Best bank
Royal Bank of Scotland Best debt house
Barclays Capital
Best equities house
UBS
Best M&A house
Merrill Lynch
Best local partner
Collins Stewart
Royal Bank of Scotland is attracting attention across Europe for its increasing presence in a range of products including lending and securitization, in which it now has a portfolio across the region. In FX, too, it is now comfortably a top 10 bank globally. Corporate and investment banking gross profits for 2003 were up 11% over the previous year, at £7.15 billion ($13 billion).
And domestically, RBS is as strong as ever. It has banking relationships with 90% of FTSE 100 companies and it remains strong in cash management, retail banking and corporate services.
In debt capital markets, the past 12 months proved that UK banks cannot rely on winning mandates from key UK issuers. The large US dollar deal from the UK treasury excluded local banks, as did the inaugural UK covered bond from HBOS.
Citigroup had a great year, being involved with each of the highest profile issuers, including HBOS, GlaxoSmithKline, Network Rail, and the UK treasury in that dollar deal. It is the only bank that was involved in all of those key transactions. In line with its international expansion, HSBC is also doing well, although it is helped in the league tables by a number of small self-led deals. Lehman Brothers has particular strengths in securitization.
But in spite of its snub by the UK treasury, no bank can accurately claim to be such an integral part of UK debt as Barclays Capital, which takes the best debt house award. It is almost exactly level with RBS in syndicated loans, and it sits at the top of the bond league tables. Its work with Northern Rock has helped to improve further on the UK covered bond structure. With Aviva and others, it has helped to build insurance hybrid capital products. Leveraged finance and US private placements remain key areas.
In UK equities, competition is close between UBS, Merrill Lynch and Goldman Sachs. Top deals for Merrill Lynch include the Yell IPO, the RSA rights issue, a convertible for Logica and a deal for Burberry. The advantage for UBS, which takes the best equities house award, lies in its slightly better range of complex deals. UBS was the sole lead manager in the $1 billion block trade for AstraZeneca, which showed Europe how big right issues are supposed to be done. That deal required total discretion and an FX component. UBS also handled the Catlin IPO along with JPMorgan and Goldman Sachs. The bank also acted as a bookrunner in the listing of HHG on the London and Australian markets after its demerger from AMP.
Part of Merrill Lynch?s strength in equities comes from its M&A business, and it wins the M&A award this year. In almost every deal, it works with or opposite Morgan Stanley. Both banks are advising BP on its Russian acquisition. Both advised Spirit Amber in its acquisition of Scottish & Newcastle. Both advised the private-equity consortium that bought Debenhams. And they were on opposite sides of the Bank of Bermuda/HSBC and Selfridges/Wittington transactions. The plus for Morgan Stanley is that it is advising Amersham in its acquisition by GE ? a deal that excludes Merrill Lynch. But for the impressive run of repeat business as a sole adviser to RBS, the award goes to Merrill Lynch. RBS is a large, ambitious firm, so there are expectations of a large international acquisition. Clearly, Merrill Lynch would hope to be involved.
Collins Stewart, which takes the best local partner award, has drawn the admiration of other firms recently with two of its deals ? the Northumbrian Water IPO and an auction and listing for Center Parcs. Each of those was complex and called for superior execution capabilities.
