Finance: Transformation stories in Asia, CEE and Africa


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Banking and capital markets in Asia, central and eastern Europe and Africa have been transformed over the last 50 years, but the change in Asia is particularly breath-taking.


In 1990, Japan made up 45% of global equity market capitalization and its three long-term credit banks had a market cap of $140 billion. The top 50 US banks at the time were worth just $110 billion combined.

How things have changed.

Today China dominates the region and the biggest challenge that all market participants face is how to position correctly for an opening up of the country’s markets and an investment banking environment where Chinese players have become so powerful.

With its large population and growing mass-affluent, young middle class that has been underserved by the banks, China has also led the incursion of tech-savvy non-banks into the payments space. It is the true home of digital disruption; firms such as Ant Financial and WeChat now have global influence. 

Asia’s ability to adapt has seen its capital markets recover and flourish since the crushing financial crisis that began in 1997. There were $300 billion of Asian credit bonds 10 years later in 2007 – today there are $1.7 trillion. 

The region has also been a pioneer in the increasingly important private markets: Alibaba’s $14 billion private equity placement was the largest in history and bigger than most IPOs. Asia is the engine of global growth and, in the words of one investment banker, “is the vol seller and the credit buyer of the world”. 


Central and eastern Europe’s path has been very different. Having negotiated a difficult transition into the post-Soviet era, many banks were growing their loan books at 50% a year by the time the global financial crisis hit. The collapse of real estate prices across the region thereafter caused a spike in bad debts that has taken a decade to resolve and cost regional groups dearly. Foreign firms have consistently dominated banking in the region, but strong local players have recently emerged and are competing on an equal footing.


Africa has had an often fraught relationship with the credit markets, but today more African countries than ever have access to international debt. Local market infrastructure is also undergoing substantial reform to develop equity and debt capital markets at home. 

The potential is certainly there. An estimated $100 billion a year is required to fund infrastructure projects alone across the continent. In 2017, Vodafone listed its Tanzanian operations on the Dar es Salaam stock exchange in a deal worth more than $200 million – equivalent to all of the Tanzanian IPOs undertaken over the previous decade.