Best bank
VUB Best debt house
CSFB
Best equities house
ING
Best M&A house
JPMorgan
It has been a tougher year for Slovakian banks than for their neighbours. Although banks in Poland, the Czech Republic and Hungary have been recording good profits, in the Slovak Republic, operating profits have been down for the biggest three banks. They blame this on a fall in retail deposits, as people transfer funds to asset management companies; and on narrowing loan spreads.
However, VUB, the winner of the best bank award, managed to increase net profit, unlike competitors Tatra Bank and Slovenska Sporitelna, partly through cost-cutting and restructuring. The bank managed to reduce operating costs by 8%, mainly through a 6% reduction in headcount.
It also performed well in corporate loans. It was lead arranger for a $120 million loan for Eurotel Bratislava, the largest Slovakian corporate loan in the past 12 months according to Dealogic. It managed to increase its corporate loan book by 20%, and also increased its SME business ? a trend it says should continue this year.
CSFB wins the best debt house award for arranging two bond deals for the Slovak Republic in 2003, for a total of e750 million. The sovereign returned to the market in May 2004, in the midst of global emerging-market instability, only to price its e1 billion issue at 18 basis points over mid-swaps, which at the time was the tightest spreads ever for a CEE bond.
ING Bank wins the award for best equity broker, for having a 41% share in equity trading turnover in 2003. It continued its dominance in the first quarter of 2004, though local brokers Focus Finance and J&T Securities both gained market share. J&T Securities is a company to watch. Its asset management arm, no doubt doing well from the migration of funds from retail deposits to mutual funds, recently bought an asset management company in the Czech Republic.
Finally, the best M&A house award goes to JPMorgan. The bank advised MOL, as it has since 2000, on the acquisition of Slovnaft. The Hungarian oil company bought another 28% of Slovnaft for around $147 million, through a call option. JP Morgan also advised Erste Bank on the acquisition of a further 10% stake in Slovenska Sporitelna. As in the Czech Republic, smaller M&A activity between local companies has been particularly intense in the Slovak Republic.
