While low fees have helped Chinese banks to win market share from U.S. and European counterparts in stock offerings and loans Matt Duchene Jersey Outlet , they figure nowhere among the 10 biggest M&A advisers by value of deals, Thomson Reuters data up to the end of November showed.
China’s biggest investment bank, CITIC Securities, ranked 11th, advising on US$68.7 billion worth of deals. The number of Chinese banks among the top 20 M&A advisers in the region fell to seven from eight and their market share slumped to 13.8 percent from 33.7 percent last year.
The Chinese banks’ struggles to emerge as leading advisers on big ticket acquisitions have curtailed their fee income growth at a time when the lending business is under pressure due to a slowing domestic economy.
“When Chinese companies go global, they will tend to call on banks and advisers who have global reach so there’s still a strong role for the international banks and advisers Erik Karlsson Jersey Outlet ,” said Aga Guzewska-Radzka, consultant at Accenture Strategy in Hong Kong.
A push by Chinese State-owned enterprises and private companies to buy assets abroad and the massive restructuring of the region’s biggest conglomerates are driving the deal-making boom. The trend is expected to continue, bankers say.
Top deals in 2015 include the US$33.7 billion combination of assets of China’s three main telecom operators as well as the US$15.4 billion purchase of British mobile phone company O2 by Li Ka-shing’s Hutchison Whampoa.
Chinese firms tend to advise on domestic deals, where they have relationships on both sides of transactions, but that’s less likely in cross-border acquisitions. They also have fared better than international rivals in financing M&A deals, where they have won business with cheaper funding because of their sizeable balance sheets Mark Stone Jersey Outlet , but that’s not the case for merger advice.
“They can’t compete on fees there,” said the head of M&A at a global investment bank that couldn’t be named.
Semiconductor, Internet and telecoms transactions have accounted for about a quarter of M&A deal value this year, a sector so far dominated by global firms such as Goldman Sachs and Morgan Stanley.
In order to win more cross-border deals, Chinese banks are adopting several tactics. CITIC Securities, for instance Matt Duchene Jersey Sale , appointed Italian banker Federico Bazzoni, formerly at Bear Stearns, to originate deals in Europe, Middle East and Africa.
Haitong Securities, China’s second-largest brokerage, completed in October the purchase of the investment banking arm of Portugal’s Novo Banco to use it as a platform for global expansion.
Some Chinese securities firms are also teaming up with European law firms to help source potential acquisition targets for mainland suitors Erik Karlsson Jersey Sale , according to a source with direct knowledge of the tie-ups who was not authorized to discuss them publicly.
Despite the jump