The US-based institution sees UBS's rescue of Credit Suisse recalibrating the Swiss investment banking market, with Citi to fight intensely for cross-border deals, finews.com learns.

This year has not been great for takeovers, IPOs, and capital increase transactions. Still, the Swiss subsidiary of US-based Citigroup believes things are set to improve next year, with both underlying economic conditions and better overall market visibility lending a helping hand.

Breaking the Sound Barrier

«The markets have processed the fundamental changes in macro-economic conditions», believes Julian Herriger, the head of Citi's Swiss investment banking business when talking to journalists. «There is an established conviction that interest rates have reached their highest point. That helps improve the visibility that is needed for more activity.»

«As a rule, it is very hard to keep a 12 percent market share in investment banking over a prolonged duration. UBS and Credit Suisse's combined share is significantly above that. That will in all probability lead to diversification», the Citi executive continued.

Competitors in the Wings

There will be a long phase of recalibration that will lead to opportunities for competitors. Depending on the type of business, these will be either domestic or international. Citi for its part believes its main area of expertise lies in international cross-border deals.

At the media roundtable in Zurich on Thursday, figures showed a 23 percent decline in investment banking activity globally this year. That being said, the conditions are now ripe for a recovery in 2024.

Focus on Convertibles

According to Citi managers, companies are increasingly apt to undergo strategic transformations in the current environment, which will lead to new structures, with certain areas likely to be disposed of or sold. Many of them are going to review their outstanding debt, with refinancing needs and costs playing an important role in that. As part of that, Citi intends to put a greater focus on its corporate banking activities on convertible bond issuance.

But investments and takeovers, such as in the US, Citi's home base, will also become an increasingly attractive way for companies to grow.