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Setting the benchmark
Credit markets whipsawed in 2016, driven by macro events and liquidity constraints, increasing demand for full-service provision. For its dominance of credit derivatives markets, its commitment to matching client risk appetite with investment opportunities and its ability to price and warehouse risk, JP Morgan is IFR’s Credit Derivatives House of the Year.
Sustained efforts
For equity derivatives businesses with a structured products bias, 2016 was a year of reassessment as demand for new paper dried up and the emphasis shifted to diversification. For beefing up its institutional flow operations, building US market share and putting sustainability at the core of its strategy, BNP Paribas is IFR’s Equity Derivatives House of the Year.
Service game
Rates made a big comeback in 2016, paying dividends for those that weathered a period of decline. For dominating the US dollar flow swaps market, expanding its global franchise and applying deep structuring expertise to solve complex problems and reduce client costs, Citigroup is IFR’s Interest Rate Derivatives House of the Year.
Proving its mettle
Oil prices endured a roller-coaster ride in 2016, making for a volatile trading environment that put commodity business models to the test. For consolidating its top-tier position through metals expansion and big-ticket structuring wins, Citigroup is IFR’s Commodity Derivatives House of the Year.
Record-breaker
DBS Group’s first US dollar-denominated Additional Tier 1 offering set a new record for the lowest coupon on any US dollar bank hybrid. Priced at the trough of the US rates cycle, that achievement looks likely to stand for some time.
Rock-bottom interest rates, quantitative easing and negative yields have turned the fixed-income investor universe upside down. How do fund managers make sense of these changes and how are they positioning their portfolios in response?
2016 couldn’t have been much worse for equity capital markets bankers: big spikes in volatility, intermittent periods of market closure, pulled deals and a collapse in fees. How have they weathered the storm, and how will they carry their injuries into 2017?
Chinese banks and brokers are taking over the Asian investment banking league tables, as more mainland issuers and investors turn to the international markets. Global rivals need to rethink their approach.
Big banks have lost more than US$60bn in their corporate centres in the last four years. Some critics say the units can mask the true performance of business divisions.
The rise and rise of the passive fund is yet another result of the low interest rate environment. And a worrying one.
A long-term commitment to re-balancing the Chinese economy should make the M&A boom more sustainable. But worries about capital flight and the renminbi’s weakness may force the authorities to put a stop to the party.
Fintech start-ups have mostly played around the edges of investment banks’ core activities – but not for much longer. The global financial full-service model was already creaking, but an Uber-style disruption to front-office activity is no longer a distant threat.
A growing realisation that over-enthusiastic and uncoordinated banking regulation is damaging the real economy, combined with the shock election victory of Donald Trump, is likely to see the regulatory onslaught of the post-financial crisis period lessen in intensity, if not reverse course.
