Latin Finance - September/October 2010 - 18

investment bank fees

our flow. So we will have a market share Brain Surgery Some houses have failed to maintain share that is going to be bigger than JPMorgan Pure investment banks continue to and Merrill Lynch and Santander. It’s of the reviving fee pool, while others are bemoan the fact that their commercial going to happen before the end of the furiously hiring with a view to capture cousins can subsidize the business year,” says Cremoux. more of what is seen as a rapidly growing with cheap loans to corporates. They Elsewhere, Barclays hired Ana Cabral- nonetheless believe clients will continue to pie. From a revenue standpoint, the main Gardner as a São Paulo-based managing year-on-year improvers are Credit Suisse, pay for quality ideas. Itaú Unibanco, BAML, Deutsche Bank and director for investment banking. She “Clients will also differentiate the was previously head of LatAm ECM at Goldman. intellectual capital,” says Cremoux, who Goldman, which she left in late 2008, The latter claims to be redoubling its adds that UBS will use balance sheet and will cover the retail, consumer and efforts in the region, despite a slew of selectively. “We have a loan book in Latin healthcare sectors. Alceu Lima, head of highly damaging revelations about its America that is actually quite substantial. Brazil investment banking, describes US franchise. “[The negative US news] A lot of it is still unutilized because we are the hire as, “an important step in the has not changed any of our investing still hiring senior bankers in Brazil, but we continued expansion of our Brazilian plans in terms of personnel, capital, have the capacity to increase that.” investment banking platform.” resources or infrastructure,” says Carlotti. Both BAML and HSBC have recently “We continue to push forward hired senior bankers to run their aggressively in building out our loans efforts, but both say they EM Investment Bank Reveues by Region ($m) platform and we remain on track, will lean more on ideas and LatAm still lags and consistent with our plans relationships to get investment of a couple of years ago to have banking business. For example, 7,000 this be a full service platform,” HSBC is beefing up acquisition LatAm EEMEA Asia 6,000 he adds, referring to Brazil. “The finance capabilities to boost a focus has intensified rather than fledgling M&A effort. 5,000 abated,” he stresses. “When you’re getting brain Also in the top 10 for revenues surgery, you’ve got to have the 4,000 are Santander, Citi, BTG Pactual, best guy,” says Cruz, who also JPMorgan and Bradesco. “There’s expects Citi to use balance sheet 3,000 a real need to have a pan-Latin smartly. “We don’t have the 2,000 American player that can connect strategy of just lending a lot of the dots,” says Citi’s Cruz, people a lot of money and hoping 1,000 referring to his own plans for that the more interesting business strengthening his platform. will just come along,” he adds. 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 The LatAm bulge bracket is The presence of commercial menaced by a growing number banks like Bradesco and Source: Dealogic of smaller competitors looking to Santander on the investment muscle in, as well as large global banking league table is due more These relative newcomers are joined entities like HSBC and Morgan Stanley to payback for cheap loans given during by institutions like Royal Bank of Scotland, crisis than for execution, say investment that are fortifying a presence. Some SocGen and Standard Chartered, whose newcomers like Nomura and Mizuho banks at competing firms. They predict hiring suggests an interest in building. are starting with a niche, while others that now those relationships have been But for now, the Brazil majors appear like UBS and Barclays appear to want to repaid, clients will gravitate to rewarding unconcerned about the threat. establish more broad capabilities. strategic ideas and strong capital markets “The competition is not very different “Clients expect to see another execution. to what it was before,” says Guilherme competitor go back into the country in Paes head of Brazil investment banking at Art of the Cross Sell a meaningful way in order to have a bit BTG Pactual. “We see a lot of international Institutions with a corporate banking more variety in terms of distributors, players in Brazil, some with a good and have fresh opinions of the demand history or strong debt franchise are position in M&A, others in ECM. But to be hoping to leverage that into higher margin for their stock and how to do deals,” honest, I don’t see people with the same says Gerard Cremoux, co-head of LatAm business. Banks like HSBC, which has platform that we have in Brazil,” he adds. investment banking at UBS. had a strong DCM run, is hoping to move “Local competitors are tough, no According to Cremoux, since UBS existing corporate relationships to more doubt about that, we’re seeing big bought Brazilian brokerage Link, it has strategic dialogue. investment from a lot of the other guys, moved to being fourth by market share of “You need to actually understand the but nobody else has the presence or cash equity trading market, from seventh client, have a relationship with the CEO significance in each of the countries as previously. “I am very confident that we so he trusts you, so you know what they get to number three once we start to move we do,” says Cruz. really want to do. Then you can figure out

Muscling In

18 LatinFinance

September/October 2010

Revenue

Latin Finance - September/October 2010

Table of Contents for the Digital Edition of Latin Finance - September/October 2010