Asian bank share of EMEA loans reaches record 18.2%

The share of EMEA syndicated loans from Asian lenders has reached an all time high, signaling the eagerness of these banks to fill up the gaps left by their European counterparts.

  • 07 Sep 2012
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Banks in Asia have been aggressively increasing their presence in the syndicated loan markets of Europe, Middle East and Africa (EMEA), new data shows.

Their share is now at a high of 18.2% of the total syndicated lending in EMEA, compared with 8.3% in the first quarter of 2007, showing strong growth since the global financial crisis, according to data provided by Thomson Reuters LPC.

Asian banks – which benefit from better liquidity – are expected to continue take market share away from European banks.

“Banks from Asia are liquid, well-capitalised and keen to grow their business. EMEA is a market which offers them good opportunities,” declared Atul Sodhi, head of global loan syndication group for Asia Pacific at Crédit Agricole to Asiamoney PLUS in a telephone interview on September 6.

The situation is also driven by the fact that European banks continue to struggle with dollar funding in an environment with lower syndicated loan volume and that demand has been rather sluggish, note experts.

“For European banks they have greater liquidity for euro so they prefer to lend in euro, they don’t have the same liquidity in US dollar and the cost of funds is higher,” said a Hong Kong-based loan syndication banker. “European banks are preparing themselves for Basel III and dealing with the European debt crisis.”

Overall, total EMEA lending declined 31.29% to US$417.4 billion in the first half of 2012 compared to US$607.5 billion during the same period last year.

Japanese banks’ rise

Japanese banks are by far the most active Asian financial institutions in the EMEA region.

“The Japanese banks have a lot of liquidity as well as a lower cost of funds,” said Phil Lipton, head of syndicated finance for Asia Pacific at HSBC to Asiamoney PLUS. “The EMEA market has provided them with the potential growth that they are looking for.”

Bank of Tokyo-Mitsubishi UFG (BTMU) is the highest ranked Asian bank for overall syndicated lending. It is in 16th position in the Thomson Reuters LPC’s EMEA overall mandated lead arranger (MLA) table, with other Asian banks making in-roads in various other league tables.

Royal Bank of Scotland’s (RBS) sale of its EMEA project finance portfolio to BTMU in late 2010 have helped strengthen the Japanese bank’s presence in the European project finance market.

Nomura is currently 6th in the EMEA Leveraged Loan MLA league table and 3rd in the EMEA Leveraged Buyout (LBO) MLA league table, while Sumitomo Mitsui Banking Corp. (SMBC) is 2nd and BTMU 4th in the EMEA Project Finance MLA league table.

Anecdotal evidence also suggests that Chinese and Taiwanese banks are stepping up their lending in the region. However, Chinese banks embark on syndicated loan deals on a selective basis, while Taiwanese financial institutions – which are very liquid in the New Taiwan dollar and US dollar space – are looking for higher yields.

“If there’s a Chinese angle then the Chinese banks are going to be interested. They are particularly interested in natural resources, oil and gas deals in EMEA, Africa, Latin America,” declared a Hong Kong-based loan syndication banker. “Taiwanese banks – they have more of a global appetite and liquidity. They obviously have minimum yield requirement which is higher than it used to be given that cost of funding have gone up.”

The rise in the cost of funds is due to the fact that their cost of dollar funding rose last year, say analysts.

Despite the rise of both Chinese and Taiwanese in the EMEA sphere, the market share of these financial institutions for the region has decline due to the global economic slowdown, and the fact that Chinese government tightened lending in the first half of the year, note experts.

The EMEA loan volume for Chinese and Taiwanese banks has declined from 9.9% to 7.5% and from 3.5% to 2.2% respectively, according to Dealogic data.

Examples of where Asian banks have been active in Europe include Swiss-base Mecuria Energy Group’s a €556.9 million (US$700 million) 1.5-year syndicated loan deal in May in which Mitsubishi was one of the bookrunners.

  • 07 Sep 2012

Bookrunners of International Emerging Market DCM

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 24 Oct 2016
1 Citi 41,733.81 194 9.42%
2 HSBC 40,945.92 235 9.24%
3 JPMorgan 37,214.87 151 8.40%
4 Bank of America Merrill Lynch 29,284.07 123 6.61%
5 Deutsche Bank 20,416.10 78 4.61%

Bookrunners of LatAm Emerging Market DCM

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 18 Oct 2016
1 JPMorgan 13,268.07 33 6.30%
2 Bank of America Merrill Lynch 11,627.56 29 5.52%
3 Citi 11,610.06 30 5.52%
4 HSBC 10,091.34 29 4.79%
5 Santander 9,533.17 25 4.53%

Bookrunners of CEEMEA International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 18 Oct 2016
1 Citi 13,617.40 57 11.05%
2 JPMorgan 12,607.77 55 10.23%
3 HSBC 9,327.72 50 7.57%
4 Barclays 8,643.78 30 7.02%
5 Bank of America Merrill Lynch 6,561.15 18 5.32%

EMEA M&A Revenue

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 02 May 2016
1 JPMorgan 195.08 50 10.55%
2 Goldman Sachs 162.26 37 8.77%
3 Morgan Stanley 141.22 46 7.64%
4 Bank of America Merrill Lynch 114.20 33 6.18%
5 Citi 95.36 35 5.16%

Bookrunners of Central and Eastern Europe: Loans

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 18 Oct 2016
1 UniCredit 3,966.12 27 13.01%
2 SG Corporate & Investment Banking 2,805.90 16 9.20%
3 ING 2,549.27 20 8.36%
4 Citi 2,526.98 15 8.29%
5 HSBC 1,663.71 16 5.46%

Bookrunners of India DCM

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 19 Oct 2016
1 AXIS Bank 5,944.45 123 18.53%
2 HDFC Bank 3,792.05 100 11.82%
3 Trust Investment Advisors 3,390.86 145 10.57%
4 Standard Chartered Bank 2,299.63 31 7.17%
5 ICICI Bank 1,894.86 51 5.91%