Awards for excellence – Mexico

Best bank:

Banacci

Best debt house:

JPMorgan

Best equity house:

Merrill Lynch

Best M&A house:

Citigroup/Salomon Smith Barney

Grupo Financiero Banamex-Accival, or Banacci, was the best bank in Mexico even before it agreed to be acquired by Citigroup. It was certainly the largest, with 1,349 branches and more than $35 billion in assets. It is also very efficient, with return on equity of more than 20% for the past two years, notwithstanding that its capital adequacy ratio, at 15.4% (tiers one and two), is the highest in the Mexican banking system. It has a 27% market share in bank deposits, and a 31% market share in loans.

Now, with Citibank’s Mexican assets being integrated into either Banamex, the banking part of Banacci, or Accival, the brokerage, the bank will get even stronger. What is more, Citi is determined to ensure that the brand grows north of the border as well, targeting the 30 million Hispanics in the US.

The bank loan market is still small. Loans account for just 15% of GDP, compared with 29% in Brazil and 72% in the US. Filling the demand for debt is JPMorgan, which stands at or near the top of the league tables in the nascent domestic bond market, and which also leads the country’s international bond league table. JPMorgan also is a leading dealer in Mexican government debt securities.

In the equity market, however, the leader is Merrill Lynch, which has 15.2% of institutional trade in ordinary shares. Second-rated Morgan Stanley has 11.5%. Merrill has participated in most of Mexico’s recent international equity offerings, including the Telmex $1.5 billion secondary offering and the ASUR $335 million IPO.

Citigroup/Salomon Smith Barney dominates the M&A league tables for Mexico over the past 12 months, with four deals worth $29.9 billion, a market share of 76.3%. Even excluding the deal on which it advised itself – the Citigroup acquisition of Banamex – it still retains first place.