The Philippines’ commercial banks have continued growing – some at unprecedented highs – in the past 18 months in spite of external shocks hitting a number of markets in Asia. Some universal banks were even targeted by overseas lenders in mergers and acquisitions (M&A) deals. And now, as local capital markets are breaking records in terms of bond issuance and M&A volumes, the investment banking business could be the next big area of growth for local lenders.
The past 12 months have not been an easy ride for emerging markets in Asia. The US interest rate rise at the end of 2015 triggered strong capital outflows from those economies that benefited from an influx of foreign money after the US and Europe started easing monetary policy to counter slow growth. Indeed, estimates suggest China’s capital outflow amounted to as much as $1000bn in 2015. Some currencies across Asia also weakened considerably on the back of expectations of a US rate rise for most of 2015. The Malaysian ringgit dropped by 18% versus the US dollar in that time period.