On the final day of our awards announcements, we reveal our regional house winners.
Congratulations to the winners on a year of excellence.
We will host a dinner to present the awards in Hong Kong on January 27.
BEST BANK
2015 was the year of HSBC. HSBC stole the show in Asia with its pivot to the region as it outlined its intention in June to target growth in China’s Pearl River Delta, the Asean region, and through the internationalisation of the renminbi currency.
The carefully crafted strategy points the way for a bank that is already largely Asian and is contemplating whether to shift its global headquarters eastward, away from London. In 2014 the region contributed 78.3% of its global pre-tax profit.
A significant step forward came in November when HSBC said it has agreed with a local government-owned entity to establish a majority-owned joint venture securities company in the Qianhai district of Shenzhen in China’s Guangdong province. HSBC’s deal is different from many other Chinese joint venture securities firms as it has control and is not partnered with a potential rival firm.
As well as the headline-grabbing game plan, HSBC worked hard at the more mundane task of getting everyone to pull together. In the first half of the year, revenue from cross-selling between its businesses rose 6%.
That push is personified by the close working relationship between Gordon French, HSBC's head of global banking and markets for Asia Pacific, and Paul Skelton, regional head of commercial banking. It is put into action by Rod Sykes, head of commercial banking origination, Asia Pacific, and his team who help HSBC’s enviable roster of corporate lending clients execute deals.
Thirteen of HSBC’s 14 high yield bond mandates so far this year were executed for commercial banking clients.
In terms of terms of mergers and acquisitions, HSBC gave indispensable advise on some of the year’s largest deals such as CKH Holding’s merger with Hutchison Whampoa. It was also lead financial adviser to Tesco on its sale of Homeplus, our Deal Of The Year.
Repeat business is generally a sign of happy customers. When Biostime bought 83% of Australia’s Swisse Wellness, it was the third mandate from the company since Biostime’s initial public offering in 2010.
It was also at the forefront of market developments. In September, HSBC was among the first foreign banks to issue an onshore panda bond in China.
HSBC has been hiring experienced bankers across the business such as Jason Rynbeck, who started in August last year, and Mathew Kirkby, in May, to help it execute on its strategy.
The high-profile deals are often the result of a well-run commercial banking relationship. In the first six months of the year, HSBC’s Asian commercial bank delivered a $2.4 billion pretax profit, or 53% of the unit’s global profits.
HSBC remains the world's leading trade bank with a 13% global market share according to consultancy Oliver Wyman.
BEST INVESTMENT BANK
Morgan Stanley was the year’s all-round investment bank, helping clients to navigate volatile markets to clinch some of the year’s landmark deals.
It was on top of the standout trends of the year such as private placements, China outbound M&A, and formosa bonds; and importantly it had no major regulatory mishaps during the year.
In M&A it was everywhere on a good mix of buy-side and sell-side deals across many sectors. It advised on some of the more complex cross-border deals that also required financing including the $950 million acquisition of John Holland by the China Communications Construction Company unit CCCI.
Among Morgan Stanley's standout work this year was its advice on China Resources Holdings's purchase of China Resources Enterprise's non-beer business assets for HK$30 billion ($3.8 billion).
Morgan Stanley’s financial institutions group had a memorable year, from advising DBS on its bancassurrance partnership with Manulife to working on private placements for Chinese fintech firms ZhongAn and Lufax.
In equity capital markets, Morgan Stanley’s work on the IPOs of Chinese food and beverage manufacturer Dali Foods and Thailand's Jasmine Broadband Internet Infrastructure Fund was outstanding because the deals were completed at fair value for both the issuer and investor in challenging market conditions.
Morgan Stanley also reopened the Hong Kong IPO market after the summer's Chinese market crash with offerings from IMAX China and Regina Miracle. Both deals have performed strongly since.
In debt Morgan Stanley has picked its battles. It was joint active bookrunner on Petronas’s $5 billion multi-tranche senior notes offering, the largest-ever US dollar-denominated bond from Southeast Asia, and joint lead manager on Shimao Property’s $800 million high-yield bond.
It has been at the forefront of some key trends in elevated roles such as a flurry of activity in formosa bonds. It worked on 12 formosa bond deals totaling more than $8 billion and distributed exclusively into Taiwan, including a role as sole structuring agent and global coordinator on a $2.6 billion formosa bond for AT&T.
It was also very active in liability management, particularly for China high-yield property names, having led consent solicitations for the likes of MIE Holdings, Modern Land and Soho China, amongst others.
BEST ASIA COMMERCIAL BANK
Despite a tumultuous year for banks, DBS has managed to maintain a level of consistency that has kept investors and analysts happy.
The bank reported a rise in profits to S$1.07 billion ($761.7 billion) for the quarter ending September 30, an impressive achievement considering the market volatility experienced during the period as China’s equity market collapsed and the country devalued the renminbi, before steadying.
Like most banks the volatility had a detrimental impact on DBS. Its fee and commission income fell 5% year-on-year in the third quarter, while investment banking income collapsed 65% to S$31 million.
Yet the bank remained strong overall. The decision of chief executive officer Piyush Gupta to focus on building strong relationships and sensible lending in six core markets – Singapore, China, Hong Kong, India, Indonesia and Taiwan – has proven a sound strategy.
A few troubled India loans aside, DBS continues to enjoy strong lending revenues, with net interest income revenue rising 13% to S$1.81 billion. And loans are still growing; they expanded 9% during the third quarter to S$285 billion, even as DBS maintained a non-performing loan ratio of just 0.9%.
The bank is not scared to embrace change. It is arguably the most progressive in Asia when it comes to digital banking solutions. Advances include DBS’s decision to set up a financial technology incubator with Nest in Hong Kong, picking 10 startups to participate. DBS hopes such efforts will allow it to greatly increase engagement with its depositors and allow it to roll out a far broader customer base in India too.
It gained another healthy line of business when Canadian asset manager and insurance company Manulife paid $1.2 billion to replace Aviva in being able offer insurance and wealth management products through DBS’s branches over a 15-year period. In addition to the initial lump sum, ongoing distribution and advisory fees from these services could potentially add 3% to 5% to DBS’s overall income. The link-up should also be good for customers, as Manulife has a broader product array than Aviva.
DBS looks well-placed going into 2016 too. Equity analysts note the bank’s strength in Singapore and Hong Kong means that any US interest rate hike is likely to further benefit its net interest margin. And while China’s economy is slowing, rising numbers of companies from the nation are looking to grow offshore, organically and inorganically. DBS has multiple product lines that could support their desire to do so.
DBS still has areas for improvement. Its investment banking capabilities are the best among Asian players but they remain somewhat behind those of its global rivals. If it can improve on this business, it might well be able to convert more corporate customers into investment banking clients too, as some rivals have managed.
Yet amid a generally trying year, DBS has stood up and performed well. For this it deserves our commercial bank of the year award.
BEST ASIA INVESTMENT BANK
Several banks and brokerages are sophisticated and powerful dealmakers within their local markets. But few can boast of their investment banking prowess outside their home borders. In Asia DBS is one of the exceptions.
Most of the bank’s equity and debt capabilities focus on its home market of Singapore, where it has a stranglehold.
DBS boasts a 40% market share of Singapore dollar bond issuance in 2015 and is the go-to bank for local and foreign corporates seeking to issue in the currency, including Julius Baer, which conducted a S$450 million ($317 million) perpetual non-call five Additional Tier 1 bank capital deal in November, the first such deal of its kind in Southeast Asia.
In equity, DBS was the lead arranger of the listing of Keppel DC Reit, the first data centre Reit to be floated in Asia, plus it was a bookrunner on 12 secondary equity offerings during the year, including Keppel Infrastructure Trust’s S$525 million equity offering in May and a S$140.1 million offering from Frasers Commercial Trust in July.
DBS has also participated in a number of landmark US dollar bonds from Asia. Examples include Huawei Investment & Holding’s $1 billion 10-year bond issue in May, Reliance Communications’s $300 million five-year deal in April, and the $3 billion dual-tranche bond of bad debt management agency China Cinda in the same month.
Perhaps most noteworthy, DBS was a joint bookrunner on all tranches of Bank of China’s multi-tranche Silk Road bond in June and it self-led its $1 billion covered bond issue in July, a first for Southeast Asia.
In addition, DBS is becoming increasingly assertive in the offshore renminbi, or dim sum bond market, although relatively few deals were done this year.
The Singapore institution is not a complete regional investment bank yet. Its business remains heavily Singapore- and Hong Kong-focused and it is relatively weak when it comes to mergers and acquisitions, a space that has seen rapid growth in deal volumes. However, it was the sole financial adviser to JTC for the four-way merger of Ascendas, Singbridge, JIH, and Surbana, and it advised and backed Keppel Corporation on its de-listing of Keppel Land. As the bank continues to gain ground and add corporate clients it should develop a bigger advisory deal flow too.
DBS remains the powerhouse of Singapore investment banking and it is becoming a mainstay in deals across the region too. However it needs to watch out. China's investment banks in particular are eager to grow. It may not be long before they also attempt to become institutions.
BEST EQUITY HOUSE
Asia ECM bankers have had a roller coaster ride this year. In the first half of the year equity market activities were very active buoyed by the Chinese market rally, but the stock market rout since mid-June have resulted in a slow summer in Asia ex-Japan.
Despite that volatility UBS was able to fire on all cylinders both geographically and in terms of product diversification and innovation. It priced the first billion equity deal – China Railway Signal’s $1.4 billion IPO – after the China market crash, executed the first pre-approval H-share private placement, and also printed the first exchangeable bond in the A-share market.
UBS have had a very impressive year and stood out in a tightly-contested ECM league table with $15.6 billion from 57 deals in Asia ex-Japan, putting it on top of all non-Chinese investment banks. In terms of deal volume, UBS witnessed an 85% increase from last year when it ranked only seventh in Asia ex-Japan league tables, according to Dealogic.
During the period UBS also earned more money - $190 million - from the ECM business than any other non-Chinese banks. ECM remained the most lucrative piece of business and contributed to around 65% of the bank’s investment banking revenue.
What made UBS shine among its rivals was its ability to secure top-notch roles in high-profile deals in a market where junior roles are increasingly not preferable because they generate much less fees.
Competition was intense among bulge-bracket banks in Hong Kong, but UBS is clearly an overachiever in the domestic market in China, a market that is still relatively inferior to foreign investment banks.
It was able to leverage on UBS Securities, its joint venture platform in China, to deliver equity offerings despite the four-month IPO suspension imposed on Chinese companies from July to early November.
The Swiss Bank priced four IPOs in the A-share market this year, topping the domestic league table with $2.3 billion in total volume. UBS was the only non-Chinese bank among the top ten in the league table.
Overall, UBS is named Best Equity House for its consistency in delivering business throughout the year and the ability to lead transactions through solid client relationships.
BEST BOND HOUSE
For all the deals that were killers, and for repeat billion dollar issuers, there is the Hong Kong Shanghai Banking Corporation, HSBC — simply The Bank.
Once again, in 2015, HSBC is the region’s Best Bond House in the estimation of FinanceAsia’s editorial team. In pressing his case for the year, Alexi Chan, HSBC’s global co-head of debt capital, used the word undeniable, and he was right.
HSBC was the clear leader in Asian G3 bond bookrunners for an unprecedented sixth consecutive year, achieving league table credit for over $17.5 billion in G3 issues via 115 transactions from Asia ex Japan during the award period.
Time and again the bank was on deals that defined the trends of the year, both in the hot hand first half and the slower investment grade-dominated issuances that ran in the slower second half of 2015, where volumes began to fall behind year on year.
Kicking off the year with Agile Property Holdings and opening up the Chinese high yield property market, HSBC got key issuers in the market and out the door before declining stock market prices, and curbs on property sales closed in on the largest volume source for G3 currency Asian high yield.
In a year for investment grade issuances, by all accounts, HSBC too led the pack. In the awards period the bank racked up $14.7 billion and held a significant lead in league tables.
Regionally HSBC brought in deals from across the spread. It showed strength in every major market, from Sinopec in China to Singtel in Singapore, Hutchison in Hong Kong, Formosa Plastics in Taiwan, KNOC in Korea, and Reliance in India. In the Philippines, HSBC stood out too with Vista Land.
It’s difficult to cover all the things that made HSBC tops this year in this category but, in sum, there are its sukuk strengths, regional spread, and leading local currency issuances.
Some competitors were keen to play up the bank's decline in market share, its reliance on China; secondary traders even grumbled on background about briefly mis-named securities, or prices entered incorrectly on bond trading platforms.
But in many ways these whinges say more about HSBC's essential ubiquity in the world's fastest-growing economic region than about any real decline or challenge to its position as the four-times-in-a-row winning Best Bond House in the Asia-Pacific region.
BEST M&A HOUSE
To judge by deal volumes, 2015 has been a banner year for Asia ex-Japan M&A. Completed M&A volumes stood at $789 billion for the year to November 18, nearly double the $413.6 billion registered during the corresponding period of 2014.
The increase in deal flow was largely down to a few mega restructurings partly initiated by the Chinese government, with the merger of railway operators CNR and CSR alone comprising $60.6 billion of the volume.
Korean chaebol SK Corporation also conducted a $24.92 billion merger of two units, while Hong Kong billionaire Li Ka-Shing restructured his flagship companies, Cheung Kong Holdings and Hutchison Whampoa, into two new businesses – CK Hutchison Holdings and CK Property Holdings – and accounted for $89.9 billion of M&A activity.
Many banks gained league table recognition for these transactions but few of them were absolutely indispensable. One bank stood out for the quality of its advice: HSBC.
Even rivals admit the UK-headquartered bank, and in particular Stephen Clark, a managing director in global banking and markets, was integral to the restructuring of Cheung Kong and Hutchison Whampoa. Combining publicly-listed companies can be difficult but Clark, who is qualified as a Hong Kong lawyer, kept the deals on track.
HSBC also ran an excellent auction process when Tesco disposed of Homeplus to MBK Partners for $6.4 billion in September – the largest private equity sale in Asia and our deal of the year. The bank helped net the struggling UK supermarket company very good value.
While HSBC was not heavily involved in the China restructuring, it advised China Overseas Land & Investment when parent company China State Construction Engineering Corporation injected its Chinese and London property assets into it. Additionally, HSBC was one of two financial advisers for Neptune Orient Lines of Singapore when the company sold APL Logistics to Japan’s Kintetsu World Express for $1.2 billion in February, and it advised infant formula producer Biostime International Holdings of China on its $904 million acquisition of Swisse Wellness Group of Australia.
Rivals may argue HSBC depended heavily on Hong Kong, and particularly deals from the companies of Li. But these were among the largest deals of the year and HSBC was essential to them. Plus its work in Korea, Singapore, and mainland China showed it was not solely a one-market adviser.
Good M&A advisers are integral to the success of deals. HSBC deserves recognition for a successful 2015.
BORROWER OF THE YEAR
Bank of China $4 billion “One Belt One Road”
In many ways, Bank of China’s “One Belt One Road” offering should have won just about every award in 2015.
The epic $4 billion, six-tranche, four-currency offering constituted a once-in-a-lifetime deal – the largest Chinese bank senior offering in history, the largest-ever transaction in four currencies, the first-ever simultaneous offering by multiple bank branches, and the list goes on.
The deal was just too much to contain in a single award category, which is why we reserved it for this final day of FinanceAsia’s 2015 Achievement Awards.
Besides, while every bank on the deal added key elements to the transaction, Bank of China’s performance as a borrower was particularly notable.
BOC held a single conference call with all major investors globally on June 23 and pulled off a global intraday execution the next day.
The transaction received such strong response from investors that the overall order book across all tranches exceeded $15 billion before the release of the final price guidance, which enabled syndicates to tighten pricing across all tranches.
All the tranches continue to trade around par.
Unlike other major Chinese bank issuances, there was significant diversity in regional distributions across the deal (except in the smaller Singaporean dollar tranche).
Normally, FinanceAsia’s Borrower of the Year award would go to a repeat issuer in the year but this one transaction is enough to establish Bank of China’s treasury above all others in 2015.
This deal was a statement that a major new global player had entered the market and it echoed loudly through the year. For pioneering China bank capital issuance, Bank of China is by far and away Borrower of the Year.
BEST ISLAMIC FINANCE HOUSE
The accolade this year goes to HSBC, which advised on several notable and complex transactions and has topped league tables for international sukuk issuance for the last five years running, according to data compiled by Bloomberg and Dealogic.
Between 2010 and 2015 HSBC helped corporate and sovereign issuers to raise $33.81 billion in 141 transactions, representing a market share of 16.5%, according to data provider Dealogic.
Thanks to its international client network, the amount of money raised for HSBC’s clients surpassed Malaysian rivals CIMB and Maybank, whose market shares over the five-year period are 15.8% and 12.1%, respectively.
HSBC has long been a frontrunner in Islamic finance, helping corporate and sovereign issuers to achieve their financial goals while navigating a volatile market.
During the award period, HSBC helped the government of Hong Kong to raise $1 billion through the sale of a five-year sukuk in May, its second foray into the market following its sukuk debut in September 2014.
HSBC was also a joint lead manager on the Republic of Indonesia’s $2 billion offering in May, cementing the sovereign's role as a leading issuer in the global sukuk market. The sovereign deal was priced at a yield of 4.235%, 22.5bp tighter from initial price guidance after receiving a final order book of $6.8 billion.
HSBC’s efforts have also paid off within Malaysia.
The bank was a joint lead manager on the government of Malaysia’s ground-breaking $1.5 billion dual-tranche sukuk offering in April, helping the sovereign to tap international markets at a challenging time.
The deal included a 30-year tranche – the world’s first 30-year sukuk by a sovereign and Asia’s first 30-year dollar sukuk, according to data provided by HSBC.
Malaysia has been going through a rough patch, with its fiscal position weakening due to mounting debt and lower oil prices. Even so, total orders on the Malaysian dual-tranche note – its first since 2011 – reached $9 billion from 450 accounts, according to a term sheet seen by FinanceAsia.
The 10-year note eventually priced at Treasuries plus 115bp, 20bp tighter than initial price guidance, while the 30-year bond priced at Treasuries plus 170bp, 15bp tighter than initial price guidance.
HSBC’s contribution to these landmark transactions demonstrates its expertise in Islamic finance and its comprehensive distribution capacities in the region. With a strong presence in Hong Kong and China, the bank is commited to bringing in different names to the market, potentially bridging the funding gap between mainland China and Islamic nations.
BEST LAW FIRM
Freshfields Bruckhaus Deringer
The accolade of Best Law Firm this year goes to Freshfields Bruckhaus Deringer which advised on a number of notable and complex cross-border transactions and ranked high on league tables for the number of M&A and equity capital market deals, according to data compiled by Dealogic and Bloomberg.
The British firm, which has had a presence in Asia for more than 30 years, advised on about 35 M&A deals worth a total of $136 billion during the period under review, according to Dealogic.
Some of the most high-profile M&A transactions that it worked on include the reorganisation and combination of Cheung Kong and Hutchison, two of Li Ka-shing’s flagship companies. It also worked on China National Chemical Corporation’s $8.98 billion acquisition of Pirelli & C SpA and Tesco’s $6.4 billion sale of its Korean retail chain Homeplus to a group of investors led by MBK Partners, which is Asia’s largest sale to private equity.
In addition, Freshfields was an advisor for Itochu and CP Group when they bought into Citic Ltd for $10 billion, as well as on China Resources Nationals Corp’s $1.87 billion acquisition of China Resource Enterprise Ltd (all the non-beer business) and Bright Food’s move to buy control of Israel’s Tnuva Food Industries for $1.37 billion.
Reinforcing its excellent year, Freshfields worked on a number of large and complex securities transactions across various industries in the region too.
Significant equity deals Freshfields advised on in the period under review include the $4.04 billion Hong Kong IPO of Dalian Wanda Commercial Properties, China Huarong’s $2.3 billion IPO, and CICC’s $933 million new listing.
It also advised Hang Seng Bank on its proposed establishment of a majority-owned joint venture fund management company in Qianhai, in conjunction with Shenzhen Qianhai Financial Holdings. The joint venture is still pending approval but is well placed to become the first fund manager to use the Supplement X of the Closer Economic Partnership Arrangements between mainland China and Hong Kong and Macao, signed in August 2013.
