Capital markets bankers in Asia are complaining of a new trend threatening their profits: corporate finance issuers are mandating more banks on each deal than ever before. According to data provided by UBS, the average number of banks on an IPO of more than $1 billion was 2.8 in 2007, 3 in 2008, 4.6 in 2009 and 5.4 in 2010. The trend is apparent in bonds as well: a fine example came on May 4 with the $500 million deal for India’s aptly named Syndicate Bank, which featured no fewer than eight bookrunners: Bank of America Merrill Lynch, Barclays Capital, Citi, Deutsche Bank, HSBC, JPMorgan, Royal Bank of Scotland and Standard Chartered.
Although Indian borrowers are somewhat notorious for mandating as many banks as possible on their fundraising transactions, bankers say the practice is spreading to other countries in the region.
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