Regional Awards for Excellence 2014: North America

Best bank in the US	Wells Fargo
Best investment bank in North America/The US	Bank of America Merrill Lynch
Best debt house in the US	Bank of America Merrill Lynch
Best equity house in North America	Goldman Sachs
Best flow house in North America	Goldman Sachs
Best M&A house in North America	JPMorgan
Best risk adviser in North America	Deutsche Bank
Best transaction services house in North America	Bank of America Merrill Lynch
Best bank in Canada	TD Bank
Best investment bank in Canada	RBC Capital Markets
Awards for Excellence 2014: Results index

Best bank in the US

Euromoney’s best bank in the US for 2014 is Wells Fargo. It serves one in five households in the US, as well as more small businesses than any other bank. It’s an enormous enterprise, with 6,200 branches across the country and $1.07 trillion in deposits, yet it continues to operate with the same feel and eye for detail as a community bank.

“We’ve always been about building teams that are focused on serving the customer and community and who have that passion and care for their communities,” says Carrie Tolstedt, executive senior vice president for community banking (retail banking) at Wells Fargo, and she can back up those words with statistics. Its team member engagement ratio (how involved, guided and appreciated employees feel) is six times higher than that for the US working population. That translates to the bottom line, and its earnings reflect the bank’s successes at attracting more customers and cross-selling more products. At the end of the first quarter, deposits were up $91 billion year-on-year, and earnings for the whole group were a record of $5.9 billion. Loans were also up.

“Last year and the first quarter of this year we had good gains in primary checking customers, which suggests to us that more consumers are choosing to bank with us,” says Tolstedt.

Wells Fargo also manages the balance between customers and shareholders that often fails banks. Over the first quarter it returned $2.6 billion to shareholders through dividends and share repurchases, while its credit quality improved and its equity tier-1 ratio increased.

Unlike some banks that have slashed their branches, Wells Fargo has a more tailored approach – adapting branches, adding branches in more suitable areas and removing those that are unnecessary, and they generate more deposits than any of its largest competitors. Tolstedt says it means having to be innovative and react to customer demand. “Last year we worked on innovating around the multichannel customer experience and we introduced the neighbourhood bank in Washington, DC. This store format, at approximately 1500sq feet, has upgraded ATMs and tablets for team members to use as they serve customers. So smaller square footage, but still a high level of personal service for the customer.”

Best investment bank in North America/The US

It seemed an unlikely merger back in 2008, but persistence sometimes pays off. Despite ups and downs in league tables, Bank of America Merrill Lynch has just kept pressing on, focusing on a deal at a time, and it has emerged as heavy hitter in every area of investment banking and capital markets. It wins Euromoney’s award of best investment bank in North America/the US this year.

Best debt house in North America

Under Christian Meissner, head of global corporate and investment banking, the firm has been building a platform that ensures it can provide solutions to large multinationals in every asset class, in every region. “We can provide M&A advice, provide the bridge, help derisk the bridge in the equity, bond and loan markets, and do it as one-stop shop,” says Jim Probert, head of global capital markets. Indeed a glance at the league tables in the US shows BAML as a top-four player in ECM, DCM and M&A over the last year. The only other bank to boast that standing is JPMorgan, against which BAML competes as a balance-sheet bank. Where BAML differs, however, is in its drive. Since the merger of the two firms, the bank has had something to prove and its lack of complacency has driven it to innovate – particularly in fixed income. In green bonds it has been a leader, and across the credit spectrum with a range of issuers the bank has been consistent in its debt capital markets capabilities also earning it the award for best debt house in North America this year.

“Our platform is such given we are an amalgamation of many companies and can reach into a broad net of issuers – sponsors, double-B financings, large and mid-caps, and we don’t shy away from tough or small deals,” says Stephan Jaeger, co-head of leveraged finance capital markets.

Such as the debt financing for Platinum Equity’s acquisition of Volvo Rents in December, followed less than a month later by the edgier holdco PIK dividend deal that stunned markets – it was one of the quickest dividend deals to ever come to market following an acquisition.

BAML also led a unique deal for Chrysler Group. Following Fiat’s acquisition of the remaining equity stake in Chrysler, BAML acted as left lead bookrunning manager for Chrysler’s $2.755 billion add-on notes – with each tranche representing the largest add-on ever completed in the high-yield market.

The bank’s position in high yield is almost untouchable. In the first quarter of this year BAML boasted a 25% market share in US high yield as left lead. JPMorgan ranked second with a share of just 17%. BAML is also a leader in investment grade and was left lead on landmark deals over the period such as Verizon’s $49 billion bond to finance its acquisition, Tenet Healthcare’s $4.6 billion deal in September last year and Cisco’s $8 billion deal in February. The bank is still the number-one placement agent in debt private placements, thanks to its enormous distribution network. It also led 72% of the hybrid and preferred transactions over the period and ranks first as a dealer in US commercial paper.

In North American M&A, BAML’s ability to provide financing was evidenced with the Loblaw’s C$13.1 billion ($12.4 billion) acquisition of Shoppers Drug Mart. BAML underwrote bank facilities consisting of a C$3.5 billion five-year term loan, the largest Canadian dollar term loan ever underwritten, and a C$1.6 billion 364-day bridge loan. BAML was also an adviser in the largest deals of the year such as Heinz’s sale to Berkshire Hathaway and 3G Capital, and Verizon’s acquisition of Vodafone assets.

In ECM, BAML has been a top-two bookrunner for IPOs and equity offerings and has demonstrated its ability to offer advice and execution across different sectors and structures. BAML was the joint bookrunner and stabilization agent on the largest block trade of this year for Neilsen Holdings. BAML was also involved in all parts of the $495 million IPO of NRG Yield – the largest US power company IPO in over 10 years. BAML was lead left bookrunner, lead structuring adviser, roadshow logistics coordinator, billing and delivery agent and stabilization agent.

Best equity house in North America

In equities, it is Goldman Sachs, however, that stands out as a leader over the last 12 months, winning best equity house in North America. From June 2013 to May 2014, the investment bank was bookrunner on 233 deals, with a 12.5% market share of north America equity deals by dollar size. Over 2013 the market was up 30% and across all products issuance increased.

“Given the macro environment, corporates and sponsors looked to access the market via IPOs and follow-ons,” says John Daly, head of the Americas equity capital markets group for Goldman Sachs. And the supportive environment encouraged issuance across all sectors and in all products. That made it a successful year for Goldman, which showed its strength across all products (IPOs, block trades, follow-ons, equity-linked and convertibles).

For the full year 2013, Goldman’s market share was 14.5% – with the next competitor at around 12%. “While we have strong competitors in every sector and product, we often meet different competitors depending on the sector or product, so last year we were really able to show the breadth of our franchise across industry sectors and products,” says Daly. While the likes of the Twitter IPO caught headlines – Goldman was lead left on the $2.1 billion IPO of the social media company – it was also an active bookrunner on the $2.9 billion IPO of oil pipeline holding company Plains GP in October – an example of the firm’s abilities in execution, which it led with Barclays and JPMorgan. It was the largest IPO of a US company since Facebook.

Client satisfaction is evident in the amount of follow-on business Goldman Sachs wins. The firm was bookrunner on electric car design and manufacturer Tesla’s $2.3 billion convertible offering in February. For Constellium, the bank led the aluminium company’s IPO last May and then led four subsequent follow-ons. In the convertibles market, which is booming as investors search for yield, Goldman Sachs has been the most prominent player in the US. In May, with RBC, it launched a $1.3 billion convertible for exploration company Cobalt after a one-day book build.

Best flow house in North America

Goldman’s execution in deals is evident from the number of times it is appointed as stabilization agent. For the largest deals, the investment bank is the agent of choice, pointing to its trading prowess and issuer confidence. It is not a role the bank would be appointed to were it not a powerhouse in flow trading, and this year Goldman Sachs wins Euromoney’s award for best flow house in north America. Pablo Salame, global co-head of the securities division at Goldman Sachs, says the gap is widening between the top-tier market makers/liquidity providers and those in the middle-tier (six to 10 positions) as clients are consolidating their execution providers. “There have been such rapid shifts in modes of execution across all asset classes that it has been imperative to be able to adapt and embrace change while remaining thoughtful about market structure. We’ve been very cognizant about educating clients through the process and being transparent to the change. That’s helped us gain market share.” Goldman Sachs is also one of the few players to remain consistent with its message and strategy.

Salame adds: “Increased capital requirements have resulted in some players exiting some asset classes. With the sole exception of the bespoke correlation businesses in mortgages and credit where we thought customer demand would not return, in all other areas of client intermediation we have tried to maintain consistency and adjust resources if necessary rather than exit. That has helped increase our market share in certain areas. Clients hopefully feel confident that we aren’t distracted and recognize that we are not confused about who we are and what we do.”

Best M&A house in North America

The return in equity markets had a knock on effect for M&A. After several years of quiet, M&A returned last year with landmark deals such as Verizon’s $130 billion acquisition of the remaining 45% share of its wireless joint venture with Vodafone. “That deal crystallized the fact that companies had become willing to make large strategic acquisitions that made sense and were additive,” says Chris Ventresca, global co-head of M&A at JPMorgan. This year his firm wins the award for best M&A house in north America. JPMorgan took part in 155 US M&A deals over the period with a 38% market share by dollar amount. “We recognized that during the middle of 2013 there was a shift occurring where US corporates, having been focused internally and returning capital to shareholders, were beginning to look at driving growth in their companies,” says Ventresca. “That started to match up with historically low debt rates and receptive equity markets so we focused relentlessly on strategic dialogue with clients.”

The period over 2013 and the first half of this year also provided the opportunity for divestitures. An emerging theme has been companies looking hard at their portfolio of businesses, deciding what is core for them longer term and then spinning off or selling non-core businesses. JPMorgan was adviser to industrial manufacturer ITW on the sale of its industrial packaging business. The firm also advised Johnson & Johnson on the sale of its Ortho Clinical Diagnostics unit. “It has been a great M&A market and still is for deals such as these,” says Ventresca. “Private equity and strategic buyers are hungry acquirers for those types of assets. Shareholder activism has also encouraged companies to be more discerning about their portfolios.”

Best risk adviser in North America

When it comes to advising investors on how to manage risk, it’s hard to find a firm more innovative than Deutsche Bank and this year it wins the award of best risk adviser in North America. Its trading breadth across asset classes as well as balance sheet enables the firm to turn its hand to solutions across diverse sectors of the market. Last year it created a new US residential real estate ABS asset class with the first-ever single-family rental bond launching in November.

The $479 million transaction, Invitation Homes 2013-SFR1, was the first securitized US residential mortgage deal in five years and the first-ever US deal backed by rental income from properties bought by Blackstone. “It has essentially put a floor under the single-family housing market, which was collapsing due to displaced homeowners, and reduced credit scores and provided a new asset class to investors,” says Jay Steiner, head of ABS banking for the Americas. Nobel Prize winner and housing market expert Robert Shiller tweeted on the day the transaction was priced that it could mark a revolution. Of the seven tranches, some were 15 times oversubscribed.

For asset managers across the US, Deutsche Bank introduced maestro overlay for hedging that took off last year. It allows hedge fund managers with US-based strategies to offer a separate share class with overlay for foreign investors to protect themselves against currency fluctuations. “There is a lot of capital raising going on in US strategies right now from overseas investors yet concerns about currency risk so the overlay provides a solution,” says Hans Ephraimson, head of FX/commodities/short duration sales, Americas at Deutsche Bank.

Rich Herman, co-head of FIC at Deutsche, says: “The US is growing and is an important business to us, so we have been hiring into the region while a lot of banks have been reducing headcount. What we have always done well is to provide balance sheet with know-how, and risk management is really a key strength for us.”

Best transaction services house in North America

It’s a powerful combination of scale, capability and depth and breadth of client coverage across north America, together with an ability to collaborate among business lines to create and execute individual solutions for clients of all sizes that underpins Bank of America Merrill Lynch winning the best transaction services house in north America award this year.

BAML has relationships with some of the most important companies across the US – it banks 97% of the US Fortune 500 companies, for example – and Canada, where BAML has been expanding its transaction services business in the past year. From small and middle-market companies, to large multinationals, financial institutions and public sector institutions, BAML’s client franchise is one of the most comprehensive too.

It is this scale together with an integrated and collaborative approach to working with such clients in areas including liquidity management, payments and receipts, trade and supply chain finance, foreign exchange, commercial card services and custody/agency services, that makes BAML standout.

“We leverage every resource to create custom, integrated solutions that help our clients run their businesses more efficiently,” says Dub Newman, head of global transaction services, north America, at BAML. An example is the solution BAML delivered to Carolinas HealthCare System, one of the largest and rapidly growing healthcare providers in North and South Carolina. Its expansive physician network brought collection processing challenges that impacted operational efficiency.

However, BAML created an innovative solution, helping them to transform their operations and increase their auto-posting rate, hereby enhancing operational efficiency. CHC were pleased as punch with the solution.

“They [BAML] transformed our operations in ways that, quite frankly, changed our world,” says Patrick Griffin, vice-president, patient financial services, Carolinas HealthCare System.

BAML has also been at the forefront of new developments in the payments landscape, creating an innovation and disbursements group this year to oversee new product development for GTS, as well as management for disbursements and automated clearing house – two product types with the most potential for innovation and revenue uplift.

Best bank in Canada

Best bank in Canada goes to TD Bank once again this year as it continues to expand and innovate. In 2013 its Canadian retail bank delivered record adjusted earnings – TD’s Canadian retail bank (comprised of Canadian personal and commercial banking, and wealth and insurance segments) produced earnings of $4.67 billion, an increase of 2% from 2012. It is continually voted as a top employer in Canada. In the second quarter of this year, Canadian retail generated net income of $1.3 billion – an increase of 12% compared with the same quarter last year. Earnings were driven primarily by good loan and deposit volume growth, favourable credit, positive operating leverage, strong growth in wealth assets, and the new TD Aeroplan credit card portfolio. Last year Aimia opted to switch from CIBC to TD Bank for the primary issuer of new Aeroplan Visa cards for the next 10 years. After some protests from CIBC the three firms reached an agreement – TD became the primary issuer of Aeroplan Visa credit cards in January, and acquired around half of the existing Aeroplan credit card portfolio from CIBC. It was a big move for TD, which had lagged CIBC and RBC as a credit card provider with loyalty offers. As a result, in April 2014, Bloomberg reported that TD had ousted CIBC as Canada’s top credit-card issuer by outstanding balances. In wealth, the firm also added several billion in assets under management.

Tim Hockey, group head of Canadian banking, auto finance and wealth management, referred to the uptick in earnings as: “Our Canadian retail segment fired on all cylinders this quarter.”

TD’s commitment to innovation is also impressive as evidenced by the launch last year of Ugo – Canada’s first open digital wallet and the TD tablet app for both Apple and Android. TD also ranks among the world’s leading online financial services firms, with around 8 million active online and mobile customers.

Best investment bank in Canada

When it comes to Canada, only one investment bank, RBC Capital Markets, excels in every asset class. Once again, it wins best investment bank in Canada. In M&A under Peter Buzzi’s long-standing leadership, the investment bank has a 21% market share for all transactions involving a Canadian firm, according to Dealogic, with 54 deals being done in the period reviewed – more than twice those completed by nearest Canadian competitor Scotiabank. It excels in cross-border transactions thanks to its global footprint and size. Over the period RBC Capital Markets advised Maple Leaf Foods on its C$1.6 billion sale of Canada Bread to bakery Grupo Bimbo. The bank also advised Shoppers Drug Mart on its sale to Loblaw Companies that was one of the largest retail transactions globally at C$13.1 billion.

With the largest retail distribution network in Canada, and the sixth largest retail distribution network in the US, RBC Capital Markets has a firm advantage when it comes to Canadian equity offerings. It leads the league tables in Canadian equity and equity-linked offerings with a 17.3% share of all new issues. BMO Harris ranked second in the league tables with 12.2%. The firm demonstrates the ability to execute in every sector and asset type. Over the period considered for the award, RBC was bookrunner for Barrick Gold’s $3 billion offering; financial technology firm D+H’s C$690 million offering of subscription receipts and convertible debentures; and Choice Properties C$460 million IPO.

In debt, RBC Capital Markets is the bank of choice in every asset class. According to Dealogic, RBC CM did 95 issues totalling C$15.6 billion over the review period with a market share of 20.6% of all Canadian corporate debt deals. It was bookrunner on 60% of all offerings over the period, including billion-dollar multi-tranche deals from Loblaw and Enbridge.

In government deals, RBC CM is the only dealer to act as manager in all 10 provinces and ranks number one for government underwriting and international bond underwriting for Canadian government issuers. Trusted by its peers, RBC CM is also the leading dealer for financial institutions. It was joint bookrunner on Wells Fargo Canada’s C$1 billion note, and was joint bookrunner on deals from GE Capital Canada and Ford Credit Canada. It was also joint bookrunner on JPMorgan’s and Goldman Sachs’ separate maple deals.