Regional Awards for Excellence 2011: Nordic and Baltic

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Awards for Excellence 2011
Nordic and Baltic Country Awards
All regions and countries

NORDIC AND BALTIC

Best bankSEB
Best M&A houseSEB
Best cash management house SEB
Best investment bankMorgan Stanley
Best debt houseDeutsche Bank
Best equity houseCarnegie

Best bank

There has been a tight race for this year’s best bank in the Nordics and Baltics between two contenders: Skandinaviska Enskilda Banken and Nordea. SEB, though, crosses the line first, ending a two-year winning streak by its rival.

Two factors underpin SEB’s success: it is well capitalized and better able to accommodate Swedish regulatory demands for higher tier 1 capital under Basle III. Nordea was left trailing, according to UBS analysts, because it has been forced to reverse its aggressive, pro-growth strategy to build up its capital base, symbolized by a focus on return on equity.

SEB’s RoE for the second quarter of 2011 is 11.6%, compared with 7.5% a year before: a bigger improvement than Nordea’s, whose RoE stands at 12% for the same quarter, against 9.3% last year.

The turnaround in the Baltics’ economic fortunes has also given SEB a fillip. When the region was teetering on the brink of devaluation and default, SEB’s considerable exposure – about 10% of its loan book was held by Baltic clients – was a drain on its balance sheet. But with the region’s economies revitalized, this exposure is contributing to the bank’s profits, and the cost of its funding has reduced accordingly. This is a boon in which Nordea does not share.

SEB has also been helped by the sale of a poorly performing retail bank in Germany. Analysts report that it is using the proceeds to strengthen its wholesale presence across the Nordic region as well as to boost its return on equity. Again, Nordea has not had these advantages.

Additionally, SEB has been particularly strong in corporate activity, although this has been a sluggish sector over the past year. An orientation towards transaction-based business ensures that SEB has 90% of the Swedish M&A market.

SEB’s final winning attribute fell into place in December 2010, when it became the first Nordic bank, and one of the first international institutions, to provide cash management, trade finance and foreign exchange services in offshore Chinese renminbi.

Best investment bank

The winner of this year’s best investment bank award for the region is Morgan Stanley. It has played a part in the region’s largest and most important mergers and acquisitions and equity capital market deals and has by far the highest volume of completed deals: 13, compared with eight for the next-largest contender, JPMorgan.

Morgan Stanley ranks top in completed M&As and second in the ECM leagues. Among the past year’s highlights were Danish telecom operator TDC’s sale of its Swiss subsidiary Sunrise and the Central Bank of Iceland’s sale of Danish bank FIH.

Morgan Stanley also took part in Swedish investment bank Carnegie’s acquisition of HQ Bank and HQ Fonder. Also involving Morgan Stanley were the €1.4 billion re-initial public offering of TDC, which was the largest European telecom IPO since Belgacom’s in 2004, and the €1.5 billion IPO of internet radio company Pandora.

Best debt house

Deutsche Bank has won the best debt house award after ranking top across the board on the regional debt capital markets. It took part in a series of large deals and arranged the largest corporate bonds in every Nordic country: TDC (Denmark), Teliasonera (Sweden), Statoil (Norway) and Landsvirkjun (Iceland), the latter being the first such deal since the nation’s financial crisis began in 2008.

Deutsche was also involved in the biggest Nordic and Baltic corporate bonds of the past year: TDC’s €2.25 billion-equivalent ­financing in February; the first international hybrid since 2005, Dong Energy’s €700 million issue in January; and the first ever European hybrid liability management, Dong’s €500 million tender, also in January.

The bank issued the first Icelandic bond since the crisis, Landsvirkjun’s $100 million deal in September 2010, which increased to $150 million, as well as the largest yankee bond from the region: Statoil’s $2 billion financing in August, split between a $1.25 billion seven-year and a $750 million 30-year issue.

Best equity house

Carnegie takes Euromoney’s award for best equity house after it acted as lead manager or co-lead manager in six of nine IPOs over $100 million in the Nordic and Baltic region – in other words, two-thirds of all big issuers included Carnegie in the IPO syndicate. The bank also took a 28.9% market share in bookbuilding – 28 deals in total.

It participated in six of the 10 largest Nordic bookbuildings during the period under review (April 1 2010 to March 31 2011) and was the sole Nordic selling agent and the only investment bank besides Goldman Sachs involved in the Skr28 billion ($4.4 billion) accelerated bookbuild in Volvo – the largest Nordic ABB ever.

Best M&A house

SEB wins best M&A house in the region. It has been a powerhouse, achieving impressive growth in almost all markets; in Sweden it dominates the landscape, with 90% of deals. The bank has been responsible for many of the most important transactions in the Nordic region, including (alongside Crédit Agricole CIB) the acquisition of US software company Intergraph Corporation by Swedish technology firm Hexagon – a €2.6 billion debt and equity financing package that was the largest transaction in Sweden of the year.

Best cash management house

SEB
has also grown consistently in cash management. Its market share in the Baltics has increased to 30%, while 95% of the Nordic and Baltic region’s largest 100 corporates are SEB cash-management clients.

It has the largest integrated cash-management network in Europe and covers 34 countries (29 European countries, Canada, China, India, Singapore and the US). Its network provides a single point of entry for sales and support in all participating countries. The infrastructure is the only one in Europe that can transfer liquidity across the continent on the same day. The bank recently opened a branch in Hong Kong and has put corporate support into operation in China.