European trio seek to solve Asian puzzle
Competition in Asia between the three leading continental European banks in the region is finely balanced. With many similarities in their business structures, how are they defining their respective positions in a changing market?
As Wall Street banks rebound powerfully in Asia Pacific and local Asian banks rise, particularly in their home markets, European investment banks have their work cut out. In Asia, the Europe-headquartered trio – Credit Suisse, Deutsche Bank and UBS – have been tinkering with their strategies, cutting back in some areas, hiring and strengthening in others. These three natural continental European competitors (HSBC, Standard Chartered and, to an extent Barclays, have a very British competition of their own going on) are trying to position themselves correctly for market conditions that have been choppy at best, as well as investor sentiment that remains finely balanced and deepening competition.
With the equity capital markets in the region proving less lucrative for banks than in the past decade or so, largely because of a shortage of large Chinese IPOs, a creeping uncertainty is taking hold about the right mix of businesses on which to focus.
This was not a problem in Asia Pacific until relatively recently. The fortunes of most foreign investment banks were based primarily on the power of their equity business and particularly primary equity capital markets.