LatinFinance - September/October 2013 - 28

SURVEY
Investment
bankIng
fees

Banks are earning about as much in fees as they were a year ago, with a burst
of ECM activity compensating for a sharply slower M&A market. Much now
depends on market stability in the months ahead. By Ben Miller

Under pressure

V

olatile US treasury markets and flagging regional economic growth have thrown
up fresh challenges in 2013 for latin america’s corporate borrowers.
But such pressure has so far this year failed to make a dent in the earnings of the investment banks that service them: fees are roughly flat on last year, thanks largely to the overall
resilience of the main business lines — even though the sources of that revenue have changed.
equity capital market activity picked up pace this year, helping compensate for a slump in
mergers and acquisitions. and despite uncertainty over the direction of interest rates, debt
capital market revenue is down only slightly on last year, tracking overall volume.
the fee pool for latam investment banking — combining revenue from Dcm, ecm, m&a
and loans — had reached $1.28 billion this year through September 6, according to Dealogic
data. this was up a hair from the $1.24 billion earned during the corresponding period in
2012.
credit Suisse led the table with $121 million, or 9.5% of the market. citi and JPmorgan came
second and third, respectively.
“the competitive environment continues to rise,” says lisandro miguens, co-head of
corporate and investment banking for latin america at JPmorgan. “Some international banks
came back strong after the 2008 crisis, local banks continue to strengthen their investment
banking practices and some local banks are expanding their investment banking franchises
regionally. all of this is putting some pressure on fees.”
Bankers’ earnings remain squarely in line with trends in volume in the main product
areas, as well as with the rest of the world. the $402 million latam earned on $103.06 billion
in Dcm volume, according to Dealogic, works out to 0.4%. this compares to 0.4% on $1.66
trillion volume in north america, 0.31% on $867.43 billion volume in asia and 0.29% on $1.57
trillion for emea.
in ecm the story is more lucrative overall, and latam is in line with the rest of the world
apart from north america. latam’s $450 million fee pool from $26.48 billion in ecm volume
represents 1.7%. this compares to 3.09% on $195.51 billion volume in north america, 1.68%
on $154.33 billion volume in asia and 1.47% on $125.02 billion emea.
ECM: Gracias, Mexico
the market has finally seen the pick-up in equity activity it so yearned, although that could
hardly have been worse than the trend of recent years. Volumes remain a pale shadow of the
market’s potential.

28 l atinfina nce.com - September/October 2013

mexico has been the busiest area in
the region’s equity markets. By July it had
already set a full-year record for new issuance volume: optimism over the new
government and a bold economic reform
agenda that could set the ground for stronger economic growth helped translate into
$9.68 billion in ecm deals. this has contributed to a major part of the $450 million
in total revenue for the region for equities
transactions this year through September
6, up from $243 million in the corresponding period in 2012.
“in an economy like mexico, with a lot
of change, there will be continued equity
issuance activity,” says mark Rosen, head of
latin america investment banking at Bank
of america merrill lynch. “We don’t see
that slowing in the next 12 months.”
Deals from the consumer sector and energy sectors have been successful this year,
and real estate has done an exceptional job
of capturing international interest. Several
new fibras, mexican real estate trusts, have
made their debuts or held follow-ons this
year, to the extent that some investors have
fretted about a bubble.
“the fibra theme in mexico has remained strong, pushing volumes to record
highs,” miguens says.
“We are still positive on mexico. even
though growth in the second quarter was a
bit disappointing we are confident that all
engines of growth and the positive market
sentiment remain intact. the appetite for
mexico stories from the investor community should continue.”
credit Suisse leads the table for equity
revenue, with $57 million or 12.6% market
share. Brazilians itaú and BtG Pactual
follow close behind thanks to a number of


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LatinFinance - September/October 2013

Table of Contents for the Digital Edition of LatinFinance - September/October 2013

Latin Finance - September/October 2013
Contents
Front notes
People news
Debt news
Equity news
M&A news
After the storm
Advantage Mexico
Treading water
New structures
Mexico
Regaining the Initiative
Deficit Ahead
Building up
Switching Course
Brazil
Work in progress
Extreme makeover
Mind the gap
Brazilian life insurance
Andean
Breaking the fall
Reaching out
Market movers
Paraguay
Smoothing the cycles
Thinking big
Parting Shot
LatinFinance - September/October 2013 - Latin Finance - September/October 2013
LatinFinance - September/October 2013 - Cover2
LatinFinance - September/October 2013 - Contents
LatinFinance - September/October 2013 - 2
LatinFinance - September/October 2013 - 3
LatinFinance - September/October 2013 - Front notes
LatinFinance - September/October 2013 - 5
LatinFinance - September/October 2013 - People news
LatinFinance - September/October 2013 - 7
LatinFinance - September/October 2013 - Debt news
LatinFinance - September/October 2013 - 9
LatinFinance - September/October 2013 - Equity news
LatinFinance - September/October 2013 - 11
LatinFinance - September/October 2013 - M&A news
LatinFinance - September/October 2013 - 13
LatinFinance - September/October 2013 - 14
LatinFinance - September/October 2013 - 15
LatinFinance - September/October 2013 - 16
LatinFinance - September/October 2013 - 17
LatinFinance - September/October 2013 - 18
LatinFinance - September/October 2013 - 19
LatinFinance - September/October 2013 - 20
LatinFinance - September/October 2013 - 21
LatinFinance - September/October 2013 - 22
LatinFinance - September/October 2013 - 23
LatinFinance - September/October 2013 - After the storm
LatinFinance - September/October 2013 - 25
LatinFinance - September/October 2013 - Advantage Mexico
LatinFinance - September/October 2013 - 27
LatinFinance - September/October 2013 - Treading water
LatinFinance - September/October 2013 - 29
LatinFinance - September/October 2013 - 30
LatinFinance - September/October 2013 - New structures
LatinFinance - September/October 2013 - 32
LatinFinance - September/October 2013 - 33
LatinFinance - September/October 2013 - 34
LatinFinance - September/October 2013 - 35
LatinFinance - September/October 2013 - 36
LatinFinance - September/October 2013 - 37
LatinFinance - September/October 2013 - 38
LatinFinance - September/October 2013 - 39
LatinFinance - September/October 2013 - 40
LatinFinance - September/October 2013 - Mexico
LatinFinance - September/October 2013 - Regaining the Initiative
LatinFinance - September/October 2013 - 43
LatinFinance - September/October 2013 - Deficit Ahead
LatinFinance - September/October 2013 - 45
LatinFinance - September/October 2013 - Building up
LatinFinance - September/October 2013 - 47
LatinFinance - September/October 2013 - 48
LatinFinance - September/October 2013 - 49
LatinFinance - September/October 2013 - 50
LatinFinance - September/October 2013 - 51
LatinFinance - September/October 2013 - Switching Course
LatinFinance - September/October 2013 - 53
LatinFinance - September/October 2013 - 54
LatinFinance - September/October 2013 - 55
LatinFinance - September/October 2013 - 56
LatinFinance - September/October 2013 - Brazil
LatinFinance - September/October 2013 - Work in progress
LatinFinance - September/October 2013 - 59
LatinFinance - September/October 2013 - 60
LatinFinance - September/October 2013 - 61
LatinFinance - September/October 2013 - Extreme makeover
LatinFinance - September/October 2013 - 63
LatinFinance - September/October 2013 - 64
LatinFinance - September/October 2013 - 65
LatinFinance - September/October 2013 - 66
LatinFinance - September/October 2013 - Mind the gap
LatinFinance - September/October 2013 - 68
LatinFinance - September/October 2013 - 69
LatinFinance - September/October 2013 - Brazilian life insurance
LatinFinance - September/October 2013 - 71
LatinFinance - September/October 2013 - 72
LatinFinance - September/October 2013 - Andean
LatinFinance - September/October 2013 - Breaking the fall
LatinFinance - September/October 2013 - 75
LatinFinance - September/October 2013 - 76
LatinFinance - September/October 2013 - Reaching out
LatinFinance - September/October 2013 - 78
LatinFinance - September/October 2013 - 79
LatinFinance - September/October 2013 - 80
LatinFinance - September/October 2013 - 81
LatinFinance - September/October 2013 - Market movers
LatinFinance - September/October 2013 - Paraguay
LatinFinance - September/October 2013 - Smoothing the cycles
LatinFinance - September/October 2013 - 85
LatinFinance - September/October 2013 - Thinking big
LatinFinance - September/October 2013 - 87
LatinFinance - September/October 2013 - Parting Shot
LatinFinance - September/October 2013 - Cover3
LatinFinance - September/October 2013 - Cover4
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