Asia-Pacific banks' debt issuance grew 25% year over year in June, fueled by mainland Chinese and Australian banks seeking to strengthen their capital positions.

The region's banks raised $24.31 billion in June, compared with $19.39 billion a year ago, according to data compiled by S&P Global Market Intelligence. But June's figure was down from $27 billion in the prior month. Mainland Chinese and Australian banks accounted for over 70% of the capital raised in June.

Asia-Pacific banks issued nearly $150 billion in bonds in the first half, surpassing $122.48 billion in the year-ago period, driven by increased capital-raising activity from major Chinese, Japanese and Australian lenders, according to S&P Global Market Intelligence data.

This aligns with broader trends in the region's capital markets. Although overall bond issuance growth slowed to 3.3% year over year in the second quarter, down from 11.6% in the first quarter, year-to-date issuance remains 7.2% higher than the first half of 2023, S&P Global Ratings reported July 29.

However, issuance remains concentrated in domestic markets as regional currency depreciation made offshore borrowing more expensive, according to Ratings.

Major issuers

In June, mainland Chinese banks, led by Agricultural Bank of China Ltd., issued seven debt offerings totaling $11.84 billion, according to Market Intelligence data. Agricultural Bank of China's $8.29 billion additional Tier 1 bond issuance was the largest offering by an Asia-Pacific bank in June. The global systemically important bank said it plans to use the proceeds to replenish its additional Tier 1 capital.

Bank of Tianjin Co. Ltd. issued $1.38 billion in debt, the second-largest transaction by a mainland Chinese lender in June.

Australia's four largest banks raised a combined $5.50 billion in debt capital across 12 transactions. Westpac Banking Corp. led with $2.24 billion across three offerings, followed by ANZ Group Holdings Ltd. with $1.22 billion. Just two of the 12 offerings completed by the four Australian banks in June were denominated in Australian dollars; the rest were denominated in foreign currencies, including British pounds, euros and US dollars.

Other notable issuances in the region included Japan's Mizuho Financial Group Inc., which raised $1.50 billion via two offerings, and The Korea Development Bank, which raised $1.05 billion.

Beenish Bashir contributed to this report.