Awards for Excellence 2017
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The best bank for financing award will surprise those who set great store in league tables – but maybe they have been looking at the wrong league tables. While Credit Suisse is not a leader in volume terms, and in some areas is far from it, Dealogic data show that it is one of the most profitable houses across investment banking. In fact during the awards period, if Australia is added to ex-Japan Asia, no house made more from public deals in the region.
This award recognizes a model that fits difficult times for investment banking in Asia. The private bank brings entrepreneurs into the business – the lifeblood of Asian wealth. From there, investment banking takes care of as many as possible of their needs. As a commitment to seamlessness, both wealth and investment banking now appear within a single reporting entity, called Apac, under a single P&L, with considerable effort made to ensure remuneration models keep the two sides in harmony.
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Carsten Stoehr, |
That done, the bank takes advantage of a 60% increase in risk-weighted assets by the bank to the region and deploys the balance sheet sparingly but smartly, focusing on bespoke self-led transactions and structured lending where the solutions are creative and the fees high (and seldom split). It goes to places where a lot of others would not be comfortable – from its much-discussed Indonesia exposure to transactions in Pakistan, Vietnam, Sri Lanka and Papua New Guinea, most of them originated by frontier rainmaker Rehan Anwar. It becomes an early entrant in geographies and products that will become progressively more useful as they grow. Much of the work is private and does not show up in public league tables.
Risk is one of the things that makes competitors doubt the Credit Suisse model. Anyone who commits $300 million of capital to a deal in Papua New Guinea has questions to answer no matter how briefly it is on the books, but insiders insist that any new exposure has to go through an exacting risk evaluation and that political risk insurance balances some of the more vulnerable deals. Euromoney investigated the model a year ago with particular emphasis on Indonesia, but Credit Suisse was not the name that kept cropping up with troubling exposures there.
If there is a weak point, it is China. The bank’s strength in southeast Asia, Korea and Australia is not matched there. But it does have its strengths on the mainland, with country CEO Mervyn Chow’s team handling big deals for clients across the credit spectrum from China Huarong to ChemChina to China Evergrande during the review period. It also has among the closest relationships on the Street with Alibaba through Vikram Malhotra.
“No other house is as productive with what it has,” says one competitor. Carsten Stoehr’s financing group is a worthy recipient of this award.
