Best bank – National Australia Bank
Best equity house – UBS
Best debt house – Barclays Capital
Best M&A house – Deutsche Bank
Australia’s housing boom has lasted longer than expected, boosting banks’ results. But many analysts are still critical of the banks’ overall performance. It is, as one points out, difficult to find one without a blemish. ANZ had problems with credit cards, Westpac’s acquisition of BT has caused concerns, and Commonwealth Bank of Australia has allowed its market share to drift. With this criticism in mind, the award for best bank goes to National Australia Bank. The bulk of its business, Financial Services Australia, continues to perform strongly. In the past year the bank’s underlying profitability increased by 13.2%. In addition, housing lending has grown by 21.9%. NAB also managed to increase its market share to 17.8%. Its operations in New Zealand also proved robust, with underlying profits up 32.1%.
NAB is still viewed as the bank for the small and medium-size enterprises. Other banks are attempting to take market share in this area but will find it tough to depose NAB. In corporate business, especially debt, NAB continues to lead the way. In the local Aussie dollar market the bank is well respected and at the end of 2002 topped the league tables. Although it has not led the largest number of deals, it has brought a diverse range of corporates to market, including telcos, retailers and utilities.
UBS’s equity operation in Australia is dominant, and it takes the award for best equities house. It was lead manager in all six of the capital-raising deals in excess of US$500 million undertaken since June 1 2002. In total, from July 1 2002, UBS executed some 35 deals.
UBS is also viewed by competitors and corporates alike as the market leader for jumbo placements in the Australian market. It has now been involved in all the open-priced jumbo placements to date, such as those for Amcor (US$1.2 billion) Macquarie Airports (US$670 million) and Qantas (US$800 million). UBS has also built on its reputation as a bank with strong secondary market capabilities. It retained its leading position in secondary market trading in terms of number of trades and value and increased market share from 11.8% in 2001/02 to 12.5% in 2002/03.
Barclays Capital takes the award for best debt house, having in four years transformed its Australian business. The diversity and volume of its underwriting activity has left many competitors standing. Over the 12-month period Barclays was mandated lead arranger and bookrunner on many of Australia’s most important debt transactions.
In the syndicated loan market it was Australia’s top arranger. A noteworthy deal was Southern Cross Airports Corp’s A$3.95 billion (US$2.63 billion) acquisition financing, the largest finance package ever arranged by an Australian corporate. Another big syndicated loan deal was Optus Finance’s A$2 billion loan.
In the bond markets Barclays also performed well, winning deals across the board and in different industries. There was Westfield Holding’s US$750 million offering, BHP Billiton’s US$750 fixed-rate note issue and Rio Tinto’s US$750 million deal. In the leveraged loan market, Barclays arranged Broadcast Australia’s A$450 million bridge, its A$175 syndicated loan and the company’s A$650 million domestic credit-wrapped bond issue.
M&A volumes tumbled in Australia in 2002 but Deutsche Bank’s position in the market didn’t, and it takes the award for best M&A house. At the end of 2002 it was ranked in top spot in the M&A advisory league tables, compared with 11th in 2001 – an impressive run that seems likely to continue.
It advised and arranged five of the country’s eight deals valued at over US$1 billion. These include the A$2.4 billion merger of BRL Hardy and Constellation Brands and Xstrata’s acquisition of MIM Holdings for A$5 billion in cash, the biggest deal this year to date.
Deutsche was also involved in the largest demerger in Australian history, WMC’s A$10 billion deal, which created WMC Resources and Alumina.
