In many ways 2014 was a bumper year for the investment banking industry. Although the year began with a few jitters as the US Federal Reserve changed guard and began to taper its purchases of government and asset-backed securities, asset prices across the markets quickly resumed their upward march of the past five years.
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Most investment banks spent another year under the hood fine-tuning their strategy and operations in the face of often confounding economic, business and regulatory changes. But one firm, having taken tough decisions to rebuild and remodel early, came into its own in 2014 and realised the gains of its endeavours with some glittering wins. Morgan Stanley is IFR’s 2014 Bank of the Year.
No bank can claim to be all things to all people in the bond world. But HSBC proved it could offer more things to more people than most, embracing and leading evolution and pushing the market to the next stage. HSBC is IFR’s Bond House of the Year.
The number of bookrunners seems to increase with every year that passes, but issuers are listening to fewer banks. While some just go along for the ride, Morgan Stanley prefers to lead from the front. Morgan Stanley is IFR’s Equity House and Americas Equity House.
For a truly global focus far beyond its North American roots, including an enviable international network that left the bank well-positioned for the long-awaited return of cross-border M&A, Citigroup is IFR’s Loan House of the Year.
Deutsche Bank clearly differentiated itself in the structured finance market this year. For successfully mixing origination expertise, innovative structuring techniques and demonstrating truly global distribution skills, the bank is IFR’s Structured Finance House and EMEA Structured Finance House of the Year.
As more stringent capital rules cut deeper in 2014, many houses became increasingly constrained by their past excesses. For those with a stronger capital position, there were many opportunities. For honing its focus as others questioned their future, and taking market share on the back of a client-centric approach, HSBC is IFR’s Derivatives House and Interest Rate Derivatives House of the Year.
After seven years at Moelis & Co, co-heads of restructuring William Derrough and Thane Carlston have put together a team with global reach and the depth of skill that makes it a formidable competitor. It stood out in another year of easy credit conditions by solving the trickiest problems, and is IFR’s Restructuring Adviser of the Year.
In a year in which political and market risks have intensified, one firm has stood out as the complete emerging markets bank, with its consistency across all borrower types and every developing region putting it ahead of its competitors. Citigroup is IFR’s Emerging Markets Bond House, Latin America Bond House and Emerging EMEA Bond House of the Year.
Investment banks have had to tear up decades-old strategies and rethink their purpose since the financial crisis. Their leaders tell IFR about the shape they are in now, what they think will happen next, and what the industry will look like after all the upheaval.
As a watershed year for global derivatives reform, 2014 saw one of the most ambitious strands of the Dodd-Frank Act finally come to life. Large swathes of the US$691trn over-the-counter swaps market were pulled out of the OTC shadows and into the bright lights of regulated exchanges.
Fines for previous misdemeanours reached all-time highs in 2014 as regulators became more assertive in extracting large settlements that, while eye-popping, wouldn’t break the banks. But with the last of the big scandals reaching a close, banks are hoping the era of penalties may be behind them.
Equities sales and trading is yet another area of European banking in the midst of upheaval. Regulators want banks to be more open with the way they price equity services, including research.
Holdout investors in recent years have done better than those that accepted the terms of sovereign debt restructurings. That has prompted renewed efforts to change the system, level the playing field and bind in defiant creditors. But can the reforms actually work?
Investors in banks could be forgiven for longing for simpler times. On established metrics banks look incredibly cheap. But a host of new rules around capital requirements and resolving failing banks, not to mention a host of untested debt structures, have left investors attempting to evaluate an unpredictable new world.
Japanese retail investors have tended to leap on the opportunity to buy foreign equity in public offerings without listing, yet relatively few IPOs end up including such a tranche. As investors from the country gear up to invest more abroad, Tokyo could become a more frequent stop for IPO roadshows.
All for one and one for all – that seemed to be Alibaba’s motto when it came time for the internet giant’s record-setting IPO. Levelling the playing field turned out to be good business for all concerned in the US$25bn deal.
The curious governance structure of Alibaba, the Chinese internet retailer, has focused attention on dual-class shares and how stock exchanges around the world should view corporate efforts to keep control at the top.
They may not quite be all the rage just yet, but Green bonds are an increasingly popular funding option for borrowers keen to do, or at least be seen to do, the right thing. They’re great PR and (usually) good finance. But do they actually help to make the world more green?