In 1998-99 Lippo Bank, Indonesia’s fifth largest private commercial bank became deeply distressed in the financial crisis and ensuing regional economic collapse. In late 1999 Financial Access’s predecessor company within ING was mandated as overall banking adviser in a three-year agreement to provide management and technical assistance to the bank, an arrangement which was subsequently extended several times. A Supervisory Board member (also Chairman of the Audit Committee) and the bank’s CEO were both seconded to Lippo, and management was supported by 15 full time staff including 12 expatriates on-site in Jakarta. The results were remarkable. In 2002 Lippo Bank was named “Best Retail Bank in Indonesia” by The Asian Banker, non-performing loans (“NPLs”) were reduced from 46% in 1999 to under 10% by end-2001 while the bank’s funding cost became the envy of the Indonesian banking sector, and underlying profitability materially improved. The branch and ATM network were redesigned and substantially expanded in the process. Equity analysts from such firms as Merrill Lynch, CLSA and ABN-AMRO attributed much of the bank’s revival to the advisory team’s influence. ING subsequently advised on a successful sale of the remaining Indonesian Government stake in Lippo to an investment consortium in 2004, who on-sold the bank to the Malaysian state investment company Kazanah at a substantial mark-up 15 months later.

Poor efficiency, a lack of product management and a ‘state bank mentality’ left Chang Hwa Bank in Taiwan ill-prepared for a move into fee-based banking and a wealth management-centered retail market in 2002. Moreover, there were a growing number of delinquent accounts in Taiwan’s post-crisis economic slowdown which had resulted in a 15% reported impaired loan (NPL) ratio. After deploying 12 full-time staff on-site, including 8 expats and substantial oversight and involvement from managers in Amsterdam, Chang Hwa Bank reduced its bad loans from 15% to 8.8%, accelerated the process of centralised processing and branch redesign and introduced a new streamlined and more effective organisational structure for the Head Office and new regional centres. After a sustained restructuring effort over 3 years, Chang Hwa Bank subsequently was able to attract serious interest from strategic investors.

Bank Danamon, Indonesia’s third largest private commercial bank became deeply distressed during the 1998-9 regional financial crisis. 99% of the bank was acquired by the Indonesian government and was merged with 6 other failed banks. Disarray subsequent to this 7 way merger exacerbated existing problems. The predecessor to Financial Access was mandated to conduct a strategic review and implementation of the back office and processing revamp. A tight focus was set on supporting the bank’s existing retail deposit base and transition to consumer lending. Both procedures and policies and IT were critical parts of the change management programme. Our knowledge of international retail banking best practice was applied carefully by deploying 5 staff, including 3 on-site in Jakarta, to local context to add value and help stabilise the bank. The returns were excellent. The controlling stake was successfully sold to a Temasek-led consortium (Singapore Government) at a premium price. The public float was expanded four-fold on increased investor demand. Both net profit and return on equity increased substantially.