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Santander, JP Morgan and Barclays vie for the top spot in investment banking in Spain

The institutions lost over 20% in revenues compared to the previous year but doubled their figures through June

Hipotecas España
A branch of Banco Santander in Madrid.Samuel Sánchez
Álvaro Bayón

With one quarter to go before the end of a disastrous year for investment banking, three entities are vying for the top spot in Spain. Santander is in first place for the second year in a row, followed by JP Morgan and Barclays.

Once again, investment banking revenues worsened in the third quarter. According to Dealogic’s figures, the fee-based income of the 20 largest entities operating in Spain reached some €450 million ($475,755,750) so far this year, 23% less than in the same period last year, when they pocketed some €580 ($613,196,300) million. Indeed, from last year onward, the combination of rising inflation, interest rate hikes and the threat of recession began to affect mergers and acquisitions (M&A), equity and debt markets, causing a raft of deals to be cancelled and investment banking revenues to plummet.

One year later, however, it seems that something is beginning to change. While most banks’ figures have worsened compared to the same period in the previous year, they have managed to substantially improve the numbers they recorded up to June. For example, the leader, Santander, has gone from earning just €37 million ($39,125,465) to taking in almost double that, €62 million ($65,548,570). JP Morgan also practically doubled its revenues, from €27 million ($28,551,015) to €42 million $(44,412,690), and it managed to wrest second place from Barclays, which has seen a more moderate increase in revenues from some €10 million ($10,571,770) to nearly €40 million ($42,297,800).

Santander’s activity in debt issues in recent months stands out. It has worked on loans for Cellnex, Indra, Digital, Eurodivisas and Howden and for Ferrovial, Abanca and Bankinter on bonds.

“In mergers and acquisitions, we can highlight Energy (especially renewables) and TMT. We’re detecting a high level of investor interest, especially in attractive sectors, but it remains to be seen whether institutional and bank financing will follow. In terms of IPO (initial public offering) activity, we could see a record 2024, as we are working with companies with very attractive equity stories. At the same time, several IPOs are taking place, which we believe will continue in sectors that are currently undervalued on the stock market,” says Ignacio Domínguez-Adame, the head of Santander Corporate & Investment Banking in Europe.

JP Morgan has risen to second place and has been a leading investment bank for eight straight years. In fact, some sources indicate that, if it were not for Santander’s intragroup operations, the bank would be in first place. Transactions the bank has advised on include the Applus+ takeover bid, the sale of Iberdrola’s assets in Mexico and 50% of its network business in Brazil. It has also worked with Bruc on the sale of 49% of a photovoltaic portfolio, with Cinven on the sale of Planasa to EW Group and with Urbaser on the sale of its Nordic subsidiary. Barclays has advised on the sale of 49% of Iberdrola’s Romeo Project to Norges, the sale of Sabadell’s payments business to Nexi and the sale of Inmucor by Werfen, among others.

“Although there are still no major market certainties, the anticipated stabilization of interest rates points to a greater ability for the market to set asset prices, in both the public and private markets. Overall, 2023 has been a year virtually devoid of equity transactions, which was already occurring in 2022. [There’s been] increased activity in the debt markets, especially in investment grade debt. Among all market players, there’s greater conviction about the medium-term stability of a high interest rate environment, which leads to action on the part of issuers and sellers and greater receptivity on the part of investors and buyers. This has led to increased activity in both the United States and Europe, with some significant transactions being successfully completed that are likely to set the pace of the market in the coming months, such as the ARM (Softbank) IPO in the United States. Looking ahead, it is possible to expect a better market tone in the last quarter of 2023, which will continue in 2024,″ says Ignacio de la Colina, the president of JP Morgan in Spain and Portugal.

After the leading three investment banks, the differences among the rest of the institutions are rather small. The difference between the third, Barclays, and the fourth, Deutsche Bank, is about €12 million ($12,686,124). Between the German institution and Goldman Sachs, seventh on the list, there is a difference of only €3 million ($3,171,531), €7 million ($7,400,610) with eighth-place BNP Paribas and about €8 million ($8,457,840)with the ninth and tenth, UBS and Crédit Agricole, respectively.

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