The breadth of the bank's capabilities can be seen in the sectoral and geographic diversity of its deal flow. Last year it lent in all five of the GCC markets where there were opportunities - there were no transactions in Kuwait. And among its deals were financings for an independent water and power project (IWPP), an oil refinery, a petrochemicals facility, wide-bodied aircraft and an aluminium smelter expansion. In fact, there were few mainstream project deals in the GCC last year in which HSBC did not participate at a senior level.

This is unlikely to change. The bank is in the process of reinforcing its regional dominance with the establishment of an investment bank in Saudi Arabia, which will be a joint venture with its local affiliate, Saudi British Bank. When operational, the subsidiary will offer HSBC a new window into what is likely to be an increasingly active project finance market, but also a new position from which to do regional transactions.

This year's league table shows significant moves by other institutions. French banks Credit Agricole Indosuez (CAI) and Credit Lyonnais (CL) provide an interesting story. The former has delivered on its promise to re-establish itself as a committed and frequent lender into the region. Its ability to do business off the back of its affiliate in Saudi Arabia, the active Banque Saudi Fransi, has contributed to its rise to second in the table, up from fifth last year. The merger of CAI and CL is now finalised, further boosting capacity. With the launch of the new brand, Calyon, imminent and the shuffling of responsibilities between the teams in London and Paris over, the new entity is well prepared and well positioned for a busy 2004.

Balance of power

Another significant shift in the balance of power has been wrought by the rise of the Japanese banking groups. Sumitomo Mitsui Banking Corporation, Bank of Tokyo-Mitsubishi and Mizuho Financial Group have worked their way up the rankings to lie third, fourth and seventh respectively. In 2002, they lay ninth, eighth and 15th. An appetite for sizeable underwriting tickets and a willingness to play prominent roles in syndication have underpinned their ascent, and the increasingly active secondary market for regional structured loans has given them more flexibility in their portfolio management than they have endured in the past.

The depth of quality shown by the rankings will reassure regional borrowers. Outside the top five positions are a number of strong institutions with proven commitment to the GCC. BNP Paribas is a powerhouse among lenders and its lowly position in this year's rankings is more a reflection of the timing of deals in its pipeline than any declining interest. Last year it came third, and will almost certainly be a top five bank next year. Equally, the likes of Societe Generale and ANZ Investment Bank are reliable and frequent lenders in the region.

The noises coming from some other international institutions suggest there might be some significant changes in the 2004 league tables. Past players such as ABN Amro, Barclays Capital and Citigroup have all been through periods of soul-searching over their attitude to the region and had comparatively quiet years in 2003. All three are understood to have concluded that they want a bigger share of the market. They have the capacity to seize it this year.