Best bank
Santander Central Hispano Best debt house
Citigroup
Best M&A house
Goldman Sachs
Best equities house
UBS
Best at risk management
Deutsche Bank
Best at treasury services
Santander Central Hispano
Best at cash management
Citigroup
But with its more comprehensive retail presence, Santander can boast a broad presence in every major Latin market, while Citigroup, outside Mexico at least, is essentially a corporate bank that does a very small amount of consumer banking on the side. Indeed, Citi has been scaling back its consumer operations.
Public profit figures figures also make it clear that Santander is a first-rate bank in every market in which it chooses to compete. Its return on equity figures range from 22.3% in mature Chile to 32.6% in Brazil.
Meanwhile, Citigroup Latin America seems to be in some disarray. In recent months, it has lost not only its CEO, Jorge Bermudez, but also its co-head of investment banking, José Olympio. The new Latin America CEO, Manuel Medina-Mora, will take on all of Bermudez?s responsibilities while at the same time retaining his previous position as CEO of Banamex, the Mexican franchise. And one of the first things on his plate will be an SEC investigation of Citigroup?s accounting during the Argentine financial meltdown.
Banco Santander wins the best bank in Latin America award, for demonstrating a real commitment to banking in the region ? as well as setting best-practice benchmarks in most of the countries in which it operates.
It also wins the award for best treasury services in the region. The bank?s treasury department is the one area that really does have a unified team across the region, with 300 professionals in Latin America who work alongside another 300 in New York and Madrid. These people provide Santander?s thousands of corporate clients in each country with a full menu of risk management tools, from interest rate futures to foreign exchange. Indeed, in such countries as Mexico, these products are offered even to retail customers, in the form of structured products that help Mexicans with as little as $4,000 to hedge foreign exchange, interest rate or even stock-market exposure.
In general, if you?re in the market for treasury products in Latin America, no matter what country you are in or how small you are, Santander will be there for you. And no other bank can say that.
If you?re a major multinational, either inside or outside Latin America, however, and you want to work with the very best derivatives guys in the world, then you won?t look to Santander: you?ll probably go to either JPMorgan or Deutsche Bank. JPMorgan has won the risk management award in the past, largely because of its incredible sophistication and contacts at the very highest levels of corporate Latin America. This year, however, the award goes to Deutsche Bank, and its 25-person dedicated Latin America structuring and derivatives team.
The international debt capital markets are naturally wary of smaller names, smaller deal sizes and unusual products such as vendor finance paper and leases, especially when they come out of Latin America. And Deutsche Bank, which has integrated its derivatives team into its debt capital markets operation, prides itself on being able to structure almost anything and find a buyer for it.
It helps, of course, that Deutsche is a leader in credit derivatives, which can hedge all manner of risk. It also has a very strong illiquid corporate debt trading business, which closed more than $3 billion of transactions in 2003. Deutsche also has a strong Argentina business, finding ways for corporates to fund themselves despite the fact that the sovereign remains in default.
Deutsche?s debt capital markets team has done very well too in 2004, snatching a string of mandates. But there?s no doubt which bank has been dominant in debt capital markets. Citigroup has always had a solid bond franchise, backed by a syndicated loan operation that has barely any competition. This year, again, the Citigroup loan desk did a spectacular job, leading 24 issues worth $4.7 billion ? roughly the same as the next three banks combined.
Citigroup also has a world-beating restructuring team, which followed up sovereign triumph in Uruguay by lead managing a hugely successful $1.27 billion deal for Banco Hipotecario in Argentina.
Meanwhile, in equities, only one bank has proved itself capable of bringing new Latin names to international markets, and that is UBS, which wins the best equities house award for the third year in a row.
This year, UBS brought a series of small but impressive IPOs to market. In Mexico, housing company Urbi came with a $265 million offering that was 18 times oversubscribed, while its rival, Sare, had a $40 million IPO. And in Brazil, UBS was sole global coordinator on a $265 million IPO for cosmetics company Natura. UBS also has a very strong sales, trading and research team.
Goldman Sachs is not always on top of the Latin league tables: its M&A bankers hunt for big deals, and some years those deals do not happen. This year, however, there were six M&A deals in the region worth more than $1 billion, and five of them had advisers; Goldman Sachs advised on all five.
The biggest was the deal between Belgium?s Interbrew and Brazil?s Ambev. It was a complex deal, with a headline value of $11.7 billion, which involved Ambev?s controlling minority shareholders selling their stake to Interbrew, and Interbrew in return selling its Canadian Labatt subsidiary to Ambev. The advisers were JPMorgan and Citigroup on the Ambev side, and Goldman Sachs and Lazard on the Interbrew side.
Goldman also advised Mexican telecoms firm Telmex on its acquisitions of AT&T Latin America for $203 million, MCI?s stake in Brazil?s Embratel for $400 million, and Chile?s Chilesat for $117 million. By mid-2004, Goldman was at or near the top of every Latin M&A league table ? an impressive achievement given that it has no banking relationships to leverage.
