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Ten months after its unusual regional retreat in equity capital markets and M&A, HSBC has had a good year in debt capital markets, suggesting its new strategy can work
New look corporate finance division has merged M&A and sponsor coverage
Physical infrastructure, once seen as boring and ex-growth, has become one of the hottest areas for capital markets and M&A, and that is set to accelerate in 2026
Hit by an alleged ‘fraud’ at the bankrupt US car parts maker, Wall Street’s last pure play investment bank has its sights set on European leveraged finance as it expands its alliance with SMBC
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BNP Paribas has been a relative winner over the course of the financial crisis but despite a clever strategy that has helped the bank to win some high profile mandates outside of its domestic power base, it has still not greatly increased its market share in investment banking, writes David Rothnie.
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The drastic action announced this week by Citigroup to turn around its fortunes by cutting 52,000 jobs comes less than two months after its European investment banking division emerged with a new approach that it believes will see it through the downturn. Chief executive Vikram Pandit is taking the decisions that his predecessors ducked, says David Rothnie.
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Sovereign wealth funds may have provided crucial rescue financing to investment banks, but they are proving less attractive as a source of revenues. And with some reining in their firepower, banks may soon discover that they are not the saviours they were initially thought to be, says David Rothnie.
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The star culture at many investment banks will lead to arbitrary and indiscriminate job cuts among the ranks of associates as cutbacks are made. That might help banks to meet numerical redundancy targets in the short term but will leave banks scrambling to fill managing director positions in a few years’ time — once again destroying shareholder value, argues David Rothnie.
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Thousands of investment-banking job losses are likely following the integration of Bank of America and Merrill Lynch. As John Thain’s transition teams get to work, they will have to avoid the mistakes made by Merrill in the past — firing too many staff in the downturn, then hiring too many “mediocre” bankers during the following boom. Merrill’s global financial institutions group, shaped by Greg Fleming and Andrea Orcel, is the right template for Thain to use across the rest of the merged investment bank.
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Do you want to work for a firm that is free to pay you on the basis of the business you generate and not on the dictat of government bureaucrats? A firm that has not been hamstrung by a broken business model? A firm whose clients respect the independence of your advice? And a firm small enough not to worry about anxious regulators crawling over your business? Boutique investment banking is back, says David Rothnie, though like the rest of the industry, it too faces tough challenges.