1/4/22, 3:30 PM UK banks lose share in EMEA loans as market concentrates

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UK banks lose share in EMEA loans as market

concentrates
Jon Hay
December 20, 2021 04:56 PM

Trends persist through Covid upheaval

The top players in the EMEA investment grade loan market are changing, with new banks pushing their way into the top
echelons and others slipping away.

The coronavirus pandemic shook up the market, as some banks found themselves constrained, while a few took
advantage of companies’ urgent needs for capital to expand their lending.

The best known example in 2020 was BNP Paribas, already the top bank over the preceding five years from 2015 to 2019,
with a 5.1% market share, which managed to grow its share 80%, to an exceptional 9.2%, according to Dealogic data.

Santander leapt from 13th in the league table to 6th, expanding its share by two thirds from 2.3% to 3.8%. But Crédit
Agricole also had a good crisis. Although it only rose one step in the league table, to 2nd, it enlarged its share from 3.6%
to 5.5%.

Nearly one year on, it is possible to see which of these changes from the Covid crisis have been sustained, and which
underlying patterns are visible, behind the Covid noise.

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1/4/22, 3:30 PM UK banks lose share in EMEA loans as market concentrates
Most of the Covid winners, such as BNPP, Santander, Agricole and JP Morgan, have held on to some, but not all, of their

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market share gains. The exceptional bump they got in 2020 has worn off, but left them larger players than before.

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An exception is Sumitomo Mitsui, which charged from 16th to 9th in 2020, but has fallen back to 16th this year, with
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exactly the same 2% market share as it had in 2015-19.

But there are also trends which have continued through Covid, rather than appearing to be caused by it.

These include a marked decline from prominence of the UK banks. In the five years to 2019, HSBC averaged 2nd place in
the league table, while Barclays was 7th.

NatWest Markets — already much diminished since its heyday — and Lloyds were near the bottom of the top 20.

Now, Lloyds and NatWest are in the 30s, Barclays is 17th and HSBC ninth. The trend is only bucked by Standard
Chartered, which has grown its market share from 0.9% to 1.6% and entered the top 20. (See table, which shows all
banks that have been in the top 20 for any of the three periods examined.)

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1/4/22, 3:30 PM UK banks lose share in EMEA loans as market concentrates

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The French banks have been gaining. The top four, BNPP, CA, Société Générale and Natixis, have all grown market share,
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pushing the quartet from a combined market share of 14% up to 2019 to 18%.
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Even bigger winners, though, have been the US banks. Three of them are established top 20 bookrunners — Bank of
America, Citigroup and JP Morgan. Since 2020, first Goldman Sachs and now Morgan Stanley have bust into the top 20.

They are now collectively just a whisker behind the French four and this does not include Wells Fargo, which climbed this
year to 33rd with a 0.5% share and has ambitions in European capital markets.

The 2021 league table is skewed by the year’s salient

M&A loan, for Vonovia’s purchase of Deutsche
Wohnen, led by Deutsche Bank, Morgan Stanley and
SG. They benefited mightily from this, partly because
the deal involved two loans, one replacing the other,
which souped up their league table credit.

Nevertheless, all three firms have performed strongly

— the revival of Deutsche is particularly noteworthy,
after a long period of halting performance in
European investment banking.

The Japanese banks, which once seemed to be steadily climbing up the league tables, have stalled. The top three
institutions’ combined market share of 5.8% this year is lower than they enjoyed in 2015-19.

The four biggest Chinese banks have not made substantial headway, having still a combined market share of about 1%.

Underlying the hubbub of bank competition is another trend, which has continued through the disruption of Covid.
Syndicated loan bookrunning has become more concentrated in the hands of the biggest players.

The most visible jolt was in 2020, when the market share of the top five banks leapt from 20% over the preceding five
year period to 28%. Only half of that was the spurt put on by BNP Paribas.

But the top five’s market share this year was 25.8%, again substantially higher than in the past. Part of this is due to SG
and DB’s roles on the Vonovia deal — but it shows that the ability to underwrite big tickets for M&A and other pressing
corporate needs is separating the biggest banks from the rest.

Market shares look more stable in the lower rungs of the top 20 — but the overall share of the top 20 is telling. It has
grown from 56% pre-2019, to 62% in 2020 and 63% this year.

All tiers of lower ranked bookrunner have lost market share since the 2015-19, but not catastrophically — their combined
share has declined from 21% to 19%.

The segment of the market that has shrunk most is deals with no bookrunner league table credit, such as club loans.

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1/4/22, 3:30 PM UK banks lose share in EMEA loans as market concentrates

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Jon Hay
Last updated on December 20, 2021 04:56 PM

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