RHB Sees Boost to Investment Banking From Equity Deal Revivalby
Investment bank seen contributing up to 35 percent of revenue
Plans to create small Singapore financial institutions team
RHB Bank Bhd., Malaysia’s fourth-biggest lender by assets, expects a boost to its investment banking revenues next year from a revival in regional equity deals and continued growth in bond market offerings.
The investment bank’s contribution to group revenue is projected to reach as much as 35 percent in 2017, from an estimated 25 percent to 30 percent this year, as the global economy improves and oil prices stabilize, Robert Huray, the firm’s head of investment banking, said in an interview in Kuala Lumpur last week.
“We are definitely getting more inquiries on the equity capital market,” said Huray, 41, who became RHB’s investment banking head in July. “We have seen a very strong pick-up compared to last year based on the number of mandated and pipeline deals, easily double for Malaysia and Indonesia. We also have a strong pipeline in Thailand.”
The bank, which is using Singapore as a regional hub to manage deals in Indonesia and Thailand, plans to create a three-person financial institutions team in the city-state to generate more business in the three countries, Huray said.
That’s a contrast to global investment banks such as Goldman Sachs Group Inc. and Barclays Plc, which have reduced their presence in Singapore. Fellow Malaysian lender CIMB Group Holdings Bhd. has also been cutting its investment banking operations.
Equity, equity-linked and rights offerings in Southeast Asia have dropped to $23.9 billion in the period to Nov. 4 this year, from $30.8 billion in the same period of 2015, according to data compiled by Bloomberg. Local currency bond issues rose to $57.9 billion from $45.9 billion over the same time-frame.
RHB ranks fifth for Southeast Asian local-currency bond sales this year with deals valued at $3.3 billion, or a 5.9 percent market share, the data show. The firm is poised to end the year two steps lower than in 2015, after CIMB Group Holdings Bhd., Malayan Banking Bhd., DBS Group Holdings Ltd. and Krung Thai Bank PCL. For regional equity and rights deals, it’s placed 15th, behind market leaders UBS Group AG, Maybank and Deutsche Bank AG.