The Asean alternative emerges
As growth in China falters and India seems to spiral ever more helplessly downward, southeast Asia has become central to the fortunes of banks in the Asia-Pacific region.
The Association of South East Asian Nations (Asean), in particular Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam are important to global banks and home to some of the most successful and innovative emerging local Asian players.
Less economically developed Asean nations, including Myanmar, Cambodia and Laos, are also central to the efforts of banks seeking to capitalize on what could be spectacular growth over the coming years. The Asean region is home to 600 million people, underlining the importance to banks of building a profitable and lasting franchise.
The region’s growth is being fuelled by the need for infrastructure in the form of roads, power plants and ports, and most governments have also demonstrated a desire to broaden capital markets to fund development.
A 2011 report by McKinsey pointed out that capital market and investment banking revenues in the five largest Asean countries were already higher than would normally be indicated by their GDP per capita. And as far back as 2007, at the 12th summit of Asean countries, leaders affirmed their commitment to the creation of the so-called Asean Economic Community by 2015.