This year we decided to establish an award for Best Asian Bank; and reveal it on the night of our inaugural Country Awards Dinner held in Singapore on Friday September 2. Our process began by shortlisting the Best Banks from each country by selecting the winners from our 2005 Country Awards. This constituted nine banks: Bank of Communications, Bank Danamon, BPI, Chinatrust, DBS, HDFC Bank, Public Bank, Shinhan Bank, and Siam Commercial Bank. Hong Kong's winner, HSBC was not shortlisted on the basis that it is a global bank based in London and could not be fairly compared on a like-for-like basis with the other Asian banks.
We then ranked the nine banks by a series of metrics and also by their scores in Standard & Poor's Bank Fundamental Strength Ratings.
The 12 metrics we looked at were: Return on Equity, Return on Assets, Profit per Employee, Total Profit, Total Assets, Percentage of Net Income derived from Fee Income, Growth Rate (year-on-year), Market Capitalization, Price to Book Value, Net NPL Ratio, Net Interest Margin, and Market Share of Bank Deposits held. The best-ranked in each category would get 9 points and the lowest-ranked would get 1 point. This created a composite score that made up 75% of the bank's total score.
The other 25% was derived from using S&P's Bank Fundamental Strength Rating. This measure looks at the fundamental strength of banks and grades them in nine notches from 'A' through to 'E'. Accordingly, we scored our nine banks based on a respective score of 1-9 depending on which notch they received - ie a 'B+' would receive 8 points, an 'E' only 1 point. In the case of two banks that were not already covered by S&P's BFSR rating, we asked S&P to derive their BSFR ratings for us exclusively for the basis of this award.
The weighted scores were then added together and the convincing winner was Singapore's DBS with a score of 89.7. The second placed bank was Korea's Shinhan Bank with a score of 83.6.
We are thus happy to name DBS the winner of our inaugural Best Asian Bank award.
