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Investment Bank League Tables: Size Matters

15 Feb, 2012 12:36

Written by Henri-Luc Carlin

Professor Hammami repeatedly declares that the financial industry is a very competitive field, and investment banks are no exception. An ongoing debate continues on which bank is most prestigious or which one has better culture, but there exists one characteristic that actually can be quantified: deal volume.

A bank’s deal volume is the sum of the prices paid by the acquirer on all M&A deals the bank advised on. While league tables could be used to compare and gauge investment banks’ M&A activity and performance, they also serve as a good basis for bragging rights.

These are the international league tables for the calendar year ending December 31st 2011.

Keeping in mind that there was a slowdown in M&A activity during Q4 of 2011, we can see that the top tier Bulge Bracket firms dominated the scene in terms of dollar volume. It is important to consider that market share figures are not collectively exhaustive in these rankings as multiple banks may advise on any particular deal. Nonetheless, these figures allow us to gauge who the main players were over a period of time. We can also observe that only one of the Big 5 Canadian Banks made it to the top 20 in 2011: RBC Capital Markets. Coming in 23rd place on an international level was BMO Capital Markets. CIBC World Markets made it to 27th place, while TD Securities came in 33rd and Scotia Capital made 34th place. In terms of deal volume, the M&A market was up by 3.95% year-over-year relative to 2010.

While the 2012 figures do not necessarily reflect on this year’s deal flow, as the year has just begun, it remains encouraging for the Canadian Financial Markets to see two Canadian banks placing in the top 20 so far, TD Securities and Scotia Capital. This can mostly be explained by the $3.96B Pembina – Provident deal that both firms advised on, which gave them a solid lead early in the year.

Year-to-date, the dollar volume of transactions is up by 78.32% relative to deal flow in 2011’s fourth quarter. Hopefully we will witness a recovery of the EU and American economies in 2012, which could translate to a sustainable increase in global M&A activity across the board- positive news for all of us eager finance interns.