Cover Story: World’s Best Banks 2009
JPMorgan Chase
A year ago Goldman Sachs looked like one of the strongest banks on Wall Street following a series of successful calls on the subprime crisis; it was a serious contender for best bank in the United States and was only narrowly beaten by JPMorgan Chase. Now Goldman Sachs and Morgan Stanley have given up their investment bank status (in September 2008, to get access to federal funds) and are rapidly trying to develop broader business models that look remarkably like that of JPMorgan Chase.
JPMorgan Chase has looked like a winner throughout the crisis. To be sure, it has received $25 billion from the Troubled Asset Relief Program. But it also reported a fourth-quarter profit of $702 million. Moreover, JPMorgan Chase has received what looks like official recognition of its survivor status: In castigating some banks for their foolish policies, President Barack Obama specifically cited JPMorgan Chase and its chief executive, Jamie Dimon, as examples of good management during the crisis. James Dimon, chairman and CEO
If any bank can be said to have benefited from the global financial crisis, it is JPMorgan Chase. A major international bank with assets of over $2 trillion, it operates in 60 countries and serves many of the world’s major corporations, as well as tens of thousands of smaller and middle-market companies. Its investment bank, J.P. Morgan, was number one in worldwide debt and equity underwriting in the first half of 2009.
It was ranked number three worldwide in advising on mergers and acquisitions. JPMorgan Chase’s profit of $2.7 billion in the second quarter was the first clear indication that the banking industry turned the corner. The well-capitalized bank has smoothly assimilated its acquisitions last year of Bear Stearns and Washington Mutual. One of the top commercial banks in market share, it offers a full range of services, including lending, treasury services and investment management. It is a leader in asset-based lending and equipment finance. Between its commercial bankers and its investment bank, JPMorgan Chase is capable of meeting the wide-ranging needs of its corporate customers, and it tailors its offerings to meet their specific requirements. James Dimon, chairman and CEO
Best Consumer Bank
HSBC
While its acquisition of US consumer lender Household International in 2003 was clearly a mistake, UK-based HSBC remains the world’s leading consumer bank, with an extensive presence in local markets, especially in Asia, where its roots are. The bank earned $5 billion in the first half of 2009, despite a sharp rise in non-performing loans as a result of the global recession. HSBC is conservatively managed, and it was not forced to take any bailout funds from the British government. The bank takes something of a cookie-cutter approach to its global operations, which ensures a standard level of service and access to sophisticated electronic platforms but detracts from its ability to specialize. It makes up for this in many cases, however, with its deep roots and knowledge of local markets. It serves 41 million people worldwide with a wide range of savings, investment and insurance products. Stephen Green, group chairman
Best Private Bank
Credit Suisse
Credit Suisse reported a profit of $1.5 billion in the second quarter of 2009, an increase of 29% from the same period a year earlier, as it gained market share in many areas. Its private bank benefited from the problems at rival UBS, which has been involved in a long-running dispute with the US government over offshore tax avoidance.
Best Consumer Bank
HSBC
While its acquisition of US consumer lender Household International in 2003 was clearly a mistake, UK-based HSBC remains the world’s leading consumer bank, with an extensive presence in local markets, especially in Asia, where its roots are. The bank earned $5 billion in the first half of 2009, despite a sharp rise in non-performing loans as a result of the global recession. HSBC is conservatively managed, and it was not forced to take any bailout funds from the British government. The bank takes something of a cookie-cutter approach to its global operations, which ensures a standard level of service and access to sophisticated electronic platforms but detracts from its ability to specialize. It makes up for this in many cases, however, with its deep roots and knowledge of local markets. It serves 41 million people worldwide with a wide range of savings, investment and insurance products. Stephen Green, group chairman
Best Private Bank
Credit Suisse
Credit Suisse reported a profit of $1.5 billion in the second quarter of 2009, an increase of 29% from the same period a year earlier, as it gained market share in many areas. Its private bank benefited from the problems at rival UBS, which has been involved in a long-running dispute with the US government over offshore tax avoidance.
Credit Suisse also has benefited from growth at its investment banking business and its limited exposure to toxic assets related to the subprime mortgage market. The bank turned to Middle East investors to rebuild its capital instead of accepting money from the government. Credit Suisse boasts a high gross margin in wealth management and a solid net inflow of funds. Its retail business, however, has felt the effects of a weak economy, and the bank has been forced to sharply increase provisions for credit losses.
Credit Suisse is prepared to make acquisitions to expand its private-banking business. There could be opportunities for it to acquire smaller Swiss banks unable to compete in the stricter compliance environment. Credit Suisse is eager to serve more high-net-worth clients in Asia, which is expected to lead future growth. Brady Dougan, CEO
Best Emerging Markets Bank
Standard Chartered
UK-based Standard Chartered earns 90% of its income and profits in Asia, Africa and the Middle East. It has 1,750 branches in 70 countries. The bank’s income rose 14% in the first half of 2009 to a record $8 billion, while its earnings rose 10% to a record $2.8 billion. Standard Chartered raised $1.6 billion through a share placement in August and is ready to take advantage of opportunities arising from the financial crisis. In July it completed the acquisition of the remaining 75% of the shares it did not already own in pan-African mergers and acquisitions advisory firm First Africa. In December 2008 Standard Chartered raised its stake to 74.9% in the India-based securities firm formerly known as UTI Securities. Standard Chartered plans to take full control of the firm by next year. Peter Sands, group CEO
Best Asset Management Bank
State Street Global Advisors
State Street Global Advisors (SSgA), the investment management arm of Boston-based State Street, is the world’s largest manager of institutional assets and one of the largest providers of exchange-traded funds (ETFs) in the United States and globally. SSgA manages more than $290 billion for 66 central banks and government clients. As of June 30, 2009, the firm had $1.6 trillion in assets under management. US assets under management for Standard & Poor’s depositary receipt (SPDR) ETFs totaled more than $143 billion. SSgA’s parent, State Street, announced a loss of $3.3 billion in the second quarter of 2009 as it consolidated its asset-backed commercial paper conduits onto its balance sheet. State Street passed the Federal Reserve’s stress test in May and conducted a successful equity and debt offering. It also repaid US government investments under the Troubled Asset Relief Program. Scott Powers, president and CEO
Best Custody Bank
The Bank of New York Mellon
The Bank of New York Mellon is the world’s biggest custody bank, with more than $20 trillion in assets under custody and administration. The bank reported a 43% decline in earnings to $176 million for the second quarter from the same period a year ago, after repaying the $3 billion it received last year as part of the US government’s Troubled Asset Relief Program. The bank’s overall revenue has stabilized, and it continues to gain market share and remain profitable. It is still feeling the effects of the housing crisis, however, with investment losses on residential mortgage-backed securities. The Bank of New York Mellon operates in 34 countries and 100 markets. In June it celebrated its 225th anniversary.
Robert Kelly, chairman and CEO
Best Investment Bank
J.P. Morgan
J.P. Morgan’s government-assisted acquisition of Bear Stearns in March 2008 provided it with a raft of new talent that has helped it to rise to the top in investment banking. J.P. Morgan ranked first for global debt underwriting for the first half of 2009, with $318 billion of issues. The bank showed continued strength in investment-grade and agency underwriting, according to Thomson Reuters. The bank also led first-half equity and equity-related rankings, with $53.5 billion in proceeds and a strong increase in market share. J.P. Morgan ranked third in global mergers and acquisitions advisory work in the first half, behind Goldman Sachs and Morgan Stanley. Steven Black and William Winters, co-CEOs of investment banking
Best Cash Management Bank
Citi
Citi’s Global Transaction Services unit provides treasury and trade services, as well as securities and fund services. The bank’s Treasury Vision and Online Investment platform continues to set the standard when it comes to integrating online cash management, investment and web-based treasury management.reflecting the Smith Barney deal. Francesco Vanni d’Archirafi, head of global transaction services
and on and on it goes ...
Credit Suisse is prepared to make acquisitions to expand its private-banking business. There could be opportunities for it to acquire smaller Swiss banks unable to compete in the stricter compliance environment. Credit Suisse is eager to serve more high-net-worth clients in Asia, which is expected to lead future growth. Brady Dougan, CEO
Best Emerging Markets Bank
Standard Chartered
UK-based Standard Chartered earns 90% of its income and profits in Asia, Africa and the Middle East. It has 1,750 branches in 70 countries. The bank’s income rose 14% in the first half of 2009 to a record $8 billion, while its earnings rose 10% to a record $2.8 billion. Standard Chartered raised $1.6 billion through a share placement in August and is ready to take advantage of opportunities arising from the financial crisis. In July it completed the acquisition of the remaining 75% of the shares it did not already own in pan-African mergers and acquisitions advisory firm First Africa. In December 2008 Standard Chartered raised its stake to 74.9% in the India-based securities firm formerly known as UTI Securities. Standard Chartered plans to take full control of the firm by next year. Peter Sands, group CEO
Best Asset Management Bank
State Street Global Advisors
State Street Global Advisors (SSgA), the investment management arm of Boston-based State Street, is the world’s largest manager of institutional assets and one of the largest providers of exchange-traded funds (ETFs) in the United States and globally. SSgA manages more than $290 billion for 66 central banks and government clients. As of June 30, 2009, the firm had $1.6 trillion in assets under management. US assets under management for Standard & Poor’s depositary receipt (SPDR) ETFs totaled more than $143 billion. SSgA’s parent, State Street, announced a loss of $3.3 billion in the second quarter of 2009 as it consolidated its asset-backed commercial paper conduits onto its balance sheet. State Street passed the Federal Reserve’s stress test in May and conducted a successful equity and debt offering. It also repaid US government investments under the Troubled Asset Relief Program. Scott Powers, president and CEO
Best Custody Bank
The Bank of New York Mellon
The Bank of New York Mellon is the world’s biggest custody bank, with more than $20 trillion in assets under custody and administration. The bank reported a 43% decline in earnings to $176 million for the second quarter from the same period a year ago, after repaying the $3 billion it received last year as part of the US government’s Troubled Asset Relief Program. The bank’s overall revenue has stabilized, and it continues to gain market share and remain profitable. It is still feeling the effects of the housing crisis, however, with investment losses on residential mortgage-backed securities. The Bank of New York Mellon operates in 34 countries and 100 markets. In June it celebrated its 225th anniversary.
Robert Kelly, chairman and CEO
Best Investment Bank
J.P. Morgan
J.P. Morgan’s government-assisted acquisition of Bear Stearns in March 2008 provided it with a raft of new talent that has helped it to rise to the top in investment banking. J.P. Morgan ranked first for global debt underwriting for the first half of 2009, with $318 billion of issues. The bank showed continued strength in investment-grade and agency underwriting, according to Thomson Reuters. The bank also led first-half equity and equity-related rankings, with $53.5 billion in proceeds and a strong increase in market share. J.P. Morgan ranked third in global mergers and acquisitions advisory work in the first half, behind Goldman Sachs and Morgan Stanley. Steven Black and William Winters, co-CEOs of investment banking
Best Cash Management Bank
Citi
Citi’s Global Transaction Services unit provides treasury and trade services, as well as securities and fund services. The bank’s Treasury Vision and Online Investment platform continues to set the standard when it comes to integrating online cash management, investment and web-based treasury management.reflecting the Smith Barney deal. Francesco Vanni d’Archirafi, head of global transaction services
and on and on it goes ...
