Foreign banks’ involvement in initial public offerings in mainland China has fallen to its lowest level in more than a decade, in a sign of the difficulties they face retaining a foothold in the country’s closed-off financial system, reports the Financial Times. So far this year, foreign banks have been involved in just $297 million worth of new listings, or 1.2% of the total. The proportion is lower than in any full year since Dealogic began collecting the data in 2009, when the banks were involved in about half of total listings by value. Last year’s 3.1% represented the third-worst year on record.
Not a single US bank has been involved in the 109 IPOs in China’s vast stock market in 2023, where a total of $26 billion has been raised to date in deals that frequently attract massive demand from domestic investors. Only Credit Suisse and Deutsche Bank have acted as bookrunners this year.
While the operations of foreign banks are dwarfed by mainland competitors, the data reflects their struggle to hold on to a meaningful presence in a fast-evolving but insulated market with different regulatory and due diligence requirements. Severe COVID-19 restrictions over the past three years limited access to the country, adding to the distance between mainland subsidiaries and their overseas headquarters.