Awards recognizing the strongest banks in China, as Chinese bankers take leading roles on the global stage.
Innovation in Fintech
China’s financial system has an underdeveloped credit tracking system, a problem that has inhibited Chinese banks’ lending to unestablished private companies. Ant Financial is working around this issue by developing its own credit scoring system based on the buying and selling histories of users on Alibaba, the massive online marketplace with which Ant is affiliated. Ant also offers wealth management options connecting lenders and borrowers to facilitate peer-to-peer microlending.
innovation in payments services
While Alibaba has garnered attention in fintech circles over the success of Ant and MyBank, the company’s chief competitor, Tencent, has been expanding its range of services and increasing its market share as well. Tencent launched its own online bank, WeBank, and offers a very popular payment service, known as WePay, which allows users to make purchases directly through Tencent’s wildly popular WeChat service.
DBS opened its first representative office in China in 1993 and incorporated in 2007 as part of the first group of foreign banks to enter the domestic market. Singapore’s largest bank, DBS leveraged its international brand to attract wealthy clients. Its deposits and investment revenue in China rose 26% and 29%, respectively, in the first half of 2016. DBS recently launched its own WeChat platform and expanded options for clients to do business online. In 2015 more than 23% of its wealth management deals were completed via digital channels.
HSBC’s profits fell by 29% in the first half of this year, and in August the bank disclosed compliance issues with US regulators. Amid turbulence, the bank has pared down its global footprint; it sold off its Brazilian operations last year. However, HSBC continues to push for expansion in China. It already boasts the largest branch network among foreign banks and plans to add 3,000 more employees in the Pearl River Delta in the next several years.
China-related equity underwriting has cooled off this year, after a sizzling start in 2015 led to a record-breaking 847 deals totaling $188.4 billion. UBS capitalized on the activity to raise almost $12 billion in 33 international equity deals and $5.8 billion in nine deals on China’s A-share market. Those numbers make the bank first in those measures among foreign banks, and second and third, respectively, among all banks. While its activity has slowed this year, UBS saw big gains recently on its December 2015 investment in Postal Savings Bank of China, which raised $7.4 billion in its IPO in September.