THIS
POST WAS ORIGINALLY PUBLISHED APRIL 20, 2007
FOREIGN INVESTBANKS IN RUSSIA – FEELING GOOD
Today’s KOMMERSANT DAILY carried a piece that discusses revenues of investment banks that are operating in Russia. It is interesting to note that according to offerings.ru there are 35 investment banks that are now involved in IPOs and M&A activities. Kommersant cites the research paper of Dealogic , according to which top 5 Western investment banks got $ 200 million in Q1.
Here are some details on the revenues for the Q1 2007:
- with the advent of major world banks to Russia the competition is increasing and that greatly affects the volumes of revenues – many companies are faced with necessity to lower their fees;
- IPO transactions are the most profitable for investment banks; however, while remunerations of the banks elsewhere are 6%, in Russia the median number is 2.5% (in Sberbank’s case it was 1%). And this is a decline from 4% - 7% fees in previous years;
- the least profitable are the debt securities transactions with commissions of 0.5% - 0.7% (which is a big drop from 2005 when placement of Eurobonds could get 2% fee);
- Deutsche Bank was the leader with $41.02 million revenues for support of 20 transactions;
- JPMorgan - $38.94 million – 11 transactions;
- Credit Suisse - $ 38.7 million – 15 transactions;
- Morgan Stanley - $ 37.02 million – 13 transactions;
- Citigroup - $ 35.77 million – 20 transactions.
Foreign banks that operate in Russia are trying to diversify their services, some of them are pursing more active involvement in M&A deals. As an example, today it was reported that Merrill Lynch Securities started its trading operations on MICEX on April 19.
- with the advent of major world banks to Russia the competition is increasing and that greatly affects the volumes of revenues – many companies are faced with necessity to lower their fees;
- IPO transactions are the most profitable for investment banks; however, while remunerations of the banks elsewhere are 6%, in Russia the median number is 2.5% (in Sberbank’s case it was 1%). And this is a decline from 4% - 7% fees in previous years;
- the least profitable are the debt securities transactions with commissions of 0.5% - 0.7% (which is a big drop from 2005 when placement of Eurobonds could get 2% fee);
- Deutsche Bank was the leader with $41.02 million revenues for support of 20 transactions;
- JPMorgan - $38.94 million – 11 transactions;
- Credit Suisse - $ 38.7 million – 15 transactions;
- Morgan Stanley - $ 37.02 million – 13 transactions;
- Citigroup - $ 35.77 million – 20 transactions.
Foreign banks that operate in Russia are trying to diversify their services, some of them are pursing more active involvement in M&A deals. As an example, today it was reported that Merrill Lynch Securities started its trading operations on MICEX on April 19.
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