The face of investment banking has altered quite significantly over the past year. The Banker celebrates those institutions that have been most innovative in adapting their businesses to this changing environment.                                                                                                                                                                                                

Investment banking is back, but not quite as we know it. Notwithstanding jitters over the US Federal Reserve’s cautious path to a normal monetary policy, the past year has witnessed probably the most sustained period of market stability since the financial crisis began in 2007. Emboldened investors have been willing to buy into anything from Rwandan sovereign bonds to Greek bank shares. And executives are confident enough to undertake blockbuster merger and acquisition (M&A) activity, with Vodafone selling its stake in Verizon for $130bn.

Investment Banking Awards 2013 - winners 

But the face of investment banks has changed. Most are now run by a new generation who rose to the top as the crisis unfolded. From their first day in charge, they have managed organisations through straitened times. Tougher capital and liquidity requirements and the clampdown on proprietary trading are coinciding with the expansion of electronic trading across almost every kind of asset. This combination erodes margins in one business line after another.

As a result, every investment bank is reviewing its strategy, identifying what activities can make money, and how. For some, this process is nearing completion. For others, it is only just beginning. For all banks, the comparative stability of the past year has permitted calmer decisions that should stand the test of time. 

This year’s winners list is dominated by banks that started their transformation process early, often simply due to force of circumstances. This year’s awards perhaps pay tribute to the wisdom of the US government’s decision in 2008 to undertake a prompt and vast clean-up and recapitalisation of the country’s financial system. The post-crisis deleveraging has made bank balance sheet a scarce commodity, and US banks have somewhat cornered the market. 

Our global winner, Bank of America Merrill Lynch, is a leading example of a bank that was obliged to transform itself early, in response to its giant 2008 merger and the weight of legacy assets. In 2013, it has become a top player even at the heart of the eurozone – the leading bookrunner for corporate bonds in euros in Germany. A significant number of European equity offerings over the past year have also been run solely or mainly by US banks, and all three banks cited in this marquee award category are American. 

But few industries change as rapidly as investment banking. The growing focus of the US authorities on stress-testing their banks will tighten balance sheet usage. A stabilisation of the European economy will allow its banks to build up their capital bases. And new players from emerging markets are snapping at the heels of their developed market counterparts. US investment banks are enjoying their moment in the sun, but next year’s winners list could look very different. 

Judges

Philip Alexander is senior editor, investment banking and capital markets, at The Banker.

Bill Bartram is the founder of Independent Risk Management Solutions. He was previously an advisor on hedging and financing strategies for the real estate sector at JC Rathbone Associates.

José de Gregorio is a professor of economics at the University of Chile. He was governor of the Central Bank of Chile from 2007 to 2011.

Jonathan Drake is chief operating officer of Singapore-based soft commodities trader RCMA. He was previously head of sugar at Cargill.

Symon Drake-Brockman is managing partner of private equity and debt fund Pemberton Capital Advisors and the former chief executive of global banking and markets in the Americas at RBS.

Sofiène Haj-Taieb is the co-founder and chief executive of La Francaise Investment Solutions. He was previously a deputy head of markets at Société Générale Corporate & Investment Banking.

Melissa Hancock is the Middle East and Islamic finance editor at The Banker.

Casper Hejsteeg is a senior partner and portfolio manager of the Dutch e2Cleantech fund and Wermuth Asset Management’s Green Gateway Europe-Tatarstan Cleantech Fund.

Jean-Pierre Lardy is founder and president of credit and portfolio risk advisory firm JPLC, and a former credit portfolio risk manager and credit derivatives trader at JPMorgan.

Mike Nawas is co-founder of structured finance advisory boutique Bishopsfield Capital Partners. He was global head of fixed-income capital markets and structured finance at ABN Amro prior to its acquisition in 2007.

Narcisa Oprea is a partner and head of Romanian capital markets at law firm Schoenherr, and a board member of the Bucharest Stock Exchange.

Silvia Pavoni is the economics editor at The Banker.

Jonathan Rowland is a co-founder of leveraged finance advisory firm Tomorrow Partners. He was previously European head of financial sponsors coverage and co-chair of the European leveraged finance committee at Citi.

Paul Wallace is the Africa editor and capital markets writer at The Banker.

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