With the exception of JPMorgan, US banks have now lost their position of dominance in credit research. At the bottom of the last credit cycle, US banks swept the board in Euromoney’s credit research polls. Since then, however, it is their European counterparts that have proved themselves more useful to their clients. Société Générale, with wins in investment grade and overall trade ideas, as well as a host of first places in sub-categories including investment-grade credit strategy, is the big upward mover in this year’s poll. Last year, the French bank placed fifth in overall investment grade, and failed to win a single category.
JPMorgan was the only real success story from the US. It won overall high yield and overall structured credit trade ideas. But other US research houses have fallen away, including Citigroup, which fell from first to second in investment-grade credit strategy, which it had dominated for the past three years. Another is Morgan Stanley, which was at one time the king of investment-grade research but has now dropped to a lowly 10th.
Barclays Capital deserves a special mention, after earning a top-10 place in every category in this year’s poll. The British bank has shown strongly across the spectrum of categories in the poll for the past few years, and now seems to be running a tighter ship than ever.
The successful banks in this year’s poll are those that provide comprehensive research services, rather than specializing in certain areas. The benign credit environment of the past few years has enabled investors to be more choosy with the research available to them, and most seem to favour a one-stop shop for credit research. As the cycle turns, it will be interesting to see if there’s a return to the more specialized research houses of the past.
