Comparison of Banking System & Financial Market of Germany & Philippines

GHULAM HASNAIN

IntroductionGermany Philippines

Population 80.9 Millions 100.69 Millions

Currency: Euro Currency: Peso4th largest economy in the

world by nominal GDP (2015)36th largest economy by nominal

GDP (2016) 3rd largest export economy in

the world41st largest export economy in the

world 

GDP: $3.73 Trillion GDP: $292.451 billion

Global Ranking 4th (GDP) Global Ranking 38th (GDP)

Founding member of the European union

Member of ASEAN

GDP per capital is $48226 GDP per capital income $2899

Banking System

Germany PhilippinesBanking History 450 Years

Since 1590400 yearsSince 1610

Central Bank Bundesbank Bangko Sentral ng Pilippinas

Total Assets $8.06 Trillions $177 Billions

Number of Banks 1804 699

Source : Bundes Bank Source : Bangko sentral ng philipnas

Categories & Number of Banks

ITALY Categories Number of Banks Banks established as SpA 167 Cooperative banks 29 Mutual banks 355 Braches of foreign banks 84 Total 635

Germany

Categories No of Banks

Private Commercial Banks

273

Public Banks 425

Cooperative Banks 1,049

Special banks 57

Total 1804

Philippines

Categories No of Banks

Universal Banks 36

Commercial Banks 71

Thirft Banks 552

Rural & Cooperative Banks

40

Total 699

Source : Bundes BankSource : Bangko sentral ng philipnas

Top Five Banks

GermanyRank

Name Assets (Billions)

1 Deutsche Bank $1778.2

2 Commerzbank $588.93 KfwBankgruppe  $626.55

4 DZ Bank  $427.81

5 HypoVereinsbank $322.63

Total $3.74 Trillions

PhilippinesRan

kName Assets(Billio

ns)1 BDO Unibank Inc. (BDO) $380.8

2 Metrobank $290.2

3 Bank of the Philippine Islands (BPI)

$240.8

4 Land Bank of the Philippines

$240

5 Philippine National Bank (PNB)

$125.79

Total $1.061 Trillions

Source : Bundes Bank Source : Bangko sentral ng philipnas

Shares of Banking Assets

38.00%

29.40%

11.80%

20.40%

German Banking Assets

Private BanksSaving BanksCooperative BanksSmall Pur-pose Banks

Source : Bundes Bank

87.00%

10.00%

3.00%

Philippines Banking Assets

Universal & Commercial BankThrift BankRural & Coopera-tive Bank

Source : Bangko sentral ng philipnas

Philippines Banking System Composition

60.10%24.70%

15.10%

Banking Loan

Corporate SectorAgri SectorConsumer Loan 88.5

9.2 2.3

Banking Industry Deposits

Universal & CommercialThrift BankRural & Coopera-tive Bank

Source : Bangko sentral ng philipnas

Domestic Loan to Corporation in Germany

27.00%

18.40%15.20%

6.70%6.30%

5.20%

2.60%1.80%1.80%

Bank Loans

Saving BanksCredit CooperativesLandesbankenMortgage BankSpecial Purpose BankCommerzbankDeutsche BankHVB GroupPostBank

Source: Bundesbank, company data, Scope ratings

Market Share to Deposit Liabilities of Philippines

88.5

9.22.3

Banking Industry Deposits

Universal & Com-mercialThrift BankRural & Cooperative Bank

Foreign Exchange Reserves Germany Philippines

Forex Exchange Reserves

$173.73 Billions $80.64 Billions

Role of Central Bank

Germany PhilippinesMonetary policy Liquidity Management

Financial and monetary system Currency issue

Banking supervision Lender of last resort.

Cash management Financial Supervision

Payment systems Management of foreign currency reserves

Financial Crisis

Germany PhilippinesFinancial Crisis 1931 Nil

Global Financial Crisis 2007-2008 Global Financial Crisis 2007-2008

Compliance of Basel Accord in Banking System

Germany Philippines

Basel I (Implemented 1992)Minimum Capital Requirement 10%

Basel I (Implemented 2001)Minimum Capital Requirement 12%

Basel 11 (Implemented 2007)Capital Adequacy Ratio 10%

Basel II (Implemented 2010)Capital Adequacy Ratio 17%

Basel III (Implemented 2013)Leverage Ratio 3%

Basel III (Implemented 2015)Leverage Ratio 5%

Islamic Banking

Germany Philippines

Kuveyt Turk AG BankEstablished on 1st July 2015

Al-Amanah Islamic Investment Bank of the Philippines

1st Islamic Bank in GermanyShariah compliant banking

services

1st Islamic Bank in Philippines Established 1973

Owned by Turkish finance group Kuveyt Turk

Owned by Development Bank of the Philippines, in 2008

 

Financial Markets Germany Philippines

Stock Exchange Börse Frankfurt Philippines Stock Exchange

No of Stock Exchange 07 01

Total Market Capitalization

$1.716 Trillions $238.83 Billions

Number of Listed Firms 555 262

Financial Market & Indices & Supervisory AuthorityGermany 1. Frankfurt Stock Exchange 2. Berlin Stock Exchange 3. Dusseldorf Stock Exchange 4. Munich Stock Exchange 5. Stuttgart Stock Exchange 6. Hamburg Stock ExchangeIndices• DAX(30 companies)  •TecDAX •MDAX (Mid Cap)•SDAX (Small Cap)•NSLA (BIG CAP)

Federal Financial Supervisory Authority

 

PhilippinesPhilippines Stock Exchange

Indices:PSE Index (PSEi)Financial Index, Industrial Index, HoldingFirms Index, Property Index, Services Index, Mining & Oil Index, and Small and Medium Enterprises (SME) Index.

Philippines Securities & Exchange Commission

Blue chip companies of GermanyGermany

Rank Company Sector Market Capitalization($ billion)

1 BASF SE Chemicals $88.83 Billions

2 Volkswagen Auto Manufacturing $72.15 Billions3 Siemens Industrial Conglomerates $102.49 Billions4 Henkel & Co Households Products $47.76 Billions5 BMW Auto Manufacturing $60.293 Billions6 Adidas Apparels & Sports Goods $31.877 Billions7 E.ON Multi-Utilities $13.77 Billions8 Allianz Insurance $73.943 Billions9 Deutsche Telekom Telecom $78.151 Billions

10 Linde Chemicals $30.61 Billions

Blue Chip Companies of Philippines Philippines

Rank Company Sectors Market Capitalization($ billion)

1 Ayala Corporation Telecommunications $7.77 Billions

2 Aboitiz Equity Ventures Investment Company $6.16 Billions

3 Alliance Global Group Food and beverage industry $5.977 Billions

4 Ayala Land Real Estate $6.69 Billions

5 Aboitiz Power Corporation Power Generation $5.39 Billions

6 BDO Unibank Inc Banking $6.69 Billions

7 Bank of Philippines Island Banking $7.15 Billions

8 DMCI Holding Inc Real Estate $3.93 Billions

9 Energy Development Power Generation $2.36 Billions

10 Emperador Inc Beverages $3.5 Billions

Ownership structure of listed public limited companies:

11.80%29.40%

18.30%11.10%

57.10%

German Corporate Firms

HouseholdsInstitutional investorsNon-fi nancial investorsFinancial investorsNon-residents

Source: Deutsche Bundesbank

61%12%

9%

18%

Philippines Corporate Firms

HouseholdFinancial InvestorForeigner Institutional Investor

Source : Bangko sentral ng philipnas & SECP

Foreign Direct Investment Germany Philippines

FDI (2015) $46.277 Billions $5.83 Billions

GDP & Per Capital Income

Germany Philippines

GDP GDP: $3.73 Trillion GDP: $292.451 billion

Per Capital Income $48226 $2899

References: https://www.ecb.europa.eu/press/key/date/2016/html/sp160127_1.en.html http://ec.europa.eu/europe2020/pdf/themes/2015/small_medium_enterprises_

access_to_finance_20151126.pdf http://www.savings-banks.com/press/latest-news/Pages/EU-US-financing-comp

anies-study.aspx https://www.statista.com/statistics/273085/total-assets-of-german-banks-since-

2003/ http://banksgermany.com/

https://www.bundesbank.de/Navigation/EN/Home/home_node.html http://www.bsp.gov.ph/about/functions.asp https://www.imf.org/External/NP/seminars/eng/2007/fsa/pdf/s2/9_S2_speaker4b

gp.pdf http://data.worldbank.org/indicator/CM.MKT.LCAP.GD.ZS?locations=PH https://www.bloomberg.com/quote/DTEGY:US

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