On Monday, Euromoney commissioned year-to-date league tables for banking in Asia: both for Apac, which includes Japan and Australia, and Asia ex-Japan, which does not.
We looked not only at the staples of investment banking – ECM, DCM and M&A – but also the revenue Dealogic believes banks make from those transactions.
We’ll start out with the disclaimer: yes, we know that these tables do not capture all activity, and miss out, for example, the private deals that are so lucrative for many houses. We recognize that fee calculations even on public deals can be disputed, and that league tables aren’t everything.
Nevertheless, they’re a useful data source, and here are some of the key points that arise:
Goldman’s back, but not on the fees
This year it has been on a far stronger footing, particularly in ECM – where it leads in Apac and is the strongest non-mainland house in ex-Japan Asia – and M&A, where it leads the region on any definition. Its new $5 billion fund with CIC demonstrates great strength on the mainland.
It’s odd, though, that Dealogic shows it only ninth in Apac for revenue and off the table in Asia ex-Japan. Is DCM really providing so much of the street wallet in Asia as to make that difference? Or has Goldman uncharacteristically dropped fees to win back share?
Granted, an awful lot of the work where Goldman makes its money never makes it anywhere near a league table, but the contrast is striking.
JPMorgan – other way around
JPMorgan’s standing is the reverse of Goldman’s: nowhere particularly high in volume league tables (10th in ECM, eighth DCM, fifth M&A, all for Apac) but right up there for fees (second, though a mile behind Morgan Stanley).
JPMorgan has been agreeably dull in Asia lately: no dramatic new strategy, no groundbreaking diversions, just steadily earning money.
Probably the only house where league tables and fees look fully matched is Citi, strong in all trades, leading none.
The mainlanders are getting paid
It’s nothing new to see Asia ex-Japan league tables dominated by local houses, particularly in DCM. So Citic Securities topping that category and ECM is not as eye-catching as it once would have been, and neither is the presence of mainland houses in eight of the top 10 DCM positions.
However, it is often argued that the deals these houses do are not remunerative, yet Citic Securities – in conjunction with CLSA these days – now tops the ex-Japan Asia revenue table.
Japan and Australia pay off
There’s a tendency to think that Asia ex-Japan is all that really matters. People who think that way haven’t looked at the revenue league tables.
Morgan Stanley’s fee income doubles when Japan and Australia are added into the picture, partly reflecting the strength of the bank’s JV with MUFG. JPMorgan, too, gains enormously when Australia and Japan are added to the picture, and to a lesser extent Citi does too.
Credit Suisse, purveyor of fine frontier deals, heads in the other direction. Curiously HSBC doesn’t feature on either table.
Yes, we know Deutsche makes most of its money from a global markets business that league tables don’t reflect, and much of the rest from transaction services, but still. Ninth in ex-Japan ECM, 10th in Apac M&A, nowhere on the fee tables.
Bank of America Merrill Lynch doesn’t look a whole lot better, and HSBC looks like a table from five years ago – nearly all DCM-related activity.