Banks build net green fees

IFR 2439 - 25 Jun 2022 - 01 Jul 2022
2 min read
Julian Lewis

Last year marked the first in which green bond fees exceeded those from fossil fuel deals, and new league tables of banks’ bond and loan fees shows most international players continuing to earn more from clean offerings than dirty.

But only a third of the top 20 firms generated as much as US$30m more from their green activity than non-green in the past 12 months, the Anthropocene Fixed Income Institute rankings show.

Moreover, three major banks still earned double-digit amounts more from their fossil fuel bond and loan underwriting over the period. These comprise Wells Fargo (US$42.9m net, according to AFII estimates), RBC (US$29.5m) and Mitsubishi UFG (US$12.7m).

Despite MUFG’s presence in the table’s lower reaches, Japanese banks were among the strongest movers.

Both SMBC and Mizuho rose four places on the combined bond and loan ranking. The former was placed third in the year to June 10 on the basis of its 5.8 point net green-to-fossil fee percentage. However, its estimated US$51.7m in net fees over the period placed it fifth behind BNP Paribas (US$107.2m), Credit Agricole (US$81.6m), HSBC (US$60.0m) and Deutsche Bank (US$56.7m).

Societe Generale was the bond ranking’s biggest mover, leaping five places to fourth on the basis of a 5.6 point net green-to-fossil fee percentage. This gave French banks three of the top four positions with Credit Agricole ranking ahead of BNPP thanks to a 13.8 point net green-to-fossil fee percentage. Its rival achieved a net 10.9 points, according to AFII estimates.

However, SG also fell five places to eighth on the bond and loan ranking with a net fee percentage of 2.2 points.

AFII created the rankings from publicly available data on public market transactions. It cautions that some banks “may be picking up [fossil fuel] exposure instead” from private deals such as bridge loans.