Thiam fights Europe’s – and Credit Suisse’s – corner in pointed rights-issue snub

By:
Clive Horwood
Published on:

Exclusion of leading US investment banks looks like a calculated move from Credit Suisse’s new CEO.

Tidjane Thiam photoshoot-R-600
In focus: Credit Suisse CEO Tidjane Thiam


Europe’s bank leaders are beginning to beat the drum over the need to prevent the dominant US investment banks having it all their own way in global capital markets.

First it was Société Générale CEO Frédéric Oudéa, then it was Barclays chairman John McFarlane, both talking last month of the need for Europe to have investment banks that mattered.

On Tuesday, at an FT Banking Summit, recently appointed Credit Suisse CEO Tidjane Thiam talked the same talk, saying that Europe cannot afford to see its investment banks shrink further without damaging the continent’s economy.

However, Thiam is also walking the walk. Take a look at the appointment of the global coordinators on Credit Suisse’s forthcoming SFr6 billion rights issue. The three lead banks are Citi, HSBC and SocGén. With all due respect to those three firms, they hardly represent the cream of the crop in global equity capital markets (ECM).

Citi lies sixth in the global ECM year-to-date league tables, according to Dealogic. HSBC is in 16th place, and SocGén a lowly 19th.

Now consider the banks above Citi. UBS is in fourth place. As Credit Suisse’s great local rival, it was hardly ever going to be in with a shout for a slot on the capital raise.

It all seems a bit pointed, doesn’t it?
Senior investment banker

And the banks ranked from first to third place? You guessed it – the big US banks: in order on this year’s league tables Goldman Sachs, Morgan Stanley and JPMorgan. Bank of America Merrill Lynch fills out the top five places.

So four of the five strongest global ECM houses, all based in the US, are not on the ticket. That’s right, they’re not even in the lower echelons of the syndicate. Euromoney understands that at least two of these firms, and probably all four, weren’t even invited to pitch for the mandate.

As a senior investment banker at one of the firms told Euromoney: "It all seems a bit pointed, doesn’t it?"

Further reading
Tidjane Thiam-R-160x186
Credit Suisse CEO
to split the bank

And it does seem that Thiam is making a point. There’s no doubt that the lead banks chosen will successfully place the discounted rights issue, despite the market now looking to consume a competing offer from Standard Chartered – lead managers chosen by former US investment banker and now StanChart CEO Bill Winters: JPMorgan Cazenove and BAML, natch.

However, is Thiam’s snub the start of a European fightback? Some investment bankers are perhaps reading too much into it, but one told us: "This tells you Credit Suisse still sees itself as a top investment bank, and a big player in the ECM space, including in the US.

"But it also tells you that they’re not so serious about global wealth management. If they were, surely they’d want a close relationship with the big US banks that can offer so much product and distribution?"

Credit Suisse lies eighth in the global ECM league tables, according to Dealogic.