort continuing to innovate and differentiate our product and services to not only achieve quality delivery to our customers but also to position us to continue scaling new heights as the leading brokerage regionally.”

CONTACT Tel: 1800 338 8688 (Local Toll Free Number) (65) 6338 8688 (From Overseas) (02) 6338 8688 (From Malaysia) Email address: iocbc_enquiry@ocbcsec.com Website: www.iocbc.com

ASIAN BANKING AND FINANCE | SEPTEMBER 2011 33

Last word Alicia Garcia Herrero

China’s financial sector and the new 5-year plans: What are the implications?

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s with its predecessor, the new 5-year Development Plan attaches importance to continuing financial sector reform in four main areas: (i) strengthening financial institutions, (ii) development of financial markets, (iii) improvements to monetary policy instruments, and (iv) enhancement of the supervisory framework. However, this 12th 5-Year Plan remains disappointingly general as it lacks important specifics such as the role of foreign investors and a clear chronogram for financial reform.

In any event, the Plan appears to introduce two major breakthroughs in financial reforms.

The first is interest rate liberalization, which is clearly stated in the plan. The second is capital account liberalization, although one really needs some goodwill from the part of the reader to understand that it will be happening based on the wording of the Plan.

On Interest Rate Liberalization Regarding interest rate liberalization, the key and more urgent change is to free the ceiling on the deposit rate. Currently, the PBoC maintains

“...the plan appears to introduce two major breakthroughs in financial reforms. The first is interest rate liberalization, which is clearly stated in the plan. The second is capital account liberalization...” a ceiling on deposit rates for all tenors and a floor on lending rates expressed as a fraction of 0.9 of the benchmark rate (in 2004 the ceiling on lending rates was removed). It is anticipated that the deposit rate will be allowed to fluctuate first, which will imply an upward movement as banks compete among themselves for funds. As for the lending rate, while competition should already exist today (there is 34 ASIAN BANKING AND FINANCE | SEPTEMBER 2011

actually no ceiling for lending), evidence shows that bank borrowers are generally charged the minimum lending rate. If that minimum lending rate were to disappear after the deposit rate is liberalized - which should be the logical order to follow - price competition would increase, probably resulting in a decline in real interest rates. Finally, a precondition for a successful freeing of the deposit rate is to reduce the liquidity in the system so that banks have an interest in bidding up the interest rate to attract depositors.

The introduction of interest rate liberalization will probably have major implications for the financial sector landscape due to an increase in competition and the related decline in margins and, thereby, in profitability. However, the Plan should also create new business opportunities in the financial sector based on the extension of banking services to the household and SME sectors. The former implies a much bigger role for retail banking, especially in consumer finance and wealth management. The increasing number of businesses related to serving households and SMEs while allowing for more competition should, in principle constitute an important opportunity for foreign banks but, again, their role is not clearly stated in the Plan, which raises doubts about the authorities’ intentions.

On Capital Account Liberalization Finally, as regards the second key reform, namely capital account liberalization, the path outlined in the 5-Year Plan is even less clear on paper. However, the progress made with the internationalization of the RMB (both in terms of trade settlements in RMB and bond issuance in RMB) concentrates on the off-shore markets and tends to forget the onshore one, which does not seem like a sustainable model. This is why there does not seem to be any other option other than pushing for the internationalization of the RMB market as well.

Alicia García Herrero is the Chief Economist for Emerging Markets at Banco Bilbao Vizcaya Argentaria (BBVA)