Awards for Excellence 2002
Best bank: HVB/Bank Austria
The past 12 months have produced yet more M&A activity in central and eastern Europe as the key regional banks have improved their portfolio of countries, consolidated assets or expanded market share when already present. As most of the biggest banks in each country have been sold to a foreign owner already or are not on privatization lists, KBC’s April purchase of a minority stake in Slovenia’s Nova Ljubljanska bank and UniCredito’s majority stake in Croatia’s Zagrebacka Banca purchased in March look impressive. In the best bank contest, congratulations go in particular to KBC and UniCredito for both having a stake in two of Euromoney’s best banks in central and eastern Europe by country. But for the biggest universal network banks present in the most countries, the award was a choice between Raiffeisenbank (RZB) and Bank Austria.
The decision was tough: RZB operates in 13 CEE countries, Bank Austria in 15. RZB-owned banks also win two country awards, in Slovakia and Yugoslavia and is the main challenger to the winner in Romania. Bank Austria does not take any country awards but is third, fourth or fifth biggest bank in many of the biggest markets. Both banks report excellent returns on equity, both are strong corporate, retail and investment banks with a traditional focus on corporate banking and a diversification into serving SMEs and growing demand for retail services. Both are looking at further opportunities in southeastern Europe.
Bank Austria’s biggest advantage was its 2000 merger with HypoVereinsbank, which has given it the scale and cash to make a big regional mark. It now has e26 billion ($24.4 billion) of CEE assets compared with RZB’s e11.4 billion. There have been questions about Bank Austria’s franchise – how successful the mergers have been between HVB’s and Bank Austria’s subsidiaries, for example, or its strategy of rebranding CEE banks – but combined HVB/Bank Austria is a strong force.
RZB has a strong corporate finance practice, with an excellent regional research team. It is strong in transaction services and is the leading mandated arranger of CEE syndicated loans, behind Citibank, but with more deals. It is also a strong player in domestic currency bonds, particularly in Russian and Slovakia. But HVB/Bank Austria is the fifth-largest provider of loans, is the fourth-largest participant in the region’s international bonds and the fifth-largest in international local currency bonds. Creditanstalt Investment Banking (CA IB), which Bank Austria brings to the union, has also long been the region’s blue-chip investment bank, with strong country-based research, securities and corporate finance practices and a trading presence on nearly all the local exchanges. HVB/Bank Austria also takes the edge in transaction services. It has a leading position in custody and is the second-best forex trader after Citibank in the region’s most popular currency pairs.
Best debt house: Citigroup/Schroder Salomon Smith Barney
The award for best debt house was a close choice between Deutsche Bank and Citigroup/Schroder Salomon Smith Barney. Both are strong in international and domestic bonds and syndicated lending, secondary market trading and CEE research. Deutsche takes the best debt house award in Croatia, Turkey and Hungary, yet Citigroup/SSSB is top in Poland and is a close second in Russia and Turkey. This means Citibank benefits from being long established in the region’s volume markets, particularly Poland, where it cleans up the domestic zloty market through local bank Handlowy. Deutsche has done major domestic bonds in several currencies and is the top bookrunner on international domestic currency bonds from the region. However, Citibank takes first place to Deutsche’s third as the number one bookrunner of international bonds and the top mandated arranger of syndicated loans. Citibank/SSSB is also a top arranger of project and trade finance.
Best equity house: UBS Warburg
In another dry year for primary activity, Russia has been the surprising source of many of the region’s key transactions. In this environment, UBS Warburg takes the award for best equity house. It has the best primary, secondary and research capabilities in the Russian market and also takes the country award there. But it is not just in Russia that it is strong. Although all its deals have been there this year, it is still the number one ranked research and sales team for the whole region and has the execution, experience and capabilities to be able to make deals happen when the time is right.
Best M&A house: CSFB
Although CA IB Corporate Finance and RIAG, the M&A advisory wings of Bank Austria and RZB, have both been active this year, CSFB takes the overall award. It wins the country awards for M&A in Slovakia and Poland but has also worked on landmark transactions in Russia and Croatia. Its work advising the Slovakian government on the sale of a 49% stake in gas company Slovensky Plynarensky Priemysel shows its continued success in attracting key privatization mandates. Moreover deals such as Heineken’s purchase of Russia’s Bravo Brewery where it advised Heineken shows it is equally comfortable on private transactions, both for bidders and for targets.
ABN Amro comes a close second. It advised the Czech government on the e4.1 billion ($3.9 billion) sale of Transgas. It also advised KBC on its purchase of a minority stake in Slovenia’s top bank, Nova Ljubljanska for e435 million in April.
Best at risk management and treasury/best at cash management: Citibank
Although Deutsche Bank is a threat to Citibank’s supremacy in risk management and treasury and in cash management, Citibank’s extensive and long-standing local presence allows it to hold its lead again. It has trading centres covering currency and interest rate products in 10 local centres. It is also the leading trader of the Hungarian forint, Polish zloty and Czech koruna, and provides country-specific structured products, including local currency and interest rate derivatives. In cash management, it has the most extensive coverage.
Best at custody: Bank Austria
Bank Austria is the top-rated custody bank in several central and eastern European countries and is in the top three across the rest of the region.
BULGARIA
Best bank: Bulbank
Best debt house: JPMorgan
Bulbank has been going from strength to strength under the guidance of UniCredito and Allianz, which bought into what was already Bulgaria’s dominant bank in October 2000. In the past year it has been focusing on preserving its market-leading position in corporate banking, where it offers a full range of services from payments to custody to trade finance.
JPMorgan takes the best debt house award in Bulgaria for working on all of the sovereign’s issues over the past 12 months. It was also global coordinator on Bulgaria’s $1.32 billion Brady bond exchange this March.
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Dubrovnik, Croatia: Takeovers have transformed the local banking scene where Privredna has encroached on Zagrebacka’s territory |
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CROATIA
Best bank: Privredna Banka
Best debt house: Deutsche Bank
Best equities house: Zagrebacka Banka Brokerage
Best M&A house: Dresdner Kleinwort Wasserstein
Zagrebacka Banka is still the largest bank by total assets and corporate and retail market share and is an excellent full-service bank but it has been preoccupied since May last year about whether its now completed takeover by UniCredito and Allianz would go ahead. Privredna Banka, Croatia’s second-largest bank, has therefore encroached on Zagrebacka’s territory a bit more this year. It is now closing the market share gap with Zagrebacka Banka, with 18.3% compared with the larger bank’s 27.3%. In 2001 it increased its share of the corporate loans by 16% and corporate deposits grew by 14%. Retail deposits grew by a hefty 85.6%. Return on equity was 24.3% in 2001, double that of Zagrebacka’s. All of this means the bank has continued on its rapid growth trajectory that it started when Italian IntesaBci took a 66% stake at the beginning of 2000. Next year, however, with UniCredito firmly established at Zagrebacka and its reputation of turning even the most staid institution it acquires into a dynamic growth machine, all this could change.
Deutsche Bank wins the awards for best debt house for the part it has played in bringing Croatian issuers to the international market. In January, it did a highly successful e500 million seven-year benchmark for the sovereign along with CSFB, taking its total issuance for the sovereign over the past 12 months up to e750 million. It also worked as joint bookrunner with CSFB on the first international bond from Croatia that was not guaranteed, in the shape of Agrokor’s debut e130 million five-year offering. Deutsche was also sole financial adviser on the e154.5 million Zagreb Wastewater Treatment Plant project financing and is adviser on the e450 million Rijecka-Zagreb motorway.
Zagrebacka Banka Brokerage is the best broker on the Zagreb Stock Exchange, which has experienced a sustained rally over the past year.
Dresdner Kleinwort Wasserstein takes the best M&A house award for advising Allianz and UniCredito on the largest Croatian M&A deal this year, the $685 million purchase of 80% of Zagrebacka Banka, in the first ever cross-border share offer in emerging Europe, a complex transaction that meant that UniCredito had to sell its existing holding, Splitska Banka, to comply with anti-monopoly requirements. Dresdner also advised Croatia’s Pliva, the largest pharmaceuticals company in the region, on its $43 million acquisition of Germany’s AWD Pharma.
CZECH REPUBLIC
Best Bank: KBC/CSOB
Best debt house: Ceska Sporitelna
Best equity house: Wood&Co
Best M&A house: Merrill Lynch
Belgian bank KBC would like to have at least 10% market share in every CEE market it operates in and in the Czech Republic they have certainly achieved that objective with CSOB, where it has 20% market share in total assets. CSOB has the leading position in corporate banking, helped by KBC’s international clout – KBC was also the second largest mandated syndicated loan arranger in the last 12 months, for example. Together, these would make KBC’s assets in the Czech Republic a pretty indomitable force. But now it has bought Investicnia Postovni Banka (IPB), KBC has the potential to develop a powerful retail franchise as well.
Ceska Sporitelna takes the award for best debt house. In the domestic market, the most developed in the region, it has won important mandates over the last year, including the position of joint mandated arranger along with CSOB on Cesky Telekom’s planned Kc20 billion 10-year domestic issuance programme. It also arranged the first domestic bond for insurance company Ceska Pojistovna, a Kc4 billion five-year floating rate note.
Wood&Co is an established Czech and Slovak equity brokerage and has traded the largest volume of equities on the Prague stock exchange over the last 12 months, closely followed by Patria Finance. Wood also provides research and corporate finance services and launched the well respected HN-Wood index back in 1993, which now tracks the 60 top stocks on the exchange.
Merrill Lynch takes the award for best M&A house for advising on the two largest-ever foreign direct investments into the Czech Republic. It advised RWE on its e4.1 billion investment in Transgas, the largest ever energy sector privatization in CEE, and advised SG on its e1.2 billion 60% stake in Komercni Banka last July.
HUNGARY
Best bank: OTP Bank
Best debt house: Deutsche Bank
Best equity house: Erste Bank
Best M&A house: CAIB
OTP Bank, the former state savings bank, still dominates the Hungarian banking market. K&H, the result of a merger between the former K&H and ABN Amro Magyar Bank, is the second-largest bank, with a 15% market share. In retail banking, no other institution comes close to OTP. It has over 2.8 million retail banking customers, a market share of over 40% in retail deposits, 37% in retail lending and 70% in current account and retail banking cards. The fact that around 70% of cash withdrawals throughout Hungary are done through OTP ATMs gives an indication of its grip on the retail market. It has also become a specialist in the municipal market, with over 75% of local governments having deposit accounts at the bank, and has market-leading asset management, insurance and leasing subsidiaries.
OTP now offers retail, corporate and investment services but it only moved into corporate banking in 1989 and so cannot compete on a par with the key corporate banks in Hungary – the Hungarian Foreign Trade Bank (MKB) and the Central-European International Bank (CIB). However, its market share of corporate deposits is respectable, at 12.5%, and corporate lending has now reached Ft508.9 billion ($2 billion), almost a 50% growth over the past 12 months. Over the same period it has also been the top arranger of syndicated loans for Hungarian borrowers.
Return on equity has dropped from 28% in 2000 to 20% (ROAE) in 2001 and competition and falling interest rates have put pressure on margins. Nevertheless, OTP is still one of analysts’ top picks from banks not just in Hungary but across the whole region. They believe, among other things, that OTP stands to capitalize strongly on the growth of the market for mortgage lending in Hungary. The bank has also been expanding outside Hungary. In April, it bought Slovakian bank IRB for Ft4 billion. It has also expressed an interest in purchasing Romania’s largest bank, Banca Commerciale Romana, which is now being privatized.
Active with corporates
One of Hungary’s leading corporate banks, the Central-European International Bank (CIB), is the biggest secondary market trader, but Deutsche Bank takes the overall award for best debt house. It was joint bookrunner with Schroder Salomon Smith Barney on the Hungarian government’s 10-year benchmark that it issued last June but should be particularly commended for its work with Hungarian corporate issuers and borrowers. Most important, in the forint market it was joint lead arranger on oil company Mol’s Ft100 billion MTN programme, working on issuance from the programme with CIB, CAIB and OTP. It also was joint lead manager on a Ft20 billion three-year deal for MKB bank. Although Italian IntesaBci is the top mandated arranger of syndicated loans, Deutsche takes third place in this market as well.
The bank was joint lead arranger and underwriter on a e280 million deal for petrochemicals company Tiszai Vegyi Konbinat (TVK).
CA IB Securities runs a strong equity research team covering Hungarian stocks and a decent equity brokerage but of the equity brokers active on the Budapest stock exchange Erste Bank was the biggest trader again in 2001. To complement its sector-by-sector coverage of the region, it also has a dedicated country analyst based in Budapest.
Local investment bank Patria does provide quality corporate finance services but Bank Austria’s subsidiary CA IB Corporate Finance takes the best M&A house award. The firm has a strong track record in advising Hungarian companies pursuing cross-border transactions and those that become the targets of them. Most recently, it provided a fairness opinion for KBC and ABN Amro on the valuations of their Hungarian subsidiaries K&H and MHB banks, as part of the merger of the two this year.
POLAND
Best bank: Pekao
Best debt house: Bank Handlowy/Citigroup
Best equity house: CA IB
Best M&A house: CSFB
In Poland, the battle between foreign banks to gain market share has been particularly fierce but has led to a relatively even market share split between Bank Handlowy (with foreign owner Citibank), Bank Slaski (ING), Kredyt Bank (KBC), BRE bank (Commerzbank) and BZ WBK.
Pekao stands out for its 16% market share by assets. In Poland, where there is testing competition for a limited pool of corporate credits, the fact that Pekao is the biggest retail player behind state-owned PKO is strongly in its favour. It also has the largest branch, ATM network and deposit base. Yet it also has a strong corporate focus with a decent market share in corporate banking, with a 12% market share in corporate lending.
It also operates the number one brokerage house, has been the top trader in both bonds and equities on the Warsaw Stock Exchange over the past year and its asset management business, Pekao Pioneer, is becoming increasingly important in Poland’s growing market.
Financially, since it was acquired by UniCredito in 1999, it has become the star of the market, with return on equity of 20.6% in 2001, achieved two years ahead of schedule.
Top contender
The other main contenders for the award are BRE Bank and Bank Handlowy (the fourth-largest bank in Poland following the merger of PBK (controlled by Bank Austria) and BPH (controlled by HypoVereinsbank). Both are strong corporate and investment banks, although BRE is more of a niche player. BRE is a leading investment bank, with strong corporate finance practice, private-equity and asset-management businesses. Its growth in loans to customers, mostly corporates, has grown an incredible 52.5% in 2001 but its retail business is still relatively small, having only been set up in 2000. There have some worries about the risk of its decision to take 13% of troubled telecom Elektrim. Handlowy is the leading corporate bank in the country and the sector leader in trade finance. It also has a strong securities business, although again its retail business is relatively small and it cannot compete with Pekao in terms of assets or in the diversity of its market strengths.
BRE bank is a valuable debt house in the Polish market. It had a 12.3% market share in the short-term debt market at the end of 2001, worked on a number of key corporate zloty-denominated bonds and committed Zl893.3 million ($226.6 million) in syndicated loans. However Bank Handlowy/Citigroup comes out on top since Poland is the one country where Citigroup/SSB can meld its regional strength as a debt house in the syndicated loan and international bond markets with the ownership of a leading domestic corporate bank in Handlowy. Citibank has been mandated arranger on the most syndicated loans in the past 12 months; Handlowy is the second-biggest bond trader on the Warsaw stock exchange. Salomon Smith Barney was joint bookrunner with CSFB on the sovereign’s e750 million ($705 million) Eurobond and Handlowy is the number one arranger of domestic CP and zloty-denominated bonds.
Pekao may have been the biggest equity trader on the Warsaw Stock Exchange over the past 12 months but CA IB takes the award for best equity house for its innovation in the domestic market this year, one country where there was some equity-linked activity. After being lead manager and advisor to IT company Prokom on its Zl200 million convertible bond last December, it followed this up with a convertible bond for ComArch, a small deal at Zl40 million but the first public and first exchange traded convertible from Poland. CA IB has a couple of other similar deals in the pipeline and was also lead manager last June for the Zl1.6 billion initial public offering of Bank Zachodni. It is also one of the five equity market makers on the exchange.
Salomon Smith Barney is also a strong M&A house in Poland, although all on the bidder side of cross-border transactions. However, CSFB has done the most M&A business in the country, by volume and number of deals, possibly as a result of its four-strong team on the ground in Warsaw, and has advised both targets and bidders. Of these, it advised Deutsche Telekom on its purchase of 3.5% of Polska Telefonia Cyfrowa and provided a fairness opinion to the shareholders of Bank PBK on its $725 million merger with Bank BPH.
ROMANIA
Best bank: Romanian Bank for Development
Best debt house: ING
Best equity house: ING
Best M&A house: RIAG
The Romanian Bank for Development (BRD), the country’s second-largest bank after state-owned Banca Commerciale Romana, has achieved staggering growth once again in 2001, particularly in Romania’s growing retail market. The bank was taken over by SG in March 1999 and is going from strength to strength under its French parent. It now provides 42% of customer loans and has a 20% market share for retail deposits.
It has also rapidly increased its customer base since SG took control in 1999, from just under 500,000 to 1.6 million, and has expanded its retail banking card services. It also has a strong corporate loan portfolio and provides a full range of wholesale services. It was involved as co-arranger on Termoelectrica’s $250 million syndicated loan (see below). The bank’s return on equity in 2001 shows why it is worthwhile for SG to make all the effort.
Although its has had less time to develop its position in the market, RZB is well on the way to rejuvenating one of BRD’s competitors. RZB acquired Banca Agricola in July last year and this bank is also growing much faster than predicted. When RZB completes the merger of Banca Agricola with its existing Romanian subsidiary, Raiffeisenbank, it will rank fourth by total assets, and will combine Raiffeisenbank’s corporate strengths with Banca Agricola’s retail base and 224-strong branch coverage. However, the bidding process for the privatization of Banca Commerciale Romana (BCR) is now well under way and ING is one of the interested parties. If ING does take the prize of the country’s biggest bank and combines this with its existing commercial and investment banking strengths (see below) BCR could become an indomitable force.
ING leads in internationals
JPMorgan comes top of the debt league table, but ING has been involved in all the handful of international bond deals out of Romania in the past year. It was joint bookrunner with ABN Amro on the e125 million ($120 million) bond for state oil company Petrom, the first corporate issue not guaranteed by the Romanian government. It was joint bookrunner on the sovereign’s highly successful e700 million bond this April and was co-lead on Romania’s e600 million bond the previous June. Although Citibank has been the biggest player in the country’s syndicated loan market ING takes second place along with Deutsche Bank. ING was one of the mandated arrangers of Termoelectrica’s three-year syndicated loan, the first of this tenure from Romania since the Russian crisis.
ING also takes the award for best equity house. Although it has only been the third biggest equity trader on the Bucharest Stock Exchange in trading volumes, it has a 10% market share. ING also organized the listing of 6.8% of state-owned oil company Petrom on the exchange, which significantly bolstered liquidity as it is now the most traded stock. It is also one of the leading research houses for Romanian companies.
The sale of Banca Agricola was a key privatization last year but Raiffeisen Investment (RIAG), the corporate finance practice of RZB, takes the award for best M&A house for its advisory services to Sidex, Romania’s state-owned steel company, in its sale to Ispat International.
Sidex, the largest steel company in eastern Europe, was one of the key assets on the government’s disposal list but as the country’s single largest loss-making company, it was a deal that many commentators doubted would ever get done. The deal finally closed last year and was worth around $500 million.
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RUSSIA
Best bank: Alfa Bank
Best debt house: ING
Best equities house: Brunswick UBS Warburg
Best M&A house: Merrill Lynch
Although Renaissance Capital is Russia’s strongest all-round investment bank, Alfa Bank can now be seen as the country’s top universal bank. Alfa has denied reports that it is on the verge of selling an equity stake to Citibank, but its results as a domestic bank speak for themselves. It is Russia’s largest privately owned bank, is profitable and holds the highest credit rating for a private financial company, something of an achievement after the financial meltdown in the banking sector in 1998, which is still affecting other competitors. Alfa is the second-largest retail deposit holder with the second-largest branch network behind Sberbank. The bank has the fourth-largest credit portfolio and is the country’s largest fund manager. When it comes to investment banking, Alfa Bank has also shown impressive strength this year. It was the second-largest arranger of rouble-denominated debt in 2001, was co-lead manager on Wimm-Bill-Dann’s IPO and has a very strong M&A advisory team (see below).
There were several strong contenders for best debt house in the year that international bond issuance from Russia finally took off and the domestic bond market developed rapidly. This made primary issuance the defining factor in selecting the best bank. Salomon Smith Barney was the top bookrunner of international bonds by Russian issuers this year, including Gazprom’s benchmark $500 million Eurobond. It has also lead-managed its first couple of rouble issues recently and Citibank has worked on some of the key Russian syndicated loans and trade finance deals over the last 12 months.
CSFB should be mentioned for being joint bookrunner on Gazprom and its role as a leading player in the domestic corporate bond market. Yet for strength across international and domestic bond issuance and syndicated lending, the award goes to ING. The bank is the third-largest provider of syndicated loans and is consistently among the top-10 rouble-denominated bond arrangers, having worked for TNK, one of the largest rouble issuers. It was also the third-largest bookrunner on international issues. It was joint bookrunner on both of City of Moscow’s deals, including the e300 million ($282 million) deal that opened up the Russian international market last October, and joint bookrunner on both Mobile Telesystems issues.
The defining equity deal this year through ING was Wimm-Bill-Dann’s $207 million IPO on the New York Stock Exchange in February, the first Russian IPO for 18 months and the first ever from a consumer-products company. Doing a successful sizeable IPO anywhere is an achievement at the moment; doing one in Russia is certainly impressive. Yet Brunswick UBS Warburg wins the category for its primary, secondary and research capabilities. It has done the most primary deals in the past 12 months, including a $127 million bought deal share placement for Sibneft in May and a $147 million accelerated bookbuild of Yukos global depositary receipts along with CSFB in February. IPOs in the pipeline include deals for IBS and Khanty Mansiysk Oil Corporation. It is also one of the biggest brokers on the Russian Trading System (RTS) and the number one market maker in Russian ADRs and has the strongest equity research team.
Although Alfa Bank has been involved in many key domestic deals of the past 12 months, Merrill Lynch wins the award for its work on landmark deals with domestic and foreign companies in the Russian market. It advised Russia’s Bravo Brewery on one of the largest cross-border M&A transactions since the 1998 crisis – its sale to Heineken for $400 million. It also advised UK oil company BP on the increase of its stake in local oil company Sidanco from 10% to 25% for $375 million.
SLOVAKIA
Best bank: Tatra Bank
Best debt house: RZB/Tatra Bank
Best equity house: CSFB
Best M&A house: CSFB
Tatra Bank, majority-owned by Austrian bank RZB, is still the best bank in the Slovakian market, and is probably the model for the entire region of how foreign ownership of a local brand can pay off. In fact it has made big improvements to its position over the past year. Tatra’s total assets grew by 43% in 2001 taking it up from number four to number three in the market. It is also now the biggest commercial lender, with 26% growth this year. Within this, it is also number one for corporate loans, overtaking Vseobecna Uverova Banka, and has 20% market share. It has created 19 new branches in 2001 to take the total up to 88 and is the most profitable bank in the country. ROE is also impressive, at 33.4%.
Tatra’s particular strengths lie in treasury and investment banking. In retail banking it lags market leader Slovenska Sporitelna, the former savings bank that Austria’s Erste Bank bought last year. Although it has the third-largest market share in deposits with 14%, a good proportion of these are corporates – it has 25% of this market. However, its services are the most technologically advanced. The first bank to introduce electronic banking, last year Tatra introduced MicroPay to deal with small payments over the internet.
Within its competencies in investment banking, one of Tatra’s main areas of expertise is debt financing. Slovak koruna deals include an international Eurobond for DePfa, which it joint lead managed with Morgan Stanley. Tatra has been mandated to do forthcoming Slovak koruna Eurobonds for state-owned electricity company Slovenske Elektrarne and state railway company ZSR. With parent RZB, it has been mandated arranger of the most syndicated loans for Slovakian borrowers of the past 12 months. It has worked on several notable deals, including the Sk7.9 billion ($174 million) loan facility for Slovenske Elektrarne in cooperation with the EBRD, on which it was facility agent. It was also the fifth-largest trader of bonds on the Bratislava Stock Exchange in 2001.
Veseobecna Uverova Banka, in which IntesaBci took a 95% stake last November, is the biggest equity trader on the Bratislava Stock Exchange, but the award for best equity house goes to CSFB, for one reasonably sized private placement in an otherwise arid primary market. This resulted from the sale of a 36% stake of the largest national mobile phone operator, Globtel, to a consortium of financial investors including the EBRD and AIG. CSFB acted as financial adviser to the government-controlled utilities that sold the stake. CSFB was originally enlisted to do a dual listing IPO on the London and Bratislava exchanges but when the telecoms market collapsed CSFB organized the largest private placement for a CEE telco instead, for $180 million, the full target price.
It is partly for its role in the Globtel transaction that CSFB also takes the award for best M&A house. It also advised the government on the sale of a 49% stake in Slovensky Plynarensky Priemysel (SPP), the Slovak gas monopoly, to Gaz de France, Ruhrgas and Gazprom for $2.7 billion.
Dresdner Kleinwort Wasserstein and ABN Amro also advised on some important transactions. Dresdner advised the bidders on the SPP sale and advised Allianz on the purchase of its stake in Slovenska Poistovna. ABN Amro advised IntesaBci on its purchase of Vseobecna Uverova Banka for e550 million.
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SLOVENIA
Best bank: Nova Ljubljanska
Best debt house: RZB
Best equity house: Publikum
Best M&A house: ABN Amro
Nova Ljubljanska still dominates the Slovenian banking market by miles. The universal bank, offering commercial, retail and investment banking, commands over 34% of the country’s banking assets, 32% of loans and over 34% of deposits and is still increasing its market share. To date, it has acquired stakes in seven local banks. It has already expanded in Bosnia Herzegovina and Macedonia and is looking for further investment opportunities in southeastern Europe. Nova Ljubljanska is also one of the best-rated banks in the region. Now that KBC has taken a minority stake, its position should be further strengthened, particularly since KBC aims to develop a local retail bancassurance business. RZB takes the best debt house award for the work it has done in the local syndicated loan market. It is the number one mandated arranger for Slovenia, doing five deals including euro-denominated transactions for Banka Celje, Abanka and Gorenjska banka. Slovenia’s largest food retailer and wholesaler Mercator also mandated RZB to organise a e100 million ($94 million) commercial paper programme for it. Since RZB established a local market presence in April this year with the purchase of Krekova Bank, it is likely to do even more local business.
Publikum has a leading trading position on the Ljubljana Stock Exchange, which had a record year in 2001, with an almost 30% increase in trading volume over 2000. It also has a leading position in the off-exchange trading of non-listed securities and has a well-respected research team.
In M&A, ABN Amro takes the award for advising KBC on not only the biggest M&A deal of the year but on one of the most tortuous and protracted privatizations from the region. In April this year, the Slovenian government sold a 34% stake in Nova Ljubljanska bank for e435 million, in what was the fifth or sixth privatization attempt and what the bidders describe as one of the longest negotiation processes ever. NM Rothschild and Salomon Smith Barney advised Nova Ljubljanska.
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Garanti Bank: after merging with Ottoman Bank, Garanti is now the largest privately owned bank in Turkey |
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TURKEY
Best bank: Garanti Bank
Best debt house: Deutsche Bank
Best equities house: Global Securities
Best M&A house: Schroder Salomon Smith Barney
Garanti Bank and Akbank are the two main contenders for best bank in Turkey and both focus on corporate, commercial and consumer banking. Akbank had a good year last year. Deposits were up a hefty 33%, although loans to customers dropped a little. Meanwhile, Garanti grew its loan book by 10.8% in 2001 and although its deposits only grew by 5.2% it has progressed dramatically in other areas. Although Yapi Kredi Bank is the clear leader in credit cards, Garanti has doubled its market share though its flagship Bonus card to around 15% by the end of Q1 2002. After its merger with Ottoman Bank last year, Garanti is now the largest privately owned bank in Turkey, with the second largest market share after state-owned Ziraat. It is also the second largest mutual fund. Although Akbank provides the full range of services to corporates and is in a position to be more price competitive, with lower operating costs, Garanti is seen as the better service provider.
Both banks have suffered from Turkey’s financial crises. Akbank made a net loss of TL236 trillion ($164 million) in 2001. Garanti’s full-year results were not out at press time but the net loss is predicted to be more like $201 million. Akbank also has a much lower NPL ratio at 1.8%. Garanti does not have Akbank’s strong balance sheet but has been making up for that with technology-led efficiencies and innovation. However, Akbank has the financial clout to aggressively expand in this market, so the story could be very different next year.
Citibank/SSSB is the third-largest arranger of international bond issues from Turkey, the top mandated arranger of syndicated loans and a leader in structured finance and trade finance. However, Deutsche Bank narrowly takes the best debt house award this year. It is only the seventh-largest mandated syndicated loan arranger and by volume only comes fourth in the bookrunner table for international bonds. However, with Commerzbank, it relaunched the sovereign onto the international market with a highly successful four-year e500 million ($470 million) bond last October. After a currency devaluation, major economic crisis and the volatility post September 11, this was the defining Turkish deal. It also arranged a TL158 trillion zero-coupon note for the EBRD in October, the first of its kind and the longest-dated Turkish lira issue to date. It also arranged a three-year $200 million zero-coupon note indexed to Turkish lira for the EBRD.
Turkey has been a high point of equity activity from the region in the past year. Deutsche Bank and local firm IS Investment Securities were global coordinators of a secondary lira deal for oil company Petrol Ofisi, an equivalent of $166 million, but there were also two domestic IPOs, impressive given the volatility of the Turkish market. One was for Besiktas football club, arranged by IS Investment Securities and the other one raised an equivalent of $20 million for Galatasaray Sports club, on which Global Securities was sole bookrunner. Despite IS Investment’s performance in the primary market, Global Securities takes the award for also being the biggest equity trader of the past year by volume on the Istanbul Stock Exchange, and has one of the best research departments.
Global Securities also has a strong corporate finance practice, but Schroder Salomon Smith Barney has worked on the most significant M&A transactions of the past year. It sole-advised local cement factory Cimentas on its sale to Italian company Cementir in the largest Turkish private M&A deal in the past five years. It also advised Turkish confectionery manufacturer Kent Gilda&Birlik Gida on the sale of a majority stake to Cadbury Schweppes.
Ukraine
Best bank: Privatbank
Best debt house: WestLB
Best equities house: Dragon Capital
Privatbank celebrated its tenth anniversary this March and takes the best bank award for the fourth year running. It is the leader in product development and innovation and distinguishes itself through its commitment to bringing international banking standards to the Ukrainian market.
In the retail market, the bank is the leading provider of payment cards nationwide and was the first to introduce mobile banking services. In 2001, it increased its share of retail deposits by 72.9%.
At the end of last year, the bank won a tender organized by the Pension Fund of Ukraine and now distributes pensions and other social payments. Other initiatives include a savings programme that enables retail customers to purchase cars.
Deposits from corporates grew less, by 23.1%, but the bank already boasts the largest corporate loan portfolio and counts many key Ukrainian companies among its clients. Privatbank is looking to extend its corporate lending further, particularly to SMEs. Overall, its loan portfolio overall was up 63.7%. Privatbank is also a leading brokerage and custody house, with a developing securities and corporate finance business. It is also profitable.
The only international issue out of the Ukraine in the past 12 months, a $1.4 billion Eurobond issued by the Ukraine’s Naftogaz that was to be placed with Russian gas company Gazprom to cover its debt to the latter, is now in jeopardy since Gazprom has refused to accept the bonds. So the award for best debt house goes to WestLB, which is the top mandated arranger of syndicated loans from the country.
Dragon Capital take the award for best equities house, not just because it is a full service brokerage with extensive equity research coverage taking in all the major Ukrainian companies, but also because of its work in developing the KP-Dragon Index of the 10 most liquid Ukrainian stocks along with English language newspaper the Kyiv Post. This is the first reliable index in the Ukrainian market.
Yugoslavia
Best bank: RZB
Southeastern Europe has been one of the focal points of acquisition activity by the major banks active in the central and eastern European region in the past 12 months. In the inaugural country award for Yugoslavia, RZB takes the best bank award for the greenfield operation in Belgrade that it set up in March 2001. Although Bank Austria has followed it there, it was the first bank with 100% foreign capital to be established in Yugoslavia and the first foreign bank to set up shop after the political changes of 2000. It now services both domestic and foreign corporates and retail customers.
The Serbian government shut down the four largest and most indebted state banks at the beginning of the year – Beobanka, Beogradska banka, Jugobanka and Investbanka – and RZB has been quick to seize the advantage. It only started its retail operations in September 2001 yet already it has become the leading bank for foreign currency deposits. On the corporate side, it already has over 600 clients, with the focus on large local and multinational corporates. If Euromoney was to present an award for Bosnia&Herzegovina, RZB would probably win best bank there too, as its acquisition of Hrvatska Postanska Banka in 2001 makes it the largest banking group operating in that country.
