Our (highly subjective) opinion is given below. Let us know if you disagree.
Why? As an advisory house with no exposure to structured credit or toxic products, Rothschild hasn’t done too badly in the recent past. NM Rothschild, the group’s UK investment bank, actually had a fairly promising year last in 2008: it managed to turn a pre-tax profit of 28.5m, and earned a record 324.3m from advisory work.
2. RBC Capital Markets
Why? Like all other banks, RBC Capital markets hasn’t escaped the financial crisis unscathed, but it’s come through a lot better than most of its competitors. The bank’s fourth quarter results show full year net income in the capital markets division falling only 10% in 2008 to C$1,170 (684m). Moreover, RBC is building its European cash equities and wealth management divisions.
3. HSBC Global Banking and Markets
Why? Although HSBC’s shares declined sharply at the start of this week on expectations of a rights issue or shareholder dilution from government funding, the bank has come through the financial crisis relatively unscathed. It helps that HSBC has a strong presence in less affected markets in Asia.
The bank has recently committed to keep its global headquarters in London, although it cut 500 London investment banking jobs last September.
4. Standard Chartered, Wholesale Banking
Why? Although its share price has more than halved in the past year, like HSBC, Standard Chartered has benefited from a strong presence in emerging markets in Asia and Africa. The bank has been building up its wholesale banking business with hires from everywhere from Goldman Sachs to Lehman Brothers and ABN AMRO. Last October, it said it continued to see “strong and broad based income momentum” in its wholesale banking business.
Why? OK, Macquarie’s share price has fallen 64% over the past 12 months, first half profits were down 40%, and the bank is said to have made big cuts to some of its teams in London, but the Australian bank did at least make a profit for 2008. It was also a net hirer in the first six months of the year and has been building a European equities business.
A longer version of this article also appears on our Student Centre.