S&P Global: Asia-Pacific banks debt issuance slows in Sep. ’24

Asia-Pacific banks saw a significant decline in debt issuance in September 2024, marking the lowest monthly figure for the year. This slowdown follows a period of robust activity in the preceding months.

Banks in the region issued $15.03 billion in debt securities in September, up from $13.03 in 2023 but lower than previous months, according to S&P Global Market Intelligence data.

Debt issuance in September was lower compared to the previous two months as banks had issued more bonds in August to prepare for the redemption of existing bonds in September.

Banks experienced a peak in bond maturities in August and September, leading to higher issuance levels in July and August. In August, Asia-Pacific banks raised $18.30 billion, while in July, they raised $22.13 billion.

Asia-Pacific banks raised $214.35 billion through debt securities in the first nine months of 2024, surpassing the $162.66 billion raised in the same period in 2023, the report showed.

Australian and Japanese lenders jointly issued $8.60 billion in debt securities in September, accounting for more than half of Asia-Pacific banks’ total debt issuance. This offset the absence of major Chinese banks in the capital market.

In September, Australian banks like Commonwealth Bank of Australia, Macquarie Bank Ltd., and ANZ Group Holdings Ltd. issued $5.09 billion in debt securities.

Japanese lenders, including Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Trust Bank Ltd., raised $3.51 billion during the same period.

However, major mainland Chinese banks did not participate in the capital markets in September, impacting the overall volume. Only China Bohai Bank Co. Ltd. and Shengjing Bank Co. Ltd. issued debt securities, raising a total of $2.40 billion.

Major Chinese banks may receive a capital injection from the government instead of relying on debt issuance, according to Yusuke Miura, a senior economist at NLI Research Institute.

The People’s Bank of China’s (PBC) rate cuts could also make it easier for banks, especially regional ones, to issue debt like perpetual bonds to boost their capital ratios.

Attribution: S&P Global report

Subediting: M. S. Salama