LATEST ARTICLES FROM BANKER EDITOR
Back in the shop for Christmas
Still M&A bankers can always look to Germany, where the long-awaited consolidation now seems imminent. However, those who were speculating on a Citi/Deutsche deal obviously were not listening to Citi CEO Chuck Prince, who had already said that the bank was more likely to do fill-in deals (witness the Washington Mutual deal) than transformational ones.
Chance to tell a giant to cut the crap
HSBC is advising Rosbank on its retail strategy and AT Kearney, which seems an unlikely choice, is advising HSBC on its investment banking model. The project reports to Mark Ramsey, acting head of global equities. Like every bank, HSBC has to figure out how to cover the high costs of research by means of paltry broking commissions, especially since research working with corporate finance is now a no-no. The answer is simply to cut the crap.
Making a splash with cedulas
A boom in Spanish covered bond issuance has been good news for the savings banks. Head of capital markets at Caja Madrid Carlos Stilianopoulos tells The Banker about dealing with commercial banks, cooperation with smaller cajas and plans to extend the market abroad.“By definition, a triple-A market is relatively boring,” according to Carlos Stilianopoulos, head of capital markets at Spain’s Caja Madrid. But if he is right that Spanish covered bond issuance has grown by 90% in the past year, then a little excitement is surely justified – especially for Caja Madrid, which is at the heart of it.
Boomtime for covered bonds
Anthony O’Connor reports on why covered bonds are becoming a favourite funding tool for banks.Although the legislation has been in place for Spanish banks and financial institutions to issue cedulas or covered bonds since the early 1980s, it is really only in the past couple of years that issuance has boomed. According to market data compiled by savings bank La Caixa, at mid-December 2003, nearly -60bn of cedulas hipotecarias – covered bonds backed by residential mortgages – are outstanding from nine issuers, with 32 transactions to date. Equally striking are figures for the end of 2003, which show that cedulas hipotecarias will account for about 13% of all mortgage funding, almost double that of 18 months ago. But opinion is split about why cedulas are becoming a favourite funding tool.
West Europe
Western Europe provides the largest group of banks in our analysis: 380 (58.9% of the total). However, smaller banks again predominate with only one bank from the region appearing in the European Top 30 (by Tier 1 capital) and only 10 making the Top 100. This is also perhaps indicative of the limited opportunity for growth in the more mature markets of western Europe and certainly indicative of the recent economic slowdown in the region.
South Europe
South Europe is the combination of the south-east Europe grouping (which includes Greece, Turkey, Romania, Bulgaria, Cyprus, Albania, Macedonia and Serbia & Montenegro) and the remaining countries of the former Yugoslavia (Slovenia, Croatia, Bosnia Herzegovina and including Republika Srpska, and Kosovo).
East Europe
The east European grouping consists of 145 banks (22.4% of the total) and is essentially drawn from the European countries of the CIS.The top 25 is dominated by Russian banks which, as previously mentioned, are achieving rapid growth rates in this post-crisis period in which the banking sector is under better management and the economy is expanding soundly.
Smart moves in the developing world
South African company Aplitec saw a gap in the payments market and devised a cheaper alternative to the EMV standard. Stuart Theobald explains how this upstart company has stolen a march on the global card giants.Smart cards have heralded a technical revolution in payments systems across the globe. But the industry smart card standard Europay Mastercard Visa (EMV) is not without its challengers. One that has caught the attention of Visa particularly is a small South African IT company called Aplitec.