Overall: Best international bank for BRI 2017
HSBC was a Belt and Road bank before BRI became a buzzword. Although other global banks have made admirable efforts to refocus their business amid the rise of China’s Belt and Road policy, HSBC needed no such programme.
The bank has long been considered among the very best debt houses in Asia, but nowadays it also has clear strength in equity capital markets and M&A.
It has an impressive infrastructure team, relationships with some of the biggest companies from China and a branch network that extends across Asia, leaving out only a few countries in the region.
As a result, HSBC is remarkably well equipped to make the most of the opportunities along the new Silk Road.
The bank has been there in some predictable roles, helping to manage Bank of China’s multi-tranche Belt and Road bonds, or bringing Maybank to the panda bond market for the first time. Indeed, its world-beating bond team have been there throughout the development of Chinese credit, both onshore and offshore.
HSBC was one of the first banks to take the lead in the offshore renminbi bond market and worked on the very first such deal, a Rmb5 billion ($763 million) issue by China Development Bank in July 2007. Its commitment to the dim sum bond market did not prove a handicap as issuance shrunk.
Instead, HSBC bankers have followed their clients to the markets they do want to issue in. That has ensured a wall of dollar bond supply from their Chinese clients and an impressive roster of panda bonds for foreign issuers.
Of course, bond financing strength, useful as it is, is only a small part of what a bank needs to truly stand out in Belt and Road. Multi-asset class execution ability, a strong pedigree in advisory and a strong presence in emerging markets are all required for banks to clinch the top slot. On each point, HSBC scores highly.
In M&A, HSBC won key deals that promise to transform companies and sectors. It advised China General Nuclear Power on its $2.3 billion acquisition of Edra Global Energy. The deal marked the first time that Malaysia had ever allowed a foreign company to take full ownership of a domestic power plant.
HSBC guided Sinopec through its acquisition of a 49% stake in a North Sea oil project and has brought Chinese companies into southeast Asia, western Europe, the US and Australasia.
Its branch network is another clear strength. HSBC has branches in 70 countries, including 44 markets that it defines as Belt and Road. This global presence is helped by a commitment to serving Chinese corporations when they go offshore. HSBC now has 24 China desks outside the mainland, offering Mandarin language advice to clients in South America, eastern Europe and elsewhere.
The competition for this award comes from Standard Chartered, which is a worthy runner-up. StanChart can boast its own impressive network, taking in frontier and big economies alike. Its local knowledge also means that, while other banks fight for mandates from Chinese companies expanding overseas, StanChart is just as likely to be on the other side of this business.
But HSBC was undoubtedly a worthy winner this year. It has always straddled continents, starting life financing trade between Asia and Europe. The bank has Belt and Road in its DNA. This pedigree has long been an advantage to HSBC, but it now looks more valuable than ever before.