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Headline: Regional awards – Emerging Europe Source: Euromoney Date: July 2001 Author: Anja Helk Best bank: Bank Austria Best debt house: Citigroup/Schroder Salomon Smith Barney Best equity house: CA IB Best M&A house: CSFB Best at cash management and payment: Citigroup Best at risk management and treasury: Citigroup Consolidation and privatization of the banks in the region has continued unabated since last year. Even in countries that had taken the slow path of selling their banks to foreigners, such as the Czech Republic, Slovakia, Slovenia and Romania, things have moved on quickly. To date the most enthusiastic buyers have been UniCredito, KBC, IntesaBci, Société Générale and Erste Bank. They all have acquired majority stakes in one or more of the biggest local banks. Yet, since good banks do not get sold every day, and are in limited supply, none of these buyers has been able to create a comprehensive regional presence. Both Bank Austria and Raiffeisenbank (RZB) committed themselves to the region 10 years ago and can now look on extensive, efficient networks. Raiffeisenbank owns some of the best and most profitable institutions and wins the awards for best bank in Slovakia and Russia. It continued to expand aggressively last year by purchasing Bosnian bank Market banka, Hrvatska Postanska banka in Herzegovina and Banka Agricola in Romania. But despite the good performance RZB falls short of one quality that Bank Austria can claim for itself: deep financial pockets. Last year’s merger with HypoVereinsbank (HVB) of Germany catapulted Bank Austria into the top league of financial institutions in Europe. It is the third-largest group by assets with e18 billion ($15.5 billion). The merged bank is one that can compete with the powerhouses of the world, and even more so with the foreign banks expanding into central and eastern Europe. HVB had a strong regional presence on its own. Together the two banks operate 751 offices in the region with 18,600 employees – ahead of RZB’s 200 outlets with 5,400 employees. Bank Austria has not won any country awards this year but the merger could change that. In Poland the merger of subsidiaries PKH and BPK will create the country’s third-largest bank. Mergers in the Czech Republic, Hungary, Poland and Slovakia will be legally completed this year. Bank Austria’s expertise in the region has been credited by HVB, which will be integrated into Bank Austria’s operations and under Bank Austria’s supervision. Bank Austria is also one of the biggest lenders and syndicated loans arrangers, whereas RZB does not feature in the top 10. The two banks are a great fit from another perspective: HVB offers strengths in online banking and is the leader in real estate financing, whereas Bank Austria has a strong leasing and investment banking operation. Bank Austria’s investment banking arm, Creditanstalt Investment Banking (CA IB) is, for example, one of its biggest selling points and a factor that decided in favor of Bank Austria as being the best bank. With CA IB, the group offers all services a corporate requires. In light of the region’s maturing markets in securities, cross-border M&A transactions, etc, a strong investment banking unit becomes vital for keeping and extending banking relationships. CA IB is one of the leading corporate finance houses. It is the best equity house in Slovakia and comes a very close second in the Czech Republic, Hungary, and in Poland where it led the ground-breaking secondary public offering of PKN Orlen. The equity markets in the region have had more than their fair share of beauty sleep. In most countries there has been no IPO activity in the past 12 months, and the exchanges have been starved of liquidity for a long time. CA IB is staying even in these most dismal market conditions. Where others have left or downsized their activities, CA IB has shown strong commitment and is present in the whole region. It runs the best research on equity, with 40 people specializing in country as well as sector research. CA IB also operates one of the strongest MA advisory houses in the region, being pre-eminent in Hungary, Bulgaria, the Czech Republic and Slovakia. However, its approach differs substantially from that of this year’s winner, CSFB. Although CA IB is strongest as a local and regional adviser, CSFB has advised on most of this year’s biggest privatizations. CSFB is, after all, a bulge-bracket firm that offers global reach, resources and technical expertise. But where others with such qualities bring over their expert people on the big occasion, CSFB follows a local strategy. With offices in Prague, Warsaw, Budapest, Moscow and Kiev, it is in the best position to identify business opportu-nities as they come along. The local approach also makes sense because it gets CSFB mandates on the buy side, too. Once mandated, CSFB clients are guaranteed the support of its world-class experts, which was, for example, the case in the privatization of the Ukrainian electricity distributors. The results are visible. CSFB won three of our country awards – in Ukraine, Poland, Bulgaria – and there could be more to come. Key deals are pending, such as the privatization of TPSA in Poland, of gas distributor SPP in Slovakia and the sale of Croatia’s biggest bank, Zagrebacka bank. Citigroup stands out for offering a unique mixture of local expertise and global reach. It’s the choice for most of the multi-nationals operating in the region and for local blue chips that are expanding. Citibank has an extensive network of more than 100 branches in all the CEE countries, most recently it set up a branch in Bulgaria in 2000. Citibank is one of the few commercial banks where corporates can go for anything from project finance to cash management and FX. Schroder Salomon Smith Barney provides quality investment banking services. Over the past 12 months, Citibank was the lead arranger for syndicated loans ranked by numbers of transactions and second by volume. It has been involved in many of the largest deals. It was, for example, the sole arranger for a $400 million loan for Croatia, which was the largest ever and helped with the success of the sovereign bond, as well as for Termoelectrica (guaranteed by Romania) and for LOT-Polish Airlines. Citigroup is also the best debt house in Bulgaria and in Poland, where its merger with Handlowy created the third-largest bank, and the top corporate bank. Schroder Salomon Smith Barney is one of the best providers in international corporate bonds in the region. It was joint book-runner for Romania’s groundbreaking five-year bond, as well as doing deals for Hungary and the bigger corporates – Poland’s TPSA, Elektrownia Turow and Slovak utility SPP. Citigroup is the undisputed leader in cash management and payment in the region. Citibank’s clients, mainly multinationals and larger corporates, appreciate the cutting edge technology – CitiDirect Online Banking, Citibank e-Billing, electronic fulfilment with Citi-Connect – and the bank’s ability to anticipate changes. Last year, Citi introduced regional file delivery in response to increasing centralized back-office functions, and started advising firms on cross-border liquidity management since many market regulations are fast fading. Multinationals also find Citibank’s supply chain management approach useful. This means that the local suppliers to them can be as well served as, in turn, their local customers. Citibank runs service-level agreements with the biggest institutions – including 7,000 post offices in Poland, and with the savings bank in Russia – and where this infrastructure is not sufficient it hires security firms to collect cash from franchises and to pay into Citibank’s accounts. As a provider of cash management Citibank clearly differentiates itself through its strong local penetration, which is vital since 80% of transaction are still made domestically. The same is true for treasury services. There, Citibank’s local knowledge is combined with its London-based teams in forex, swaps, exotic derivatives, etc. Citibank trades all the currencies and is the number one trader in most of them. Deutsche Bank comes close to Citibank in some currencies, but has less local presence. |
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