In May, FinanceAsia named the winners of its annual Country Awards for Achievement. In June, we'll present the awards at our annual awards dinner in Hong Kong.
Today, we continue with the winners from Hong Kong.
BEST BANK: ICBC ASIA
Industrial and Commercial Bank of China Asia (ICBC Asia) is a licensed bank incorporated in Hong Kong and a core subsidiary of ICBC, one of mainland China’s largest commercial banks by assets. That is the key to its strength.
ICBC Asia has a shared brand identity with its parent and plays an important role for the group in providing offshore financing to its large corporate clients. In Hong Kong, its market share edged higher in 2017 to 4% of assets and 4.8% of loans, based on data from the company and the Hong Kong Monetary Authority.
ICBC Asia seems a well-disciplined outfit. Its cost-to-income ratio for 2017 was pegged at 23.3%, which is far lower than most of its peers, according to data provider S&P Global’s analytics, with CCB Asia and China Citic Bank International both above 40% and Bank of China Hong Kong on 28.1%.
Its impaired and delinquent loans ratio at the end of last year was also low at 0.84% and below many of its comparables, S&P Global’s data shows.
That is particularly commendable seeing as the mainland Chinese exposure of foreign banks – led by Hong Kong-based institutions – reached a record high in 2017 amid rising risk appetite, according to a ratings agency Fitch report in June.
Tighter onshore liquidity conditions in China are likely to continue to encourage more offshore borrowing in 2018, while trade growth and the continued integration of the Hong Kong and Chinese banking systems will support a rise in foreign bank assets in mainland China over the longer term, Fitch said.
ICBC Asia’s total assets hit HK$898 billion (US$85 billion) as of December 31, 2017, up 12.5% on a year earlier. Net income also grew by 5% in 2017 to HK$7.8 billion.
To help its mainland Chinese clients participate more effectively in the government’s Belt and Road Initiative it hired Andrew Lee from Mizuho last year as a director working on structured finance, project finance and acquisition finance, with an emphasis on the power, utilities, TMT, and consumer sectors. ICBC Asia has also set up an Asia-Pacific syndicated loan centre to connect head office, mainland branches and affiliates across the region.
ICBC Asia has 57 retail branches in Hong Kong, including 28 wealth management centres it calls ‘Elite Clubs’, and three commercial business centres.
BEST INVESTMENT BANK, BEST BROKER: CLSA
CLSA in 2017 fully leveraged its relationship through Citic Securities and Citic Group to work on some of the largest corporate finance and capital markets deals in China and internationally.
In the M&A category it advised on five deals, including acting as exclusive buy-side advisor on Shenzhen Investment Holdings Co.’s $1.89 billion acquisition of Hopewell Highway Infrastructure in January 2018. CLSA was able to provide SIHC with a one-stop acquisition solution, securing a debt facility from the Treasury department of Citic Securities and China Merchants bank. It also acted as financial advisor and lead loan arranger to Jinglong Group for its $362 million privatisation of JA Solar from NASDAQ, arranging syndicated financing and placing 50% to external investors via fixed income, currencies and commodity client sales.
In equity capital markets, CLSA raised $13.54 billion as the number two bookrunner across 73 transactions in China during the review period. It acted as joint sponsor, joint global coordinator, joint bookrunner and joint lead manager on Zhongyuan Bank’s $1.2 billion H-share IPO. The successful coordination of both onshore and offshore teams helped CLSA to advise the client on listing procedures and ensured a successful flotation even though the client could not meet the exchange’s three-year track record requirement.
CLSA acted as joint bookrunner and joint lead manager for Postal Savings Bank of China’s $7.25 billion US dollar bond, the largest AT1 offering in Asia ex Japan and the largest single-tranche US dollar bond in Asia.
CLSA was also joint global coordinator, joint bookrunner and joint lead manager on the heavily subscribed $3.4 billion senior multi-tranche issue of unsecured US dollar/Singapore dollar bonds by China Huarong. This deal included the largest 30-year US dollar bond sold by a Chinese financial services provider to date, further solidifying CLSA’s reputation in debt capital markets.
BEST DCM HOUSE: BANK OF CHINA
Bank of China took top spot this year with 216 offshore China deals and 247 Asia ex-Japan G3 currency bond deals, worth nearly $38.7 billion combined. This includes the simultaneous issue by four international branches of a second series of Silk Road Bonds denominated in four currencies in April 2017.
In addition, Bank of China was joint lead manager and bookrunner for the first Chinese sovereign US dollar bond sale since 2004. The dual-tranche offering comprised a $1 billion five-year tenor priced at 2.196% (or 15 basis points over comparable US Treasuries) and was 11 times oversubscribed and a $1 billion 10-year tenor at 2.687% (UST+25bps).
In October it was the joint global coordinator on Haier Group’s $1 billion offshore unrated Senior Unsecured Perpetual Bond, the largest by a Chinese corporation, which was three times oversubscribed. Three months earlier, also acting as joint global coordinator, it completed the largest euro-denominated green bond issued by a Chinese corporation. In the face of strong demand, the Three Gorges €650 million seven-year bond saw pricing tighten by 17bps.
BEST ECM HOUSE: HAITONG INTERNATIONAL
For the third year in a row, Haitong International once again takes the prize.
In equity capital markets it was the number one-ranked Chinese institution in Hong Kong and number four overall for the review period, Bloomberg data shows.
Traditionally strong in initial public offerings, Haitong once again led the pack with 15 deals. Acting as joint sponsor, global coordinator, bookrunner and lead manager for Shandong International Trust’s $380 million IPO, Haitong’s increasingly international distribution network showed through. Arranging roadshows in Hong Kong, Singapore and London for its client, it was able to secure two cornerstone investors from China plus an order from Legal & General in the UK during difficult market conditions in Hong Kong, with several large TMT offerings coming to market during the bookbuilding period.
In other ECM offerings, Yuzhou Properties’ $205 million top-up placement drew orders from leading international institutional investors such as Blackrock, Indus Capital and Trafalgar Capital, underlining Haitong’s growing international credentials. Haitong acted as joint placement agent for the deal.
What’s more, Haitong successfully executed two IPOs in India and one in Singapore during the review period. Most notably it was the lead bookrunner on HDFC Life’s $1.34 billion listing – the largest IPO by a privately owned Indian company since 2007.
BEST PRIVATE BANK: CHINA MERCHANT BANK
Asia’s private banks, excluding onshore ones in China, broke through the $2 trillion barrier for the first time last year, according to Asian Private Banker. Backed by its mainland parent, China Merchant Bank saw its assets under management grow by 29% year-on-year in 2017, with an estimated $39 billion under management by the end of March.
Operating in Hong Kong across three platforms, including Wing Lung Bank, CMBI, and the Hong Kong branch of its parent, China Merchant Bank offers clients two private banking centres and two private wealth management centres in the territory.
As the business has expanded, so its headcount has too, with about 170 relationship managers by the end of last year.
Expanding beyond the core financial needs of its clients China Merchant Bank has also sought to differentiate itself from its peers by inviting clients to learn about impact investing, high-end real estate advisory services, and health forums. These initiatives, together with a forum it organised on succession planning, all contributed to it winning the award this year.