Asian lending cut by 66% in 1998 as economies slump
Asian lending cut by 66% in 1998 as economies slump
HONG KONG (Bloomberg): Banks cut lending to Asian companies
and governments by two-thirds in 1998 from 1997, as international
lenders decided not to sink any more money into a region where
defaults were already rife.
One of the biggest retreats came from HSBC Holdings Plc, the
U.K.'s largest bank and still one of the most active lenders in
Asia. It took part in syndicated loans in the region worth US$2.6
billion in 1998 compared with $9.2 billion in 1997, a 72 percent
decline, IFR Securities Data Co. said over the weekend.
In all of Asia, syndicated bank loans totaled $56.3 billion
last year, compared with $128 billion in 1997, IFR said.
Excluding Australia, total syndicated lending -- loans shared by
more than one bank -- in the region amounted to $36.4 billion,
about 66 percent less than the $106.4 billion a year earlier.
"China, Hong Kong and Malaysia showed sharply lower volume
figures in comparison to previous years," said a statement by
IFR-SDC, a firm that tracks financial market transactions.
"More severely affected were Indonesia, Thailand and South
Korea, where virtually no bank credits were extended to the
corporate sector in the whole of 1998."
Still, some banks increased the amount of credit sold to
companies in the region.
Citibank NA, a unit of Citigroup Inc., was the top arranger of
Asian syndicated loans, with transactions worth $6.12 billion
completed in 1998, equal to a market share of almost 11 percent
and more than the previous year, according to the IFR figures.
Chase Manhattan Corp. came in second place with $5.2 billion
and a market share of 9.2 percent. Most of these two banks' loans
were made to Australian borrowers, IFR said.
Taiwan was the only country in the region to receive more
lending in 1998 than in 1997. Syndicated loans to Taiwan-based
companies and projects totaled $7.20 billion, about 5 percent
more than the $6.84 billion loaned in 1997.
The sale of debt securities, including U.S. dollar-denominated
bonds and floating-rate notes, almost stopped completely.
"The Asian FRN market virtually disappeared," IFR said. There
was a "handful" of issues in 1998, against 120 totaling $13.9
billion in 1997. Fixed-rate issuance dropped to $7.20 billion in
1998 from $25.7 billion in 1997.
Following are the top lenders in various countries:
Top Arrangers of Asian Syndicated Loans
Bank Loans Amount (billions) Mkt share(%)
Citigroup 58 $6.15 10.96
Chase Manhattan 37 $5.17 9.20
ABN Amro NV 62 $3.59 6.40
BankAmerica Corp. 46 $3.20 5.69
HSBC 33 $2.56 4.73
Top Arrangers of Asian Syndicated Loans Ex-Australia
Citigroup 55 $5.87 16.14
BankAmerica 43 $2.94 8.07
HSBC 33 $2.66 7.31
ABN Amro 57 $2.32 6.37
Warburg Dillon Read 7 $1.32 3.64
Top Lead Managers of Asian Fixed-Rate Bonds (including Japan,
excluding Australia)
Goldman Sachs 19 $4.45 21.3
Morgan Stanley 10 $2.39 11.4
Salomon SB 18 $1.98 9.4
Warburg Dillon Read 11 $1.88 9.0
Nomura 7 $1.71 8.2
Top Arranger of Syndicated Loans in
Australia Chase Manhattan ($3.63 billion)
Hong Kong HSBC ($1.26 billion)
China HSBC ($860 million)
India BankAmerica ($376 million)
Malaysia Citibank ($350 million)
Philippines Philippine National Bank ($610 million)
Korea Citigroup ($390 million)
Taiwan Citigroup ($2.37 billion)