Although Asian banks have been capturing large corporate clients from European rivals, the latest research from Greenwich Associates shows that HSBC has established itself as the leading bank in the region in terms of both number of relationships with large companies and service quality ratings.
With balance sheet pressures subsiding and attractive returns difficult to find in their own local regions, European providers have increased risk appetite allocations and began competing again for Asian corporate business.
Local providers have benefited from the increased supply of experienced professionals trained by the foreign banks and a steady improvement in the capabilities and service quality—a shift that has led some leading domestic and regional players to become credible alternatives to the global banks, at least in parts of the banking business.
HSBC Leads Across Asia; Local Banks Crack Top Ranks in Country Markets
HSBC has weathered these trends by consistently capturing a disproportionate share of core and “strategic” relationships with large Asian companies, which makes these client relationships more durable and provides prized opportunities for product cross-selling.
Thanks in part to this performance, HSBC has established relationships with 64% of large Asian companies, making it by far the region’s leader in those terms. Standard Chartered Bank is second with a market penetration of 54%, followed by Citi at 50%, ANZ Bank at 41% and Deutsche Bank at 29%. These banks are the 2014 Greenwich Share Leaders in Asian Corporate Finance. The 2014 Greenwich Quality Leader in Asian Corporate Finance is HSBC.
Gains among local banks are evident in performance rankings at the country level. Bank of China ranks first in China with an impressive market penetration score of 81%. In Hong Kong, HSBC clearly leads with a market penetration score of 86% and ties with Citi as number one in market penetration in India.
Standard Chartered Bank leads with a 60% market penetration in Singapore, while Korea Exchange Bank and Shinhan Bank took the lead in South Korea. In Taiwan, Mega International Commercial Bank leads the market at 71%. These banks are among the 2014 Greenwich Share Leaders in Asian Corporate Banking.
“Despite the improvements in capabilities and quality on the part of Asia’s banks, global providers still dominate the large corporate space on a pan-Asian level,” says Greenwich Associates consultant Paul Tan, “with the trend towards banking relationship consolidation and a growing focus on pan-Asian operations further strengthening the most “global” banks, and the rising regional players.”
Asian banks also have been winning corporate relationships and domestic cash management market share from global providers.
Despite this progress, global banks dominate the list of Greenwich Leaders at the pan-Asian level, with HSBC leading the way with a penetration score of 43%, followed by Citi at 38% and Standard Chartered Bank at 27%. The only home-grown bank on the list, Bank of China, ties with Deutsche Bank for the fourth spot at 16%. These firms are the 2014 Greenwich Share Leaders in Asian Large Corporate Cash Management.
The 2014 Greenwich Quality Leader Asian Large Corporate Cash Management is Bank of America Merrill Lynch, Deutsche Bank and J.P. Morgan. As in corporate banking, local banks’ recent progress in winning domestic cash management relationships is evident within individual country markets, although global providers continue to claim the majority of Greenwich Quality Leader designations.