Best bank
Deutsche Bank
Best debt house
Deutsche Bank
Best equity house
Deutsche Bank
Best M&A house
Goldman Sachs
| Rolf Breuer | ||||||
Deutsche Bank’s chairman, Rolf Breuer, may have missed out last year on the merger with Dresdner Bank he wanted to rationalize its German banking operations, particularly its retail business where returns have been poor. He may have missed out again this year on the hoped-for retail distribution tie-up with Allianz, after the giant German insurer chose instead to pursue a merger with Dresdner Bank. But in wholesale and corporate banking in Germany, Deutsche Bank remains pre-eminent.
In core banking businesses, such as cash management and payments, it is a leading provider to large German companies. It is also a leading provider of risk management and treasury services including foreign exchange. What’s more Deutsche remains the bank that German companies are most likely to turn to for debt raising.
In the past 12 months Deutsche Bank has been bookrunner on a string of bond deals for DaimlerChrysler, a company to which it is particularly close through its ownership of a substantial equity stake.
It has also arranged bonds for Linde, BASF, Siemens
and Volkswagen. Deutsche remains a leading arranger of syndicated loans for German companies. In the past year it has arranged large credits for BMW, MobilCom, Deutsche Telekom, Thyssen Krupp and E-plus Mobilfunk.
Combine this with its pre-eminent position in underwriting and distributing bonds for other German financial institutions and Deutsche Bank is clearly the best debt house in Germany.
In part it owes that position to the role it inherited in post-war restructuring of the German economy. In future its role may shift as it seeks to build in asset gathering and management and to release and redeploy capital tied up for too long in large equity positions in German industrial companies. The bank will also inevitably seek to refine its credit-risk appetite. It clearly has the derivatives skills to manage down its credit exposure to German corporates without parading the fact too publicly that it no longer wants to hold their loans on its balance sheets.
Deutsche’s leading position in the German equity markets has been built up more recently and is perhaps even more impressive. According to Autex it has the leading secondary market share in trading the stocks of the blue-chip constituents of the Dax index.
Independent surveys of fund managers by the likes of Reuters suggest that its German equity research is widely followed. It is the leading firm in German equity derivatives, with a number one market share in OTC derivatives on large, medium-size and smaller German stocks.
More recently it has become increasingly clear that large companies and vendors are happy to use Deutsche to distribute equity in the primary market owing to its execution capabilities. The bank has led the largest initial public offering from Germany in the past 12 months, the e6.6 billion offering of shares in Deutsche Post. It was a joint global coordinator, along with Dresdner Kleinwort Wasserstein and Goldman Sachs in the e13 billion third offer of shares in Deutsche Telekom last summer. It has also led some medium-size and smaller IPOs, such as the e150 million offer from German football club Borussia Dortmund and the e1 billion flotation of the Deutsche Börse itself. And it has shown some innovation, for example with the e490 million pre-IPO convertible for EnBW.
Deutsche is also fast getting its act together as an M&A adviser in Germany, though its still can’t quite match the proficiency of Goldman Sachs. Goldman advised Dresdner Bank on the $10 billion equivalent takeover by Allianz, while Deutsche advised on the other side. That’s been the biggest completed deal in Germany in the past 12 months. Goldman also acted for Debis Systemhaus on its $5 billion acquisition by Deutsche Telekom and crops up more often on international M&A deals involving a German bidder or target. It advised Preussag on its bid for Thomson Travel and Siemens on its bid for Efficient Networks Inc. It has also advised the German power group E.On on its potential $10 billion bid for PowerGen of the UK.
