Awards for Excellence 2018
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Citi wins the region’s best bank for financing award. The investment banking team, led by Chris Gilfond, head of capital markets origination at Citi Latin America, has enjoyed greater focus from management as the bank pulled out of all but one of the region’s retail markets. After a string of disposals in recent years, it has been reinvesting.
Jane Fraser, Citi’s chief executive in Latin America since April 2015, likes to cite the example of Citi Argentina, which has a bigger local balance sheet after the sale of its retail business to Santander Rio – now it is all just focused on its Institutional Clients Group (ICG) business.
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Chris Gilfond |
And like the other international banks in Latin America, Citi has leveraged its global network to lead its corporate focus. The bank’s local client list has shrunk from around 8,800 to just 1,500 companies.
At the same time, the list of global subsidiaries in the region rose just slightly (up 5% to around 6,000) and Citi was able to maintain regional revenues at $4.2 billion, up from $3.9 billion in 2012. Local companies now make up around 9% of total revenues, with international multinationals generating 57%, financial institutions and investors 23% and the region’s public sector 12%.
Citi dominates bonds and loans in Latin America and showed unparalleled expertise in this segment over the last year. It ran sovereign transactions for nine Latin American sovereigns (and its success for Ecuador made a head of DCM at a competitor admit that “Citi deserves it this year”). Citi also led deals for provinces and quasi-sovereigns. It ran high-yield bonds, investment-grade bonds, re-taps and asset-liability trades. It led on seven inaugural international issues – an important feature of the market last year.
Citi has a strong local market presence throughout the region and it uses this strategically. When Brazilian company Natura bought Body Shop, the deal was a combination of decidedly old retail formats (largely a door-to-door sales model buying a largely bricks-and-mortar model). Citi took out the acquisition finance with a local debt transaction in the first instance and then used the strong book generated among Brazilian investors as part of the sales process (demonstrating local recognition of the brands’ power and prestige) when the company went to the international markets for better tenor and pricing.
Citi also innovated. It led on two green bonds – a market that is just developing in the region – and was part of the team that managed to get investors to buy an ultra-long high-yield bond issue with the B-rated Argentina century bond.
Citi is by no means a one-trick debt house and can point to impressive advisory and leadership in other products. The bank is also hiring to make up for its relative weakness in Brazil and if it manages to improve in that market it will be a strong contender for the overall investment banking award next year.
