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May 2013

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  • Amanda Staveley earned an astonishing £30 million fee for her role in helping to secure Abu Dhabi’s £3.5 billion investment in Barclays in 2008, a deal on which Sheikh Mansour made a profit of more than £3 billion. Euromoney reveals the extraordinary tale behind that trade, the battle for £110 million in fees paid by Barclays to Mansour, and just how close-run a deal which saved the bank from part-nationalization was – which is currently the subject of an investigation by the Serious Fraud Office.
  • As a struggle for control nears a resolution, Turkcell’s strong operational and financial performance should return to centre stage, along with the management team that has delivered it.
  • The Sub-Saharan Africa survey is comprised of two parts: Best Sub-Saharan Africa research house and the Best managed companies in Sub-Saharan Africa.
  • The aftermath of the country’s margin-lending crisis and ensuing clean-up has given way to a rump of five big banks. So what differentiates them, and how will each fend off those determined to usurp them? Euromoney speaks to their CEOs in Lagos.
  • The senior FX trader at one of the top-15 banks in this year’s survey smiles grimly at his phone. He has been telling how the bank recently devoted several man-years to compiling and delivering vast files of historical data on FX trades, running to billions of individual items, to one of the US regulatory agencies. It had been sniffing around the market for evidence of banks failing to provide best execution to customers. There is no single source for historical price and trade data in the over-the-counter FX market and so the regulator had approached several large banks to supply it. The banks’ pleas that the regulator was looking in the wrong place for the wrong kind of evidence in a market that had functioned well throughout the financial crisis were dismissed. The regulator wanted the data and the banks would be ill advised to cross it.
  • The history of the Euromoney FX survey shows that periods of apparent stasis often give way to sudden and marked shifts.
  • Fewer and fewer banks can still claim to compete as full-service foreign exchange providers on a global basis.
  • FX banks fear duopoly pricing power of EBS and Reuters; ParFX shows focus on low-cost trading.
  • As the leading FX banks increase their grip on end-user volumes, their customers should take note of the banks’ own aversion to high market share among key providers.
  • Deutsche Bank holds on to top spot from resurgent Citi
  • For all the fragmentation in the FX market, the top four banks further consolidated their dominance of customer business, according to the 2013 Euromoney foreign exchange survey. As volumes rise again in FX, volatility returns and banks’ earnings from it recover, margins are still compressing. Customers are focused on cutting transaction costs. Banks face big demands on scarce IT resources.
  • Fragmentation and phantom liquidity bedevil the foreign exchange market with its proliferation of trading venues. Investors and corporates want to see the true depth of the market and what amounts they can really trade at the enticing prices being flashed at them. In a low-return world, these end-users are getting rigorous on trading cost analysis. Banks are developing new technology to respond.
  • After a poor 2012, the central bank forecast growth of 4% for 2013; it has already cut this to 3.1%. International investors are going elsewhere in the region. With domestic investment falling, Brazil will do well even to hit that target.
  • With Brazilian inflation now above the target rate, in mid-April the central bank announced a rise in interest rates for the first time since July 2011. But the move, in the face of stubborn and diffuse pressure (over 70% of the country’s inflation basket is now affected by inflation) was dovish – just a 25 basis point increase in the face of the market expectations of 50bp. The minutes from the central bank’s monetary policy committee meeting also showed that two of the eight members voted against any rise.
  • Finance minister Nizar Baraka says he can – and must – bring down Morocco’s gaping fiscal deficit. But after a debut dollar bond in December, how much can he change the country’s financial model in the midst of pan-Arab revolt?
  • All the roads on the approach to central Juba have been cordoned off. Heavily armed military personnel and police line the roads and prevent cars, motorbikes and pedestrians from completing their journeys. Frustrated and hot, many people who didn’t make the journey to work early enough are forced to return home. Others, mindful of short-tempered officials, try to edge their way forward, eager to catch a glimpse of the action ahead. Heightened security signals the arrival of Omar Bashir to town. This is the first time the president of Sudan has visited his neighbour in the south since independence on July 9 2011. In January 2012, South Sudan stopped transporting oil via Sudan as political tensions and a heated dispute over export fees escalated.
  • Education is high on the agenda for some of the banks in South Sudan. Ivory Bank often makes national radio broadcasts on Friday mornings to educate people about their banking products. The South Sudan Micro Finance Development Facility gives grants and loans to microfinance institutions to help them reach potential borrowers. But the lack of human capital in South Sudan creates another barrier to a thriving banking environment. Government regulations state that all banks must employ at least 90% local people, but with only 27% of the population literate, it is difficult to hire the right expertise.
  • Independent for just under two years, South Sudan still suffers from pervasive insecurity. Commercial banks have sprung up in the capital, selling themselves as a safe place for people to keep their money. But how are they making bumper profits when they are often little more than a place for deposits?
  • After a deluge of negative headlines from the eurozone this year, why are policymakers in emerging Europe still queuing up to pledge their allegiance to the single currency?
  • After my March column had been published, I suffered a pang of writer’s remorse. Had I been too harsh when I criticized the “crony capitalist culture” at Barclays’ investment bank and accused group chief executive Antony Jenkins of hypocrisy?
  • “Our funding costs will go up. But I’m quite happy to see that and our CDS spreads widen if that’s the price of demolishing the myth that we are dependent on state support” A eurozone bank CEO sees upside from the Cyprus depositor bail-in, although that’s easy to spot at a national champion bank
  • Hedge funds are a curious bunch. Take Dromeus Capital Group, which last November trumpeted the launch of its Greek-focused hedge fund, Dromeus Greek Advantage Fund, to bet on the recovery of Greek assets.
  • Euromoney prides itself on having international reach, but it seems that there is one corner of the world that our reputation hasn’t stretched to. On a recent trip to South Sudan, the world’s newest country, a senior bank official at a local bank branch in Juba misinterpreted Euromoney’s request for an interview on the growth of the banking system there.
  • It is not only bankers and asset managers figuring out new ways to finance the Mittelstand; so are the companies themselves. In February a group of entrepreneurs launched a new subordinated debt fund manager to address the problems firms have in sourcing debt at this level. The new firm, called Rantum Capital, was founded by Joachim Hunold, founder of Air Berlin, together with Michael Rogowski, former president of the BDI (Federation of German Industries); Wolfgang Hartmann, CEO of the Frankfurt Institute for Risk Management and Regulation; Heinz-Peter Schluter, founder of Trimet; media entrepreneur Karlheinz Kogel; Hans-Joachim Korber, former CEO of Metro; and Lothar Steinebach, former CFO of Henkel.
  • Engrossed in a book at the Frankfurt airport departure gate on a chilly March evening, Euromoney found ourselves the last passenger called to the BA flight back to London.
  • The Turkish central bank governor’s unorthodox policies have riled, muddled and, say some, outsmarted markets. He thinks they work. But is he trying to do too much with so many different instruments and targets?
  • “We are going to go armed and we will get this fucking money”
  • The SMEs that dominate the German economy continue to rely heavily on local relationship banks for finance. But the special circumstances of some companies and the eagerness of non-bank lenders to get into the market mean that funding through such instruments as Mittelstand-focused bonds, Schuldscheine and subordinated debt is becoming more prominent.
  • Sberbank CEO German Gref says he has led Russia’s biggest bank through a thorough transformation. It has grown onto the international stage and bulked up in investment banking. What are his objectives, and how does he see its role at home and in the region?
  • The Cyprus solution is inadequate as well as sending the wrong messages on depositors’ risks and free capital flows. Then there’s Slovenia... and Italy.