Asia is the new battleground for European transaction banking
Geopolitical concerns are pushing corporates in Asia to work with European transaction banks.
Asia is the fastest-growing transaction banking market globally, as banks vie for cash and trade business beyond their core remit.
European banks are particular attracted to the region, as corporates based in Asia hope to diversify away from Asian and US banks that may be caught up in the ongoing trade war, says Stefan Hoops, head of Deutsche Bank’s corporate banking division.
“It might seem a little incongruous, but over the last 12 months, we have won more mandates for American companies based in Asia than for European companies in North America or American companies in Europe,” he says.
According to Deutsche Bank, its Asia-Pacific business with US multinational corporations grew 6% year on year in 2019 and the bank expects similar results in 2020. In comparison, the bank’s growth with European corporates in the same region remained flat.
“I’d argue that within the current context, a US treasurer working in China is much more likely to seek out advice from a European bank in a region where they hope to mitigate risk and diversify their business as the world becomes increasingly polarized between China and the US,” says Hoops.