• Abstract and Figures
• Public Full-text

The Banker invesTmenT Banking awards | 2010 With the tWo-year anniversary of Leh- ment Banking Awards entries – with some of man Brothers’ demise just passed, invest- the closest competition in categories such as Investment ment banks still face a difficult environment. sovereign advisory, restructuring, risk man- If the crisis is over, long-term challenges have agement and bank capital. Banking intensified. Banks await the final shape of US Other themes are a hangover from the financial reform as legislators tinker with financial crisis. The Lehman bankruptcy was Awards implementing the provisions of the Dodd- followed by confusion about the client assets Frank Act. And while they heaved a sigh of held in its prime brokerage; this year, the relief at the general thrust of Basel III, ques- protection of client assets in newly created 2010 tions remain about what will happen to por- bankruptcy remote vehicles was a central tions of bank capital – such as lower Tier 2 pillar in prime brokerage entries. and other subordinated instruments. And while investment bankers remain Some believe that banks’ recovery from under fire for anything from black-box trad- the crisis may already have peaked. With ing to outsized bonuses, the value they add to developed world economies still sluggish, clients was written in bold in our entries. The high-profile bank analyst Meredith Whitney quality of the entries – and the effort for cli- has predicted that securities firms around ents that they represent – has never been the world will have to cut as many as 80,000 higher. And this year, we saw more evidence jobs in the next 18 months as revenue growth than ever before of integration across banks’ begins to slow. businesses; solutions for clients that drew Against this uncertain backdrop, mar- expertise from multiple business silos, and kets continue to be jittery and unpredictable, often across multiple geographies. swinging from risk aversion to risk appetite. Every year The Banker’s Investment At the same time as equity markets suffer Banking Awards try to move away from from such volatility, leveraged buy-out funds measuring quality only by scale, to focus in are back in business. Few bankers are pre- on genuine value creation for clients and pared to say where they think markets will be markets. Our distinguished panel of inde- in one month, let alone six or 12 months. pendent judges – whose knowledge and skills come from every area of the market CerTainTy amid unCerTainTy and every part of the globe (see page 56) – Getting things right in such choppy waters is were looking for transactions that generate no easy task, but if the entries for The Bank- real cost savings, real risk reduction or real er’s Investment Banking Awards are any- returns for clients. thing to go by, the world’s investment banks Yet again, The Banker’s awards showcase are doing a fair job. All of the global econo- the tremendous value that this industry can my’s key themes were evident in the Invest- deliver. Categories ■ Most innovative investment bank ■ africa ■ retail structured products ■ Most innovative investment bank ■ Western europe ■ structured finance for corporates ■ Central and eastern europe ■ initial public offerings ■ Most innovative team ■ the Middle east ■ Loans and leveraged finance ■ Most innovative investment bank ■ islamic finance for growth companies Most innovative investMent bank for: ■ infrastructure and project finance ■ Most innovative boutique ■ bank capital ■ Prime brokerage ■ bonds ■ asset and liability management Most InnovatIve InvestMent Bank ■ Climate change and sustainability ■ restructuring FroM: ■ Commodities ■ risk management ■ Latin america ■ equity linked ■ foreign exchange ■ north america ■ equity derivatives ■ Mergers and acquisitions ■ asia ■ interest rate derivatives ■ inflation products 54 | The Banker | October 2010 2010 | The Banker invesTmenT Banking awards mosT innovaTive invesTmenT Bank winner: CrediT suisse When the Banker made Credit Suisse its past year, the bank has been building out – comprising the heads of the largest coun- Investment Bank of the Year in 2007, some rates, FX and credit, and the flow business tries and products, and regional CEOs – considered it a premature choice. Brady associated with those. which will meet regularly to share best Dougan had only just taken the helm at “Last year, we increased our sales force practice and generate opportunities. group level and the bank was still in the by a third and invested in our technology This is much more than a talking shop, early stages of its new strategy. platforms. As a result, we are starting to see says Mr Varvel. “The structure ensures real Now, its investment bank is increasingly market share and revenue gains and expect connectivity between regions and businesses held up as a model that others should emu- that to build in the coming year,” he says. and makes the country CEOs accountable late. It has a conservative model based on “Given our brand and momentum, increased for growing cross-border business. It makes capital efficiency and low risk. It has led the share is for us to take, but it will come down it much easier for each country CEO to tap industry in terms of transparency about to how well we execute.” into the bank’s global network to execute market positions. It has applied fresh think- business for their clients, for example; per- ing to the dialogue about compensation. emerging markeTs push haps finding an anchor investor that a client There can be little doubt that the bank’s The biggest push, however, is building on needs for an initial public offering. We are new model is working. For four of the past Credit Suisse’s existing strength in the seeing a lot of connectivity across markets five quarters, pre-tax returns on capital emerging markets. The bank has rethought from Asia to the Middle East to Latin Amer- within the investment bank have been how it organises the business. Previously, ica. The Council brings together the knowl- between 37% and 40%. In 2009, the bank’s emerging markets were lost inside product edge of our clients and the capabilities of the return on equity was 18% – second only lines and regional businesses, now the bank bank in a systematic way.” to Goldman Sachs at 23%; in the first has broken it out as a separate business and quarter of this year that rose to 22%. strategy. A central pillar of that is the cre- meeTing Challenges Yet while Goldman had risk-weighted ation of a Global Emerging Markets Council There are challenges ahead. But the bank is assets of $432bn, Credit Suisse had RWAs approaching them with what is fast becom- of just $215bn. ing a Credit Suisse characteristic: creativity. Credit Suisse’s success is evident in the The new conservative capital model league tables, where it has top 10, and often puts constraints on the business; capital top five, positions in most of the major busi- efficient also means capital light. In one of ness lines. It may not be generating the its businesses, the bank has come up with a very highest revenues, but this is not the clever solution. Credit Suisse used to run a point, says Eric Varvel, who took over as large structured credit book in the emerging CEO in June. markets, providing seed capital to clients “Our model is not built to drive the high- that could not raise it in the public markets. est revenues or the highest return on equity Under its new capital efficiency regime, a in a single quarter or a single year. It is big structured credit book is out of the ques- designed to provide attractive returns to our tion. To ensure it did not lose those clients, investors over a cycle.” the bank raised $750m from its shareholder That does not mean that the bank is not base – adding to its own capital of $250m – focused on growth. Mr Varvel believes that to create the Emerging Markets Credit both top-line revenue and market share Fund, which will be managed by Credit growth is there for the taking. It has seen Suisse specialists out of the asset manage- some good upward movement in its invest- ment business. ment banking business. In the US, where it “This third-party capital model gives us had been lagging behind its competitors, an additional means to provide capital to management changes and senior hires have Our mOdel is nOt built tO emerging market corporates, leveraging our paid off. It has also seen gains across its strong track record in emerging markets drive the highest revenues equity businesses, and Mr Varvel says credit,” says Mr Varvel. the bank is well positioned to capitalise Or the highest return On As risk appetite returns, Mr Varvel says on the return of risk appetite and greater the bank is under no illusions that its con- equity in a single quarter clarity around regulatory and political servative model may make it hard to “over- developments. Or a single year. it is achieve” in comparison to competitors who Similarly, Credit Suisse has some strong take on more risk. But that is the point, says designed tO prOvide fixed-income businesses – including resi- Mr Varvel: Credit Suisse’s business will be dential mortgages and leveraged finance – attractive returns tO less risky. “We have created a different and given market positions, and increased model, one focused on clients and capital Our investOrs Over a cycle volume and activity in both businesses, Mr efficiency that takes less illiquid and propri- Varvel expects significant gains. Over the Eric Varvel etary risk than many of our competitors.” October 2010 | The Banker | 55 The Banker invesTmenT Banking awards | 2010 telecommunications service provider. Previous banking firms worked for Investment Banking include Salomon Brothers and BZW.

Load more

  19

Copy Link