BEST BANK
ANZ
BEST EQUITY HOUSE
UBS
BEST DEBT HOUSE
Citigroup
BEST M&A HOUSE
UBS
ANZ wins the best bank in Australia award for several reasons. Chief among them is its boldness in taking meaningful steps outside Australia and New Zealand, principally into Asia. Although some of its competitors have retreated from Asia in recent years, ANZ has been quietly expanding its presence and now boasts a true regional footprint, with offices in China, Hong Kong, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam. With the economy visibly slowing in Australia, the easy-money years for domestic banking are clearly over, making a viable overseas strategy all the more relevant.
ANZ also stands out from the competition because of its strong financial results. Despite the costs of absorbing the acquisition of National Bank of New Zealand, ANZ has reported consistent increases in profits, with a total return to shareholders of 17% for the year to September 2004. Half-year results to March 2005 showed continued robust growth and strengthened financial ratios. Return on average shareholders’ equity for the half-year was 17.2%, net interest margin a respectable 2.4% and the dividend payout ratio a generous 64.7%. With operating expenses running at just 46.3% of income, ANZ is clearly running a lean but very profitable operation.
UBS retains its dominance in Australian equities. It raised more money and executed more deals than any of its competitors in the 12 months under review, completing 57 transactions for a value of more than $8.1 billion, including eight of the 19 capital raisings in excess of $344 million, a market share of more than 22%. Its dominance in the secondary equities market is equally impressive, with, at 12%, the leading market share and 55 analysts covering more than 270 stocks.
Highlights of the year included the most popular Australian IPO, the $420 million Babcock & Brown offering, which raced to a 60% premium over its issue price, and the largest Australian equity transaction completed during the period, the $840 million Macquarie Communications Infrastructure Group issue.
Citigroup is the clear winner of Australia’s best debt house award, with a dominant year in all aspects of the debt markets and a 23% market share in the 25 largest debt deals. The firm has committed $20 billion of capital to the Australian market and the benefits of that are beginning to show.
Citigroup’s achievements during the year included the A1 billion and $1 billion financing for ANZ; a $2.6 billion bond deal for Westfield Group, the world’s largest ever bond offering for a Reit, and a $841 million syndicated loan for TXU Australia completed in the face of credit difficulties for TXU Corp.
In secondary trading, Citigroup also ranked first, with double-digit market shares in trading of corporate notes, government and semi-government notes and credit derivatives. Citigroup also ranked first in leading G3 issues by Australian issuers, managing 16 issues to raise $5.65 billion, a market share of almost 18%.
UBS wins the best M&A house in Australia award since it is the clear market leader. In the period under review, it advised on almost half of all deals in Australia, including $38 billion of completed M&A and seven of the 10 biggest transactions and the four largest.
UBS’s team of 100 professionals in Australia provide extensive sector coverage, including consumer, retail, metals and mining, financial institutions and technology.
Key deals were the $19 billion Westfield merger, the $350 million acquisition of Australian oil company Novus Petroleum by Indonesian energy firm Medo Energi, and the $1.9 billion acquisition of Tab by Tabcorp. In addition to these assignments, UBS secured lucrative and high-profile mandates to defend WMC Resources against takeovers from Xxstrata and BHP Biliton, National Foods against bids from San Miguel and Fonterra, and Hills Motorways against the unsolicited offer from Transurban.
