Best corporate and investment bank 2020: China Merchants Bank
China Merchants Bank
Shenzhen-based China Merchants Bank continues to set the standards for corporate and investment banking in the domestic market in almost every segment, under Chen Yujia, general manager of investment banking.
Take debt capital markets. CMB continues to lead its joint stock commercial bank peers while putting pressure on its bigger, state-owned peers. It underwrote Rmb898 billion ($131 billion) of deals during our awards period, between July 1, 2019, and June 30, 2020. That was an increase of more than 27% from the previous year.
Much of the growth of its bond business took place in the first half of 2020, with a 47.7% rise in volumes, as it helped its clients to meet their financing needs despite the impact of the Covid-19 coronavirus on investor sentiment.
CMB lifted its game in financial bonds during our awards period, working on 280 deals with a volume of Rmb375 billion, according to Wind data. With a 12.2% market share, it was the top financial bond underwriter among all its commercial bank peers and securities houses. Just a year ago, it ranked sixth with a 7.07% share.
Particularly noteworthy was CMB’s coverage of Chinese securities houses, 95% of which are its clients. It accounts for over half of the market share in brokerages’ short-term commercial paper issuance onshore, and led GF Securities’ Rmb5 billion, three-year ‘financial bond’ in the interbank market – the first of its kind after China loosened restrictions on such issuance from securities firms in the middle of last year.
CMB also brought to the market one of the first ‘anti-pandemic’ bonds in early February, raising Rmb300 million for Shenzhen-based China South Mountain Development (Group) Co to help build a new hospital in Wuhan, ground zero of the pandemic.
In leveraged finance, CMB also maintained impressive growth. Despite shrinking M&A volumes in China over the last three years, it has consistently secured Rmb100 billion or more in leveraged financing to its clients annually. CMB is on track to outperform again in 2020, having already contributed nearly Rmb60 billion over the first six months.
It led a Rmb20.8 billion syndicated loan to finance the acquisition by Hillhouse Capital Group of a 15% stake in Gree Electric Appliances, the largest state-owned enterprise reform transaction in 2019. CMB also helped CR Capital become the controlling shareholder in government-owned Chongqing Gas Group Corp, arranging a Rmb9 billion financing for the deal.
China’s government is making a big push in investment in digital infrastructure projects, for example in cloud computing and datacentres, and CMB has already built a presence in this area of new infrastructure. It was involved in Jiangsu Shagang Group Co’s purchase of a final 24% stake in UK data centre operator Global Switch Holdings for £1.8 billion, taking part in a £800 million syndicated term loan facility. The transaction was the last leg of an acquisition that started in 2016, in which the Chinese steel-maker acquired 49.9% of Global Switch.