December 24, 2009
At the end of an extremely challenging year for investment banks globally, there are two big surprises in LatAm. One is that the fee pool from core investment banking activities –M&A, DCM and ECM – has actually expanded slightly. The other is that Bank of America Merrill Lynch – which most of the street had written off as a regional player after its troubled merger – has actually doubled its fees and is among the biggest year-on-year improvers in the regional revenue league tables. The merged US-based entity amassed $75.4m in revenue in the year to December 18, putting it sixth overall in LatAm with 5.8% of total wallet share, Dealogic data show. This compares to $37.6m (3.0%) in 2008, when the combined firms’ business ranked ninth. BofA Merrill is still well behind JPMorgan, which came first for fees with $165.6m (12.7%), and it lags the top 5, all of which amassed more than $100m in the year. But its ranking far outstrips the negative expectations of most competitors, who took a wave of senior staff departures and continued trouble in the US as reasons to report the bank’s demise, at least in LatAm. Boosted by a strong high yield run in the second half, BofA Merrill bagged $29.8m in revenue (7.9% share) from DCM, putting it third in the overall LatAm debt ranking. It failed to make the top 10 last year. In M&A, BofA Merrill generated $23.4m fees (5.8%), making it eighth, up from 10th in 2008 when it got $18.4m (3.0%). By volume, BofA Merrill ranks tenth for M&A, sixth for DCM and fifth in ECM, much better than 2008 for the latter 2 categories. Dealogic notes a total LatAm fee pool of just above $1.3bn for the year, up from $1.2bn in 2008. In the top 5 this year for core investment banking revenue are JPMorgan, Credit Suisse, Citi, Bradesco and Santander.