UBS and Credit Suisse Just About Manage to Stay in Focus in Asia

The major Swiss banks show some strength at the end of the year in Asia Pacific M&A and equities but are clear no-shows in bonds.

With the last of 2022’s regional league tables starting to trickle in, it is looking like Credit Suisse put in a strong M&A showing towards the end of the year, with UBS doing much the same in equity issues.

Year-on-year data from Refinitiv related to the fourth quarter of 2022 show Switzerland’s second-largest bank rising four places to 7^th in announced Asia Pacific M&A excluding Japan.

That was achieved on the back of 36 deals corresponding to an 8.2 percent market share and a 37 percent year-on-year increase in deal value.

Strength in Equity

The country’s largest institution, UBS, overtook five other investment banks to make 5^th in regional equity and equity-linked issues when Japan is excluded. That meant 53 issues and a market share of 3.7 percent.

On the face of it, although it appeared to be a solid performance, it still represented a 44 percent decline in issuance value from the year-earlier quarter.

An interesting thing to note here is that Moelis & Co, the institution founded and run by former UBS investment banking head Ken Moelis, jumped to 10^th in the M&A category, up from 36^th a year earlier.

Nowhere in Bonds

Both Swiss banks did not make the top ten in bond issuance, where Citic continued to lead a list dominated by China’s major banks. The same held true for investment banking fees.

That could make the investment bank businesses of the Swiss banks look like they are underperforming next year, particularly if equities continue to correct while bond valuations become increasingly attractive, as certain strategists have suggested.

Although that doesn’t necessarily correlate with more direct fixed-income issuance, some experts are saying that many variables are playing in favor of bonds. Any sign that central banks are close to ending the current tightening cycle, along with easier inflation, is likely to ensure continued attention to opportunities in global fixed-income, likely to the detriment of other asset classes, including equities.

Overall Developments

Refinitiv also released full-year data, which indicated that regional investment banking fees excluding Japan were at $28.2 billion in 2022, down 17 percent from a year earlier and at their lowest level since 2019.

As part of that, the Asia Pacific market accounted for just over a quarter of all fees globally, a performance that significantly surpassed that of the European market.

Equity capital market fees were at a three-year low, falling 36 percent, debt capital market fees were down 7 percent, and M&A advisory fees declined 13 percent.