Best bank – UniCredito Italiano
Best debt house – JPMorgan
Best equity house – Morgan Stanley
Best M&A house – JPMorgan
Best local partner – Mediobanca
Italy’s banking industry hit a low note earlier this year when several domestic banks, including UniCredito Italiano, clubbed together to buy a stake in Generali with the intention of stopping French investor Vincent Bolloré gaining control.
Despite its involvement in this slightly dubious scheme, UniCredito does not seem to have done any long-term damage to its franchise. Since former McKinsey consultant Alessandro Profumo arrived at the bank, it has gone from strength to strength.
UniCredito is the largest Italian bank by market capitalization, with a return on equity of 17.2% and a cost to income ratio of just 54.3%, among the lowest of European banks. In January, Profumo decided to split UniCredito into three domestic banks: a corporate bank, private bank and a retail and small business bank – its S3 project. UniCredit Banca d’Impresa is the unit that services mid-sized and large corporates in Italy.
Although JPMorgan’s European debt business is considered patchy by many, Italy is certainly a sweet spot for it. In a divided market – ABN dominates asset-backed, Merrill Lynch the local authorities – JPMorgan manages to make its mark across the debt business. On the bond side, it has acted as bookrunner on several significant deals this year. Among them was Olivetti’s e1.55 billion multi-tranche issue in January this year, which boasted the first ever 30-year tranche on a corporate deal.
Other transactions included a e750 million debut issue for Poste Italiane and a benchmark e1.5 billion deal for ENI. In December, it coordinated the Republic of Italy’s largest asset-backed deal to date, a e6.6 billion securitization of real-estate assets at a time when there were fears the ABS market had become saturated. In the loan market, JPMorgan proved equally adept, leading Olivetti’s jumbo-sized e15.5 billion facility to support the acquisition of Telecom Italia – the transaction was deemed a huge success.
Morgan Stanley has led the most important equity transactions in Italy over the past 12 months, cementing its dominant position in the country. The largest deal was Telecom Italia’s e1.43 billion convertible, carried off in tricky markets in December, on which Morgan Stanley was sole manager. It also issued a e246 million convertible for Parmalat, on the back of a similar transaction for the company in April, which was the first convertible preferred issue by a European corporate for 10 years. Also impressive was an IPO – one of the very few anywhere in the world to be successfully completed last year – for Pirelli Real Estate. This was done with the help of Mediobanca as joint bookrunner. According to Autex figures, Morgan Stanley is a top-five trading house in Italian stocks.
JPMorgan has had an excellent year in Italian M&A, as witnessed by its much improved league table position. It has had a presence in the country for over 70 years and now has a large team of Milan-based M&A bankers. This year it has worked on several significant deals within Italy, as well as cross-border transactions. In the first category is the e24.2 billion merger between Olivetti and Telecom Italia, on which JPMorgan was sole financial adviser to Olivetti, as well as coordinating the credit facility. The deal, which will simplify the control chain at the group, is the largest M&A transaction in Italy since Telecom Italia’s takeover in 1999. JPMorgan also advised Tenaris on a complex cross-border transaction whereby it simultaneously acquired Siderca, Tamsa and Dalmine, which had shareholders in Argentina, Mexico, Italy and the US. In financial services, it advised SAI on merging with La Fondiaria and Sanpaolo IMI on the sale of Sanpaolo Invest to Banca Fideuram for e600 million.
Despite the negative publicity Mediobanca has attracted lately with the expulsion of CEO Vincent Maranghi, and persistent rumours of its waning influence, the bank is still the cog around which corporate Italy revolves. It has been extremely active in the equities market this year, thanks to its distribution capabilities, and has provided corporate finance advice to a wide range of Italian companies, drawing on its excellent connections.
