KUALA LUMPUR (Dec 3): Many banks are likely to postpone further capital-raising plans until after the expected US Federal Reserve rate cuts, in order to benefit from lower borrowing costs, according to S&P Global Market Intelligence.
The firm said this after capital raised by Asia-Pacific banks plummeted to its lowest during the year at US$7.91 billion in October, as uncertainty over the US economic outlook weighs on the region’s financial institutions.
"Concerns over the US economic outlook are influencing Asian economies; expectations for Federal Reserve rate cuts are rising.
"Asian banks are likely to delay capital raising until after US rate cuts, to take advantage of lower rates" said S&P Global Market Intelligence.
The decline in October follows a peak in June 2025, when capital raising approached US$60 billion, and a strong US$24.25 billion in September, highlighting a sharp slowdown in fundraising activity.
Monthly trends over 2024 and 2025 show that debt has consistently dominated capital raising, with equity contributing only a small fraction in most months.
Debt issuance accounted for US$7.56 billion of October’s total. Australian banks were the largest contributors, with Commonwealth Bank Ltd raising US$1.47 billion and Westpac Banking Corp securing US$1.34 billion through non-convertible bonds.
Other notable debt issuers included State Bank of India (US$852 million); DBS Bank Ltd (Singapore); and United Overseas Bank (Malaysia) Bhd, which raised US$108 million, marking Malaysia’s participation in the region’s October capital-raising activity.
Equity financing in October was minimal, with only three banks tapping the markets: Seven Bank Ltd (Japan), DCB Bank Ltd (India), and Narayani Development Bank Ltd (Nepal).
Japan's Seven Bank led the equity deals with a US$338 million follow-on offering. Visual data shows that October’s bar in the monthly trend chart has almost no equity component, underlining the heavy debt bias in the month’s fundraising.
Meanwhile, economic growth in the region showed mixed trends.
The IMF projects Japan’s growth to slow to 0.5% in 2026, China to moderate to 4.2%, while India’s economy to remain steady at 6.4%. Analysts say the economic backdrop is likely influencing banks’ cautious approach to capital raising.