Bank of the quarter: Credit Suisse returns to the top table
Highlights: Rising from seventh to second place in Dealogic’s Emea core investment banking revenue ranking for the year to September Advising Resolution on buying Friends Provident, the largest UK public acquisition this year
Credit Suisse underlined its credentials as one of Europe’s winners from the financial crisis and showed its recent recruitment drive is bearing fruit with strong performance in its investment banking division.
Jim Amine, co-head of global investment banking at Credit Suisse, said: “We have made our franchise clients a priority, and that is part of a strategy we have been focused on for the past two years. That focus is now paying off.”
The strategy required the bank to overhaul its coverage model by hiring top bankers across Europe as well as changing the management structure by appointing a series of chief executives with responsibility for all of the bank’s products on a country-by-country basis.
The aim was to put the bank back in the thick of the biggest investment banking mandates in equity and debt capital markets, and mergers and acquisitions advisory.
As one of a handful of banks that took no state money during the crisis, it has been able to recruit freely from rivals, but it has maintained a quality-only approach, instigating a policy that prevented it hiring anyone who had been made redundant.
Instead, it lured what it called “game-changers”, individuals who could bring big clients – and deals – with them. In the past quarter, it paid off when Credit Suisse advised holding company Resolution on its “bear-hug” acquisition of insurer Friends Provident, the largest UK public acquisition this year. The banker running the deal for Credit Suisse is Chris Williams, who joined in May and brought the Resolution relationship from Citigroup.
The Resolution deal also cemented the bank’s position at the top of the league tables for advising companies in the financial institutions sector, according to Dealogic. Its strong year in financial institutions group advisory was typified by the role it won advising the UK Treasury on the bailouts of RBS and Lloyds Banking Group.
Rivals said Credit Suisse is in the spotlight because the glut of equity and bond issuance plays to its capital markets strength, but the bank argues it is the changes to its advisory and coverage model that are also having an impact.
Amine said: “Our success is also driven by the fact we are actively engaged in a strategic dialogue with our clients. We have dominated areas that have been active this quarter such as equity capital markets, financial institutions and the Middle East.”
The bank has revamped its Middle East business in the past year, delivering three high-profile mandates in the past quarter. It acted as exclusive financial adviser to Qatar Holdings on its acquisition of stakes in Porsche and Volkswagen in a deal worth $10bn (€6.8bn) – the largest overseas investment by a sovereign wealth fund.
In two further Middle Eastern transactions, Credit Suisse advised Atic, a subsidiary of investment company Mubadala Development on its $3.1bn acquisition of Singapore’s Chartered Semiconductor Manufacturing. The bank also advised Orbit Group and Showtime Arabia on the merger of equals of their pay TV operations.
Its equities business also acted as a bookrunner on a slew of rights issues, including an $11.8bn offering by UK-listed mining group Rio Tinto, as well as capital raisings by property developer Barratt in the UK, German semiconductor company Infineon and the $5bn sale by the Swiss Government of a stake in rival UBS.
Amine and his European colleagues, such as Sebastian Grigg, who runs UK investment banking, and David Livingstone, who is responsible for European M&A, have reversed a perception from less than three years ago – that the bank was shifting its focus to the mid-market and surrendering its seat at the top table.
Credit Suisse is backing its renewed confidence by providing capital from its balance sheet to selected clients, which seems to contradict claims made by some inside the firm that the bank was losing on bond mandates because it was not providing balance sheet lending in other areas.
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