Biggest Emerging Markets Banks 2015

ANDREW CUNNINGHAM

It is not even close: The 12 largest emerging markets banks in the world are Chinese.

A BIG COUNTRY WITH BIG BANKS

China’s increasing prominence on the world financial stage has been proven yet again: Of the 50 biggest emerging markets banks in this year’s ranking, the top 12 are all Chinese. The biggest of the big is Industrial and Commercial Bank of China, which boasts assets of $3,368 billion. That total also qualifies ICBC as the largest bank in the world—even when compared with developed market financial institutions.

In all, 19 Chinese banks make Global Finance’s list of the 50 biggest emerging markets banks, ranked by 2014 asset size. That’s the same number as last year.

The combined assets of the 19 banks was $20,145 billion, up 13% from 2013. In contrast, the combined assets for non-Chinese banks in the Biggest 50 list declined slightly, down to $6,585 billion.

The biggest emerging markets bank in the world that doesn’t happen to be Chinese is Banco do Brasil, with $481 billion in assets as of the end of 2014. Sberbank of Russia is next, with $448 billion.

There are five new entries on this year’s list: CTBC Bank and Mega International Commercial Bank, both from Taiwan; National Bank of Abu Dhabi; India’s Punjab National Bank; and Malaysia’s Public Bank. The five who fall out of the list are Vnesheconombank and Gazprombank, both of Russia; Taishin Financial Holding, of Taiwan; Standard Bank of South Africa; and Korea Finance Corporation, which is not included because it merged with Korea Development Bank in December. As a result of the tie-up, Korea Development Bank’s assets grew by 60%, moving KDB up 11 places to become the 25th-largest emerging markets bank in the world.

South Korea contributes eight of the world’s 50 largest emerging markets banks, and Taiwan contributes three. When combined with Chinese banks, these three Asian countries contribute 30 of the biggest 50.

Six banks from Brazil make the list, four from India and three from Turkey. Malaysia and Russia each have two banks in the ranking.

BIGGEST EMERGING MARKETS BANKS 201­5
Rank	Bank	Country	Total Assets USD Mln
1	Industrial and Commercial Bank of China	China	3,368,190
2	China Construction Bank	China	2,736,416
3	Agricultural Bank of China	China	2,610,582
4	Bank of China	China	2,492,463
5	China Development Bank	China	1,685,954
6	Bank of Communications	China	1,024,399
7	China Merchants Bank	China	773,301
8	Industrial Bank (China)	China	720,118
9	Shanghai Pudong Development Bank	China	685,721
10	China Citic Bank	China	676,387
11	China Minsheng Bank	China	656,175
12	Agricultural Development Bank of China	China	513,517
13	Banco do Brasil	Brazil	481,299
14	Sberbank	Russia	447,947
15	China Everbright Bank	China	447,297
16	State Bank of India	India	431,391
17	Itaú Unibanco	Brazil	424,463
18	Caixa Econômica Federal	Brazil	400,920
19	Export-Import Bank of China	China	386,953
20	Ping An Bank	China	352,427
21	Banco Bradesco	Brazil	350,373
22	BNDES	Brazil	330,328
23	Hua Xia Bank	China	302,603
24	China Guangfa Bank	China	269,334
25	Korea Development Bank	South Korea	252,231
26	KB Kookmin Bank	South Korea	250,572
27	Bank of Beijing	China	249,132
28	Woori Bank	South Korea	245,754
29	Shinhan Bank	South Korea	232,554
30	VTB Bank	Russia	216,693
31	Industrial Bank of Korea	South Korea	199,910
32	Banco Santander Brasil	Brazil	195,888
33	Bank of Shanghai	China	194,060
34	Nonghyup Financial Group	South Korea	192,531
35	Maybank	Malaysia	183,205
36	Hana Financial Group	South Korea	156,877
37	Bank of Taiwan	Taiwan	146,756
38	Qatar National Bank	Qatar	133,614
39	ICICI Bank	India	131,981
40	Türkiye Is Bankasi	Turkey	118,818
41	Bank of Baroda	India	117,266
42	National Commercial Bank	Saudi Arabia	115,967
43	Ziraat Bankası	Turkey	109,009
44	CTBC Bank	Taiwan	107,839
45	Garanti Bank	Turkey	106,442
46	National Bank of Abu Dhabi	UAE	102,409
47	Korea Exchange Bank	South Korea	102,192
48	Punjab National Bank	India	101,614
49	Mega International Commercial Bank	Taiwan	99,167
50	Public Bank (Malaysia)	Malaysia	98,919

Source for asset figures: Fitch Solutions

Brands and Retailers Should Team Up in Emerging Markets

When companies “share the shelf,” everyone wins.
by Nikhil Bhandare, Pali Tripathi, and Aparajita Kapoor




Illustration by Benoit Tardif




Consumer packaged goods (CPG) companies and retailers are natural allies. They have many of the same objectives — increased sales, cost savings, optimized processes and systems, and happy customers — and already work together in many parts of the world. But in emerging economies, such collaboration has yet to take off. In a recent survey of 500 leading CPG firms and retailers in India, Strategy& and the Federation of Indian Chambers of Commerce and Industry found that although 91 percent of respondents had participated in at least one collaboration initiative, most of these ventures were one-offs rather than sustained relationships. Only 15 to 20 percent of respondents reported that these collaborative projects had met their objectives.

It’s a huge lost opportunity. Across Asia, Latin America, and, increasingly, Africa, sales channels are proliferating, demographics are shifting, and individuals are gaining greater access to online information about companies and their products. These trends have taken their toll on revenue growth and profits. In India, for example, sales growth has leveled off since 2010; operating margins in both the CPG and retail industries are holding steady at best. Working alone, frankly, is not really working.

Collaboration, however, could yield quick wins and short-term benefits — and could ultimately transform the complex and fragmented consumer landscapes of many emerging economies into more sustainable, more efficient business environments. Even limited cases of collaboration between CPG companies and retailers have led to positive, enduring industry-level changes. In 2007, consumer giant Unilever joined forces with Migros, one of Turkey’s largest retailers. Through an in-store survey, the firms learned that shoppers perceived hair conditioner as unnecessary and expensive. Unilever and Migros set up price promotions and reorganized shelf space to put conditioners next to shampoos, encouraging shoppers to view conditioner as an essential companion product. Migros’s overall hair conditioner revenue grew by 25 percent, and Unilever’s by 36 percent.

When collaboration expands to include the automated sharing of point-of-sale (POS) data, the results can be even more dramatic. In 2012, Godrej Consumer Products of India set up electronic data interchange (EDI) interfaces to automate the exchange of such data with retailers. The company reported that revenues earned through these trade channels grew 28 percent during the second half of that year.

Although the benefits may seem obvious, setting up and sustaining these partnerships is difficult in practice. To make the process more manageable, CPG companies and retailers need to create the circumstances that will enable effective collaboration, and to establish robust and transparent systems that allow collaboration to endure. Of course, none of that will matter if both sides cannot see at the outset why they should be open with each other. This is no small matter: Lack of trust was the leading cause reported by our survey respondents of their firms’ avoiding or terminating collaborative initiatives.

That’s why the most significant collaborations are deliberately designed to foster trust, often by tackling daunting challenges — and demonstrating what each side can gain. For example, although retailers typically view e-commerce as a competing channel, it can also boost in-store trade if it’s designed to do so. Consider the “bloggers club” collaboration between Indian electronics retailer Croma and Toronto-based e-book publisher/tablet maker Kobo. This club invites Indian bloggers to post reviews of Croma products and outlets. It is designed to forestall complaints, provide customer support, and promote Croma through contests for Kobo merchandise.

The use of real-time POS data, in particular, can reshape how CPG and retail companies make decisions. A company might use such data to choose where to expand activity, or to manage product availability in a different way so that consumers are more likely to find the products they want in their local community. Better access to data from inventory tracking and demand planning can help remove bottlenecks in the supply chain, direct R&D investment, improve marketing, and maximize supply chain efficiency, all of which work toward increasing profits for both manufacturer and retailer.

Data-driven collaboration often includes sharing insights on market trends and consumer buying behavior. Our survey respondents said such sharing leads to better idea generation involving products and trade promotions, savvier use of e-commerce platforms, and more effective workplace management. The most useful technologies for gathering this data are those that enable direct interaction with consumers: customer relationship management systems, Web 3.0 (which uses natural language search, data mining, and artificial intelligence technologies), online applications such as digital media campaigns, and contests on social networking sites such as Facebook.

Collaboration on demand planning enables CPG firms and retailers to set realistic targets, meet market demand, and minimize stockouts. For example, when one U.K. retailer and a global market leader in oral care initiated a joint business planning pilot several years ago, they took certain steps to foster their relationship. The enterprises’ leadership teams met monthly to discuss short- and long-term opportunities. They reviewed the performance against forecasts, planned the next month’s assignments and developed new forecasts, and agreed on changes such as promotions. The initiative has led to improved delivery rates, increased on-shelf availability, new targeted promotions, better margins, reductions in inventory levels, and streamlined agreement on other collaborative initiatives.

Finally, co-branded advertisements enable CPG firms and retailers to visibly market products together. For instance, Indian e-commerce retailer Flipkart and Motorola recently splashed marketing campaigns across television and print media for the joint launch of the Moto G phone. Collaborative advertising may be extended to include distributors as well: Apple in India co-brands its iPhone advertisements with pan-India distributors Redington and Ingram Micro. By outsourcing its advertising this way, Apple saves on costs and engages more actively with distributors. The distributors in turn benefit from association with Apple’s brand along with the higher margins they can earn on its smartphones.

If your company is considering a collaboration initiative, this may all seem daunting. But if both you and your partner have the right mind-set and process, collaboration can be successful. The foundation of any partnership has to be a shared vision of opportunities and challenges. The CPG company and retailer need to lock in specific agreements and expectations about targets, responsibilities, and accountabilities at the outset. A retailer, for instance, would likely be unwilling to share category-level data with a CPG firm unless the firm promised something in return, such as assistance in optimizing the retailer’s product mix to increase category sales.

Both companies need to find sponsors at the top leadership level. CEO and chairman–level endorsement is a key element, positioning you and your partner company to achieve common strategic goals and establish accountability. Further down the hierarchy, you’ll need to set up cross-functional teams, led by a key account manager. These teams could be organization-specific or cross-organizational, depending on the depth of the collaborative relationship. Members should come from the supply chain, logistics, marketing, and IT functions. If you are pursuing multiple initiatives with a target partner, to avoid ambiguous reporting lines or conflicting commitments, ensure that each initiative has a clear set of owners and a governance body, such as a steering committee or a higher-level council comprising CEOs of the two partners plus key members from both sides.

Wherever possible, set up common processes and technologies, with the goal of seamless integration, the incorporation of mobile devices, and a shared view of data. These can include common IT systems and back-end processes such as robust inventory tracking systems, to streamline the order-flow process and manage distribution information. You may also wish to align other systems such as those dedicated to billing, labeling, and EDI to enable real-time updates, the sharing of financial data, and the cross-management of logistics.

The collaboration can now begin, but the work is far from over. It is critical that both companies be able to track and measure progress as the project unfolds, using key performance indicators established by a joint team. Link them to performance of the joint account team members, so they serve as incentives for variable pay.

You’ll also need to ensure that you have the right talent in place as the partnership activities progress. In India, CPG manufacturing companies such as Coca-Cola, Dabur, Hindustan Unilever, ITC, and Marico have heavily invested in developing programs to help traditional retailers train their employees in specialized skills, such as operating credit card machines, maintaining inventory logs, and creating attractive merchandise displays. The goal is to create a dialogue with traditional stores, which make up 90 percent of India’s retail landscape. Thanks to such initiatives, these CPG companies have reached thousands of traditional retailers throughout the country. Intermediaries such as distributors, systems integrators, and resellers can also play a role in training and overseeing the retail staff. Through its Panasonic Partners program, the electronics company Panasonic introduces intermediaries to new products, business opportunities, and special commercial offers. These intermediaries use that knowledge to push sales independently with retailers, enabling Panasonic to build its channel community.

Finally, remember that trust in your relationship is something you will need to continually maintain. The importance of transparency with your partner company and adherence to agreed-on processes should be clear to everyone involved. Building trust should begin with your own organization’s behavior, not just what you expect from others. In fact, knowing yourself is a critical part of this process. Many companies are tempted to use collaboration to make up for gaps in their own capabilities. In practice, however, the most successful partnerships build on strengths rather than compensating for weaknesses. The best way to view collaboration is as a joint growth opportunity — a chance to develop more distinctive, stronger capabilities together.