Even as the world’s biggest banks took difficult steps last year to de-risk and meet stringent new requirements by buttressing their capital reserves, they were maintaining – and in many cases increasing – their market share in critical capital markets and investment banking businesses. They did so by delivering superior service quality to institutional and corporate clients around the world.
Every year, Greenwich Associates recognises banks that provide institutional and corporate clients with the highest quality service and products. In 2011, Greenwich Associates named 116 Greenwich quality leaders in five geographic regions in businesses including securities trading, debt and equity capital markets, corporate banking, cash and treasury management, derivatives trading, and foreign exchange (FX).
The results: Deutsche Bank and JP Morgan were each named a 2011 Greenwich quality leader in 12 categories. The closest competitor to these market leaders was HSBC, which was named a 2011 Greenwich quality leader in 10 categories. All three of these banks have built true global platforms.
“In every regional market in the world, businesses such as securities trading, debt and equity capital markets, FX, and treasury management are dominated by the largest regional player or players and a small handful of global competitors,” said Greenwich Associates chief executive officer (CEO) Steve Busby. “While the world’s biggest banks continue to face significant challenges, their competitive positions in these key business lines have not been weakened, and in some cases are actually stronger than they were before the onset of the global crisis.”
Deutsche Bank, which was named a 2011 Greenwich quality leader in nine European product and business categories, has built a strong presence in every part of Europe, save France. Across the region, Deutsche Bank is viewed by investors and companies as having a leading platform in equity and fixed-income sales and trading and in debt capital markets origination. Also counted among the top pan-European competitors are Barclays Capital, BNP Paribas and JP Morgan, each of which was named a 2011 Greenwich quality leader in three European categories.
In the US, each of the country’s two leading universal banks – Bank of America Merrill Lynch (BofA Merrill) and JP Morgan – was named a 2011 Greenwich quality leader in seven business or product categories. These two top performers share several important traits, not the least of which is a large balance sheet that can be deployed in the service of key corporate and capital markets clients. For JP Morgan, the strong performance in the 2011 Greenwich quality leaders programme demonstrates the bank’s ability to maintain the highest standards of quality in customer businesses as it defends and consolidates the market share gains it achieved as one of the few ‘winners’ during the global credit crisis.
“For BofA Merrill, so much attention has been focused on legacy problems and potential liabilities that people overlook the fact that the successful integration of Bank of America and Merrill Lynch has produced a powerful combination from an investment banking and corporate banking perspective,” said Greenwich Associates consultant John Colon.
Asia (Excluding Japan)
In Asia, HSBC leads all competitors in 2011 by being named a Greenwich quality leader in seven business and product categories. Morgan Stanley was named a Greenwich quality leader in four categories, followed by Citi, CLSA Asia-Pacific Markets and Deutsche Bank, each of which was named a Greenwich quality leader in two categories. Perhaps more than any other market in the world, the competitive positioning of leading financial service providers in Asia is defined by specialisation.
In addition to its strong presence in corporate banking and cash management, HSBC’s market-leading position is built mainly on its strength in debt capital markets, fixed-income sales, trading and research, and FX capabilities. Morgan Stanley, by contrast, is ranked by Asian institutions as the quality leader in equity sales, trading and research, as well as in flow equity derivatives products.
“Although global banks continue to dominate this market, it is important to note the considerable gains being made by local Asian banks in market share and service quality,” said Greenwich Associates consultant Markus Ohlig. “These local players have not yet reached the quality standards set by western banks, but they are closing the gap.”
In Canada, RBC Capital Markets was named a 2011 Greenwich quality leader in eight product or business categories, followed by BMO Capital Markets, which won that designation in six categories. “RBC Capital Markets’ market-leading position derives from a universal platform featuring strength and depth in capabilities across the product suite,” said Greenwich Associates consultant Peter Kane. “BMO Capital Markets’ success in this year’s Greenwich quality leaders programme can be attributed largely to the firm’s top-rated capabilities in Canadian equity sales, research, trading, and capital markets.”
Few financial service providers around the world dominate a market to the extent to which Nomura Securities dominates Japan. Institutions rank Nomura as the top quality provider in a total of eight business and product categories, including yen and non-yen fixed-income sales and research, domestic equity sales, research and trading, and overall service in interest-rate derivatives. Mizuho Securities, named a 2011 Greenwich quality leader in three categories, achieves this designation in yen and non-yen fixed-income trading and joins Nomura Securities as a Greenwich quality leader in yen fixed-income sales.
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