In May, FinanceAsia named the winners of its annual Country Awards for Achievement. Last month, winners were given ther awards at our annual awards dinner in Hong Kong. Today, we continue presenting the rationale for our decisions with a look at the Hong Kong market where, domestically at least, there's still only one winner. This excludes Chinese financial institutions, whose write-ups will follow tomorrow.
Best Bank, Best Investment Bank, Best DCM House, Best ECM House, Best Broker, Best Private Bank: HSBC
HSBC’s global trade and receivables finance business in Hong Kong conducted more than $120 billion-worth of transactions in 2016. This helped HSBC to maintain its position as Hong Kong’s leading provider of trade finance with a 12.7% share, according to HKMA statistics as of January.
The bank also saw significant growth in its receivables finance business, according to 2015 data published by Factors Chain International.
Across its global banking and markets division HSBC continued to score wins in Hong Kong.
It dominated debt capital markets league tables for G3 book runners mandated by Greater China and Hong Kong issuers. It has also led the field in Hong Kong dollar bonds since 1995, and that didn’t change in the review period.
Among the Hong Kong debt deals that HSBC advised on was Li & Fung’s $650 million perpetual non-call five hybrid. The deal marked Li & Fung’s fourth consecutive US dollar bond issuance with HSBC. HSBC also worked on Road King Infrastructure’s $300 million perpetual non-call five hybrid securities; the first fixed for life perpetual hybrid from a high yield issuer in the public market.
HSBC has led all of the US dollar sukuk offerings issued by the Government of Hong Kong so far – including its latest $1 billion 10-year sukuk offering. Based on a 10-year Wakalah structure, this extension in tenor builds out their yield curve and also allowed Hong Kong to become the first triple A government to issue a sukuk with a 10-year tenor.
HSBC also raised more than $14 billion for clients via Hong Kong’s equity capital market. It acted as joint global coordinator and joint book runner for the $7.6 billion IPO of Postal Savings Bank of China and as joint global coordinator and joint book runner on the $2.1 billion IPO of Guotai Junan.
In terms of M&A, HSBC was the sole financial adviser on China Overseas Land & Investment’s $4.8 billion acquisition of CITIC Group’s property portfolio. It was also the sole financial adviser on New World Development’s $2.6 billion voluntary conditional cash offer to privatise New World China Land.
In retail banking and wealth management, HSBC continued to invest in digital and mobile channels and was among the first banks during the year to offer Apple Pay and Android Pay.
Meanwhile, HSBC’s brokerage operations in Hong Kong continued to provide strong levels of service for its retail, private banking, corporate, prime brokerage and institutional investors. Cash-equities clients in 2016 were given extensive access to company managers through more than 400 roadshows, 250 investor trips, 15 conferences, and over 100 events. HSBC also offers a wide range of tradable warrants and callable bull/bear contracts with over 1,500 products issued every year and executes on average 33,000 trades a day via the Hong Kong stock exchange.
In addition, HSBC’s private banking arm continued to help HNWIs and their families to grow, manage, and preserve their wealth. Private banking Hong Kong contributed pre-tax profits of $108 billion, around 36% of HSBC’s reported global client assets.
Best International Bank: Citi
With a workforce of over 4,000 employees, Citi is the largest foreign bank employer in Hong Kong. Across the awards period it continued to grow strongly by helping clients to raise capital and providing a range of cash management, trade, securities and fund services.
In retail banking, Citibank Hong Kong was the first bank in Hong Kong to launch voice biometrics authentication, improving the phone-banking experience of clients by quickening the verification process and reducing the reliance on PINs. The resulting efficiency gains shortened the average handling time of phone centre agents to 35 seconds.
In investment banking, Citi advised on the sale of Dah Sing’s life insurance subsidiaries and on the financing of CR Beer’s acquisition of 49% of CR Snow.
In debt capital markets, it helped CK Hutchison with a $1.25 billion and €1 billion ($1.12 billion) offering. It was at the time the largest issuance from a Hong Kong issuer, with the lowest-ever euro spread and yield the company had ever achieved. Since the launch of Stock Connect in 2014, Citi has also provided investors with end-to-end exchange traded funds, cash renminbi, custody, and fund solutions.
Best International Investment Bank: Goldman Sachs
Goldman Sachs was sell-side advisor for several Hong Kong companies during the awards period and helped them to achieve high prices for their assets.
Goldman advised on the sale of Hong Kong Life Insurance to First Origin International for $915 million. It helped its client achieve a high premium valuation relative to other comparable transactions, with an implied latest price-to-book multiple of 8.95 times.
Goldman was also the exclusive sell-side advisor for the sale of Wharf T&T to MBK Partners and TPG Capital for $1.2 billion. After a competitive auction the company was sold a comparatively high enterprise value of 12.2 times its 2015 Ebitda.
In the sale of Tricor by Bank of East Asia and NWS, Goldman sold the company to Permira for $835 million. The deal is the third transaction Goldman has executed for BEA in the last 18 months.
Away from M&A, Goldman worked on China Resources Pharmaceutical’s $1.9 billion IPO, the largest healthcare IPO in Hong Kong since 2011. Goldman secured demand from high-quality cornerstone investors early on, including Hengjian, Fujifilm and Anbang. It brought in $496 million, or 54%, of the total demand from cornerstone investors.
In terms of innovative deals, Goldman advised on MTR’s $600 million 10-year Reg S green bond offering. The issuer achieved the tightest 10-year spread year-to-date by a Greater China issuer.