Best bank:
Merita
Best debt house:
ABN AMRO
Best equity house:
Enskilda Securities
Best M&A house:
JPMorgan
Winner of the best bank award for Finland is again Merita, part of the Nordea group. The bank continues to build on its values of good customer service and technological innovation in the Finnish market. Merita’s share of the retail market in Finland is 38%, with a high proportion of these customers taking full advantage of its advanced internet banking system and its online market portal, Solo. Solo enables Merita’s customers to make secure online purchases with instant payment. The portal brings over 600 companies that accept electronic payments via the system to users, a solid endorsement of the security of the system. The vast majority of these companies, some 470, are Finnish.
In addition to its successful retail operations, Merita leads in private banking, offering investment services to high-net-worth individuals.
The Finnish private-banking operation is particularly strong. The group’s total assets under management amount to e105 billion ($90 billion). Private banking accounts for around a quarter of this and is expected to increase significantly in the near future. Merita’s performance in this area is in a league of its own. Andreas Hakansson, associate director for equity research at UBS Warburg, says: “In terms of investment management, as well as retail, Merita in is in total control in Finland.”
Along with retail banking, corporate clients constitute Merita’s chief source of revenue. Wholesale lending is healthy: the corporate division’s earnings have benefited from improved margins and increased volumes, thanks in part to merger and acquisition activities. As for the majority of Scandinavia’s lenders, non-performing loans present no real problem so far. The bank’s corporate cash management system has been improved further.
The debt market in Finland was dominated in the past year by four institutions, Nordea among them. But the year’s key deal was a e5 billion issue, due in 2007, for the Republic of Finland, run by ABN AMRO. It is this deal, a resounding success, that swings the award for best debt house in Finland. The issue was combined with a buy-back of the government’s 6% 2008 serial bond and was increased from an initial offer of e3 billion to e4billion to the final e5 billion ($4.3 billion) because of the overwhelming demand that ABN AMRO mustered.
The total order book, before allocations, reached an impressive e9 billion, from 253 accounts. The distribution was very wide, reflecting one of ABN’s key strengths, with investors from 21 countries taking advantage of the offer, covering all the major financial regions.
Best equity house in Finland was again Enskilda Securities. Enskilda is ranked third on the Helsinki stock exchange, with a market share of around 12% of trades. But it is in the quality of research that Enskilda really scores over its rivals. Its Helsinki research team covers the entire range of industries listed on the exchange, but Enskilda’s equity research focuses particularly on the technology sector. With over half the market capitalization in the Nordic region in technology sectors, this is a key area for future investment.
Enskilda believes that accurate research and analysis is vital to identify good investment opportunities in this area, and the reputation of the team is first class. Edward Plumbly, head of equities at Enskilda Securities says: “Our equity research objective is to generate business in the secondary markets. We take a more balanced approach, rather than focusing our energies solely on the primary market.” Plumbly feels that Enskilda’s position is exceptionally strong. “The market has been poor for everyone recently, but I feel we are in the best shape we’ve been for a number of years.”
The dominant player in mergers and acquisitions over the past year has been JPMorgan. The bank has advised on several key deals involving Finnish clients, both on the bid and target side, including the three largest of the year. Chief among these was the takeover of Norway’s Christiania Bank by Merita (as part of Nordic Baltic Holdings), in which JPM- organ, along with Lazard and Pareto, advised the bidder.
The deal was valued at almost $2.9 billion and was a major part of Nordic Baltic’s continuing expansion strategy to form the Nordea group throughout the Nordic region. Another key deal was Sampo’s bid for Norway’s Storebrand, in which JPMorgan worked with another of Finland’s big local M&A players, Mandatum&Co.
