Annual Survey | Stars Of China
INVESTMENT BANK (DOMESTIC)
Last year CITIC Securities closed on its acquisition of Hong Kong–based brokerage CLSA Asia-Pacific Markets from Crédit Agricole for $1.25 billion, adding CLSA’s global research capability to CITIC’s impressive Chinese reach. The return of the IPO market this year prompted its fastest earnings growth for any first-half period in the past eight years.
INVESTMENT BANK (FOREIGN)
UBS participation in Chinese deals tapered off since it was disclosed that the bank lent $5.5 billion to a Thai company, Charoen Pokphand Group, to acquire a 15.6% stake in Ping An Insurance in 2012, after a major Chinese bank dropped out. However, UBS still scored the advisory of China National Petroleum’s $5 billion purchase of an oilfield in Kazakhstan. It scored top place for full-year 2013, according to Thomson Reuters, as bookrunner for Asia ex-Japan IPOs.
Mergers and Acquisitions (DOMESTIC)
China International Capital Corp
Although shaken by the recent announcement that Levin Zhu, head of CICC and son of former premier Zhu Rongji, would step down, CICC is not likely to shed its position as the powerhouse M&A mainland investment bank. In 2013 CICC was adviser to the Midea Group merger with parent Midea Holdings and subsequent A-share issuance worth a total of $5 billion, which helped the appliance maker (and former Stars of China winner) become a global player.
Mergers and Acquisitions (Foreign)
The Wall Street investment bank was behind the $4.7 billion takeover of US pork producer, Smithfield Foods by China’s largest pork producer Shuanghui International Holdings, in 2013, the largest Chinese takeover of a US company so far. In October 2014, Morgan Stanley reshuffled its top management, naming James Tam, a leader of the Smithfield deal, co-head of Asia-Pacific M&A along with Richard Wong.
Tianhong Asset Management
Tianhong Asset Management has grown China’s biggest money market fund by assets in less than a year, following the launch of its fund platform, Yu’E Bao, with Alipay in June last year, in affiliation with ecommerce provider Alibaba.
WEALTH MANAGEMENT SERVICES (DOMESTIC)
China Merchants Bank
China Merchants Bank opened its first offshore private banking center in Hong Kong in August, via its local subsidiary Wing Lung Bank. CMB is tracking the spreading wealth of high-end clients on the mainland, managing family trusts and carving out a niche in looking after wealth for the second generation of China’s super-rich.
WEALTH MANAGEMENT SERVICES (FOREIGN)
Earlier this year, Standard Chartered announced that it was selling its Swiss-based private banking unit to focus on its private banking activities in Asia, where it is a major leader in markets like Hong Kong and China. Richard Pattle, head of Standard Chartered’s ultra-high-net-worth division in London, was appointed to head Asia in October this year, underscoring the bank’s intensified focus on China.
RURAL FINANCE (DOMESTIC)
China Construction Bank
Three years ago, China Construction Bank and Spain’s Banco Santander joined forces to provide banking services outside China’s major cities. The venture specializes in investing and managing village and town banks. The move has placed CCB at the forefront of the nation’s countryside lending.
RURAL FINANCE (FOREIGN)
A pioneer foreign bank in rural lending in China, HSBC became the first foreign bank to begin lending in Shandong province in 2011. Today HSBC has 24 rural banking outlets via 12 rural banks. HSBC is at the forefront of banks working to develop a sustainable model for rural finance in the hinterland.
SUBCUSTODIAN BANK (DOMESTIC)
ICBC started offering custody services in 1998 and now holds the biggest market share of its Big Four rivals. In addition to a full menu of custody products, the bank has focused on emerging services such as asset management plans for brokers and equity investment funds. ICBC is also the first bank in China to offer customized value-added services such as performance evaluation of managers and risk management.
SUBCUSTODIAN BANK (FOREIGN)
HSBC China offers subcustody and clearing services to foreign institutional investors in China’s B-share market and Qualified Foreign Institutional Investors (QFIIs) in China’s A-share market, currently holding the largest share in both markets.
SMALL BUSINESS LENDING (DOMESTIC)
China Construction Bank
China Construction Bank saw slower revenue growth and marginally declining credit quality in the first half of 2014. But its small- to medium-enterprise loan quality is better than its peers’. It has been an innovator in risk management of small business loans. Its fast-track SME loan service is an important source of credit to SMEs.
SMALL BUSINESS LENDING (FOREIGN)
Standard Chartered is not only a major lender to Asia’s small businesses but an advocate for better lending services generally for SMEs. The bank is a pioneer in offering supply chain financing to smaller companies, facilitating their entry into cross-border markets. This more holistic approach supports company ecosystems, ensuring greater stability for individual firms.
SUPPLY CHAIN FINANCE (DOMESTIC)
Bank of China
Bank of China has developed a holistic approach to supply chain finance that is unique among its mainland peers. Its trade finance services are calibrated by measuring supply chain flows for various members, with core enterprises as the starting point.
SUPPLY CHAIN FINANCE (FOREIGN)
Standard Chartered’s supplier finance and buyer finance programs use proprietary credit models to analyze specific supply chain interrelationships between clients and their suppliers/buyers with parameters that measure the strength of the supply chain. This approach, which is a departure from traditional, stand-alone risk evaluation, has allowed the bank to introduce a range of innovative products.
TRADE FINANCE (DOMESTIC)
Bank of China
Bank of China (Hong Kong)’s Trade Services Center has strengthened its offering under BOC Corporate Banking Services Online, including enhancement of import and export services and the launch of repayment and guarantee services. BOCHK is able to draw advantage from the extensive mainland and global network of its parent company, Bank of China.
TRADE FINANCE (FOREIGN)
Trade finance is a strategic focus of DBS’s Global Transaction Services business in China, and has been growing rapidly. GTS’s trade revenues are forecast to end 2014 24% higher year-on-year, with a compound annual growth rate of 63% in trade revenues over the past four years. DBS has built a reputation of developing innovative trade finance solutions amid fast-paced market changes, regulatory shifts and treasury management trends.
TREASURY AND CASH MANAGEMENT BANK (DOMESTIC)
ICBC is among the most sophisticated of the Chinese Big Four in cash management. The first Chinese bank to launch global cash management from China, it has cash management centers in Hong Kong, Singapore, Paris, Toronto and South Africa. The core information systems of eight ICBC overseas branches and ICBC Asia were centralized in an overseas data center.
TREASURY AND CASH MANAGEMENT BANK (FOREIGN)
DBS’s treasury and markets business in China achieved over 50% revenue growth year-on-year in 2013. With the regulations permitting onshore customers to sell renminbi FX options, DBS was one of the first banks in China to develop and launch FX-hedging products containing an option structure.