Best bank
BNP Paribas Best debt house
SG CIB
Best equities house
SG CIB
Best M&A house
Morgan Stanley
Best local partner
Rothschild
BNP Paribas will need to work hard to maintain its lead over SG as best bank in France but for now its position is safe. Its capital markets franchise, focused on corporates, is one of the biggest in the region, and the model seems to be working.
The firm is the biggest manager of syndicated loans in its home market, handling over a third more in volume than its nearest rival, the newly merged Calyon. In bonds, it may be slightly behind SG in terms of volumes, but managed 85 transactions, almost one-third more than its rival. And in equities, despite the inevitable confusion that has surrounded the creation of its new brokerage joint venture with Exane, it has maintained a respectable position.
Results from the first quarter of 2004 did indicate a hefty drop in capital markets revenues, which is thought to have come from the fixed-income businesses, but the bank insists client flows remain healthy.
Elsewhere in the firm, retail banking is growing steadily. Net profits for the first quarter of the year comfortably beat expectations, at €1.2 billion. BNP Paribas has repeatedly denied rumours that it is looking for big acquisitions but as the bank has €5 billion to €6 billion that it could spend without needing leverage, it is easy to see where the rumours come from.
Watch out for SG, though. Its retail and wholesale businesses are growing fast, if from a lower base. Its strategy to become a top 10 firm in European debt and equity is working, and it has a strategy to grow in products such as credit derivatives and services such as asset-liability management.
SG is the best equity house. It is on a par with BNP Paribas in terms of new issues – indeed they often work on deals together. But SG is not in the middle of a restructuring. The new Exane BNP Paribas has not yet been fully tested. Key transactions for SG include a convertible for Alcatel, which it did with CSFB, and an accelerated bookbuild for Renault, which it handled with Deutsche Bank and JPMorgan.
Of the non-French banks, JPMorgan and Deutsche Bank stand out in the debt markets. Deutsche in particular has been involved in some of the most high profile and complex transactions. HSBC has also had an impressive run. It has finally shown itself to be an integral part of the debt landscape, handling 86 debt issues in the period under consideration, which is many more than either BNP Paribas or SG.
But SG is still the biggest bond house. Highlights include a €5 billion deal for Michelin, on which it was the sole bookrunner, as well as a 30-year deal for Peugeot. It also boasts a good selection of structured deals and ABS transactions.
Morgan Stanley managed to maintain its leading position in M&A despite handling far fewer deals than key competitors. Its cross-border capabilities are impressive. It advised Canadian firm Alcan in its hostile bid for Pechiney. Domestically, it assisted Wanadoo when France Telecom bought a minority stake.
Rothschild takes the best local partner award. It doesn’t only do the largest number of M&A deals in France, it is also involved in the country’s biggest transactions. As ever, it is an important part of the corporate finance landscape.
