Asian Bank of the Year

IFR Asia Awards 2017
9 min read
Thomas Blott

In a year when China’s internationalisation was again the dominant theme in Asian investment banking, one bank stood out for its bold regional strategy. For its continued strength in Greater China and its overseas expansion, Citic Securities is IFR Asia’s Asian Bank of the Year.

Citic Securities built on its strong domestic platform in 2017 with the integration of its offshore businesses under CLSA. It won market share in overseas debt and equity underwriting, helping both Chinese issuers and investors access international markets, and expanded beyond Greater China.

Alongside a number of landmark deals in China – spanning A-share placements, convertible bonds and innovative debt issues – Citic Securities’ investment in its overseas operations began to pay off in 2017. It added fixed-income capabilities to the existing CLSA platform, bringing the full range of services under the overseas brand, and worked on deals from Sri Lanka to Indonesia.

After a breakout year, Citic Securities has a credible claim to being China’s first pan-Asian investment bank.

“When we acquired CLSA four years ago, there was no Chinese institution that had ever done this before: purchased a big international investment bank,” said Tang Zhenyi, chairman of CLSA, the international business of Citic Securities.

“After the integration, I often say, we are like a bridge heading north and heading south. By north, we mean helping Chinese clients and investors expand overseas. By south, we mean companies from Asia looking to develop their mainland business.”


Tang, who has worked at the World Bank and China’s Ministry of Finance, is a veteran of Citic Group. He joined CLSA as chairman in January, a position that was previously occupied by Jonathan Slone in addition to his current role as CEO.

Tang’s appointment in November coincided with the announcement that the legacy offshore business, Citic Securities International, would be aligned under the CLSA umbrella. Having integrated corporate finance activities in 2014, the scale of CSI’s Hong Kong operations meant the transfer of the remaining business units was a far bigger step. The last businesses came across to CLSA in May.

“Before the integration, we had two very different international platforms,” said Tang. “The integration has made things a lot more straightforward for our clients and also allows us to make better use of our balance sheet, which is important for the expansion of our overall business given the heightened competition.”

The move also answered any questions over the Chinese group’s long-term plans for the CLSA unit. Citic bought a 20% stake in CLSA in 2012 and bought out the remainder from France’s Credit Agricole in 2013. It faced challenges, however, from weak trading volumes in Asian equities and around the US business, after regulators labelled ultimate parent Citic Group as a bank holding company, subject to heavy restrictions under the Volcker rule.

The Chinese parent has taken a patient and gentle approach to integration. Many top CLSA executives have retained their existing roles, and insiders say the old CLSA culture – especially around its frank, often critical, equity research – remains intact, albeit with a tighter focus on costs and fewer flashy parties.

Tang’s arrival has also signalled a renewed investment in the offshore business. The chairman has also taken over day-to-day responsibility for the corporate finance department, including capital markets financings, from Andrew Low, who has relocated to Australia as global head of M&A.

Recent hires include Steve Lam, previously with Citigroup, as head of equity syndicate, and Jeremy Sng, formerly with UBS and Standard Chartered, as head of corporate finance and capital markets for Singapore.

“We’re one of only a few firms hiring across all business lines at the moment,” said Slone. “We need to scale up corporate finance and that’s going to create opportunities both for existing people and people we’re going to bring in.”


Notably, the move added fixed-income trading and origination to CLSA’s equity-focused platform, and has already resulted in some interesting deals outside Citic Securities’ traditional footprint.

It was joint bookrunner on the Democratic Socialist Republic of Sri Lanka’s US$1.5bn 10-year sovereign bond in May, the first time that Sri Lanka had hired Chinese bookrunners, with CLSA and ICBC International among a syndicate of seven.

“The Sri Lanka sovereign deal really was an indication of CLSA’s ability to leverage the resources of Citic,” said Tang. “It was several times oversubscribed and a lot of the orders came from mainland Chinese investors, which were brought in by CLSA.”

Citic Securities maintained its dominance in the mainland debt capital markets, ranking first among Chinese securities firms, arranging Rmb358.75bn (US$58.24bn) of bonds in the first nine months to the year, according to Chinese financial data provider Wind.

The brokerage continued to lead the onshore securitisation market, arranging Future Land Holdings’ Rmb2.1bn commercial mortgage-backed securities in China’s interbank bond market. The offering was only the third property-related securitisation under the supervision of the National Association of Financial Market Institutional Investors.

It was also an active player in the opening up of China’s domestic bond market as one of two joint lead underwriters for China Three Gorges Corporation’s Rmb2bn 4.38% 365-day notes, one of the first batch of primary deals issued under the Bond Connect scheme.

Citic Securities was also at the forefront of China’s growing Green bond market as an arranger of State Grid Corporation’s Rmb10bn offering in October, the first Green bonds issued by a central state-owned enterprise under the National Development and Reform Commission regime.


Citic Securities’ dominance of the H-share market put it at the top of the league tables in APAC for fees in equity and equity-linked deals for the first nine months of the year, according to Thomson Reuters data. It generated US$269.2m in fees for a 5.87% share of wallet, well above GF Securities in second place with a 3.99% wallet share.

It was sole sponsor for China Everbright Bank’s Rmb30bn A-share convertible bond, the largest in nearly seven years. The deal achieved an overwhelming response with the public tranche around 200 times covered and led the way as more convertible bonds from banks followed throughout the year.

Citic Securities also arranged the Rmb3.9bn Shanghai IPO of Shandong Buchang Pharmaceuticals, the largest healthcare listing in the A-share market in five years, while in Hong Kong, CLSA was sole sponsor and lead underwriter of China Yuhua Education Corporation’s IPO.

Outside of China, it added to its credentials in India and South-East Asia again in 2018, with a collection of equity offerings. Notably, CLSA helped India’s Yes Bank raise Rs49bn (US$759m) through a follow-on offer after a failed attempt in 2016, selling shares at a narrow 1.2% discount to the pre-close price.

Yes Bank went with a much smaller syndicate than in 2016 and CLSA was one of only two lead managers to retain its role from last year’s offering.

The investment bank was also a bookrunner on ICICI Lombard General Insurance’s Rs57bn IPO, one of several candidates in a long parade of Indian insurance IPOs this year, while in South-East Asia, it was joint bookrunner for Chandra Asri Petrochemical’s Rp3.3trn (US$244m) share placement.


Citic Securities’ list of deals in 2017 hints at the potential for the newly combined platform. In addition to Citic Securities’ strength in the mainland – it ranks first for profitability among the country’s 129 securities firms according to the Securities Association of China – it is beginning to build on CLSA’s broad international footprint, particularly in South-East Asia.

One important decision was to integrate Citic Securities International into CLSA rather than the other way round. The combined business spans investment banking, asset management, cash equities, retail broking and many other business lines but, crucially, retains the CLSA brand.

“We acquired CLSA four years ago and spent more than US$1bn, so naturally we want to utilise this platform,” said Tang. “I always joke that you wouldn’t spend HK$1,000 on a Nike jersey just to cut out the logo and put your own brand on it. We have to make full use of CLSA.”

The last few years have been characterised by the integration of China’s financial services sector into the global economy. As Chinese banks continue to grab more of a market share for themselves globally, Citic Securities is well placed to lead that charge.

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Asian Bank of the Year