China’s banks seek cautious steps onto world stage
No one doubts that China’s banks will make acquisitions abroad. What is less clear is when the buying spree will start and what international expansion strategies the banks will deploy. The answers might not be obvious. Chris Leahy reports.
HONG KONG’S FORTUNES have always been built on the foundations of China. These days, though, Beijing’s orbital pull is greater than ever. The territory’s stock market is increasingly dominated by mainland China listings and the fortunes of its financial community are joined to the hip of China’s continued economic prosperity.
That is especially so in the case of China’s banking industry. It’s successful financial restructuring and world-beating IPOs were executed by Hong Kong’s well-heeled investment banking community from the gleaming tower blocks of Central. Well rewarded for their efforts, Hong Kong’s investment bankers are now beginning to savour the prospects of the next China banking bonanza: an M&A wave as China’s big banks deploy vast sums of capital to compete globally.
So runs the script from the bankers. Matters might turn out a little differently in reality.
"The raging hormones among investment banks are driving some of this China bank fever," says the head of banking at a consulting firm. "They look at the valuations of the banks and salivate. But the banks themselves are more restrained.