Best bank
Bank of America Best M&A
Goldman Sachs
Best equities house
Morgan Stanley
Best bond house
Citigroup
For the third year running, Bank of America wins the best US bank award. Its chief contender is Wells Fargo, which last year was elevated to triple-A status, the only US bank that has the top credit rating. Wells Fargo’s management team enjoys a good reputation in the eyes of investors, and its rivals regard it as a serious competitor.
But Bank of America offers greater coverage across the US as well as more products. Its cash management business is the top franchise in the US, whereas Wells Fargo is more of a regional player. BofA is also one of the top three syndicated loan arrangers in the country, behind JPMorgan and Citigroup. Its investment-banking franchise, meanwhile, is now a more entrenched business than some gave it credit for a year or two ago.
Its not all rosy, though: investors and competitors continue to wonder why the bank has not put more of an effort into becoming a bigger foreign exchange player. And investors weren’t best pleased with the price BofA paid for FleetBoston last year. Former sell-side analyst turned investor Tom Brown returned to the BofA bashing ways that he had set aside a couple of years back, mentioning among other things what he describes as the inability of the bank effectively to integrate its various retail banking platforms from previous mergers. At least the mutual fund scandal has not damaged the bank’s reputation as much as some feared it might, but it did give FleetBoston the upper hand in running the post-merger unit.
In M&A, Goldman Sachs continues to dominate, even if one excludes the league-table credit for providing fairness opinions for deals such as Bank of America’s acquisition of FleetBoston. JPMorgan and Lazard have both had good years – the latter especially so, having benefited from the senior M&A hires CEO Bruce Wasserstein has made since taking over the firm, such as financial institutions banker Gary Parr, who joined from Morgan Stanley. In terms of breadth of deals, though, Goldman Sachs remains almost untouchable.
Citigroup is still the debt house to beat. It’s the second-largest syndicated loans arranger, is a formidable player in asset-backed securities, a top-three high-yield underwriter, and of course still dominates the high-grade bonds market.
In equities Morgan Stanley wins for the second year in a row. It remains, with Goldman Sachs, the dominant prime broker. It’s a major cash and options trader, and with CSFB is the top algorithmic trading house, although others, most notably Goldman Sachs and Bank of America Securities, are ramping up. As its upcoming role as co-underwriter on Google’s IPO shows, Morgan Stanley remains a dominant underwriter but it is not just IPOs. It’s also, for the second year running, the main player in the US convertible bond market: it’s a top underwriter, and has been the lead bank of many of the largest deals, is one of the most highly respected convertible bond traders, and retains its top spot in Institutional Investor’s convertibles research rankings.
