Are you looking for an investment banking job in Hong Kong or Singapore? Are you wondering whether the bank you want to join is outperforming the one you’re currently working for?
Data provider Dealogic has just released its latest investment banking revenue league tables for the first half of 2019, which we’ve published below. Here’s how the major global and Chinese banks stack up against each other across M&A, ECM and DCM for Asia (ex-Japan).
What banks should you work for in Asian M&A?
If you want to work for a Western bank that’s toward the top of the Asian league tables, M&A is the sector in which you have the most choice of potential employers. Of the Chinese institutions, only CITIC makes the top-10 banks for H1 2019 ex-Japan Asia M&A revenues – and it’s in ninth position. “Chinese banks are losing out on cross-border M&A deals to international banks, which have better global networks and industry expertise,” Stanley Soh, a Hong Kong-based director of Asian financial services solutions, told us previously.
The best performer in Dealogic’s M&A table is JP Morgan. Not only is it in first place, but it has a dominant 13.2% market share, significantly ahead of second-ranked Credit Suisse. JP Morgan has also jumped four slots compared with the first half of 2018. Citi, meanwhile, has soared up the rankings year on year – from ninth place to fourth.
What are the best banks to work for in Asian ECM?
ECM is arguably the sector in which competition between Chinese and Western banks is at its most intense, despite Hong Kong losing its crown as the world’s largest IPO market in the first half. Global firms had a slight edge in H1 – they collectively generated 55% of the revenue of the top-10 banks for Asia (ex-Japan) ECM.
The long-term trend, however, is that Chinese banks are winning more IPOs in Hong Kong. “They already have strong relationships with the Chinese private companies that are increasingly dominating new listings here,” says Hong Kong-based finance professional Matt Huang, author of the book Young China Hand.
Morgan Stanley ($109m in revenue) just pipped CITIC ($108m) into first place for ECM. Both Goldman Sachs and JP Morgan saw their league table positions fall – to third and eighth, respectively.
Where should you work as a DCM banker in Asia?
The Asia ex-Japan DCM market is now the domain of Chinese banks. Leading the way are China Securities and CITIC, which both generated more than $100m in revenue for the first half. Four other mainland firms – Haitong Securities, Guotai Junan Securities, Bank of China, and CICC – follow them. China is dominating the DCM market across Asia because its debt issuance has soared. Chinese banks have cashed-in as a result.
So what’s the catch? While Chinese banks have long undercut the underwriting fees of Western banks, they are now taking the practice to a whole new level as the market becomes increasingly competitive. The average charge for selling Chinese corporate bonds in 2007 was typically 1% or more of the deal size, according to Bloomberg. Last year it dropped to just 0.44%, and many deals paid 0.1% or less. As Chinese banks’ earnings are driven down by aggressive pricing, some have begun cutting DCM staff and reducing the pay of their existing bankers
If that’s put you off working for a Chinese bank, then Credit Suisse and HSBC are the best-performing global firms in Asian DCM in H1.
Image credit: MagMos, Getty
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