Asia’s Investment Banking Boom 2025: Big Bonuses, IPO Surge & China Capital Gains

Recent data shows that 2025 marked a resurgence for investment banking in Asia, particularly in Hong Kong and greater China. IPO and follow-on activity surged, rejuvenated by regulatory tailwinds, strong fundraising flows, and large deals such as the BYD share placement and Contemporary Amperex Technology offering. This activity has fed into sharply improved revenues for banks with strong ECM and M&A franchises in the region. Citi, in particular, reported its highest Asia Pacific IB revenues in over a decade, up 33% from the prior year, as its clients raised more than US$250 billion globally.

This boom in revenue is now driving compensation resets toward 2021 levels. UBS, Citi, and Morgan Stanley are reported to be increasing bonuses for their Asia investment bankers by roughly 15-20% in 2025, led by greater China teams. However, while the boost is material, sources caution that bonus levels will still lag their 2021 peaks, when capital markets activity was even more elevated.

Strategic levers behind this rebound include a robust IPO pipeline (including dual‐listing A+H and follow-on offerings), regulatory reforms in Hong Kong listing rules (e.g. technology‐oriented channels), continued strength in TMT, EV, and AI sectors, and strong cross-border M&A activity including transactions between China, India, and the Middle East. Forward expectations are for sustained or growing momentum into 2026, though with caveats.

Risks and constraints remain. First, while fundraising is up, profit margins are under pressure due to competition and the demands of large underwritten deals. Second, macro variables like interest rate trajectories, geopolitical tensions (especially U.S.-China relations), and regulatory risk could dampen deal flow. Third, bonus distribution is likely to become more stratified: top revenue-generating teams, sector specialists and regions will disproportionately benefit, while support functions lag; morale and retention in non-front-office segments may suffer.

Strategic implications for banks with IB exposure in Asia include: doubling down on sector expertise (e.g. EV/AI/TMT), prioritizing cross-border dealmaking and sponsor/private equity relationships, investing in dual listing platforms and regulatory navigability, and balancing risk between originations vs trading and DCM given bond market fluctuations. Firms may also face pressure to maintain staffing and infrastructure in Asia to handle volume, even as cost pressures remain global.

Open questions include whether China’s regulatory environment holds steady, whether interest rates (both local and global) continue easing to support capital raising, whether new listings can sustain scales like 2021, and whether banks can keep reinvestment in back-office, compliance, and talent aligned with front-office gains.