I've heard a few people say recently that CS is on the verge on losing its BB status. I understand the bank has had its troubles, but does this hold any validity?
Edit: I understand what a BB is and I’m not suggesting I agree with the sentiment that CS is not a BB, because I don’t. It’s more that I’m trying to understand the grounds people have for a claim like this.
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Yes, it is beyond being on the verge, and it is a huge deal. I am intern at a top BB (think GS / JPM / FTP- No longer MS since their total comp is lower than FTP base (140k an1)), and CS is in deep deep trouble. Based on its recent bonuses and CEO leaving, it is all but guaranteed to be stripped of its BB title. If you work there, I am so sorry for you. You will now have to remark that you work for a MM bank, or maybe call it an "in-betweener" and that depending on your group you handle BB size deals. Anyone that works there is immediately confined to only LMM PE Exits if they're lucky, because MF and MM pe firms don't believe in ANYONE that is not at a prestigious BB. Truist is stepping into their shoes since they pay the highest bonuses on the street. Hope this helps!
This is a freezing cold take
It's called a shitpost, chief
yeah dude I think OP is trolling...
Congrats on CS chief! Sorry you didn’t grasp the sarcasm.
Edit: He deleted his short essay :(
This is a cold take
Congrats on BofA.
You do realize a “bulge bracket” is just a full service bank right?
In that case piper is BB?
it’s the historic top 8 banks with balance sheets- agree you have to be full service but that does not make a BB
Actually it’s 9 banks and it originates from the prospectus of a deal where those were the names that were traditionally on top as bookrunners
This would extend to Nomura, RBC and a whole bunch of other banks if this was the case…
Why wouldn’t that be true? Quality of work is going to be better at the EBs, but they don’t have the balance sheet capabilities of Nomura / RBC
HSBC, BNP Paribas, MUFG, RBC, Nomura, Mizuho, Mitsui, Macquarie, Wells, SocGen, UniCredit... would all beg to differ
Aren’t you an intern in LDN? Get your broke ass out of here
Two of the banks you listed are Top 10 in fees this year
League Tables year to date, according to Bloomberg:
1. Goldman Sachs
2. JP Morgan
3. Morgan Stanley
4. Bank of America
5. Citi
6. CREDIT SUISSE
7. Barclays
8. BNP
9. Wells Fargo
10. UBS
League Tables year to date, according to Bloomberg:
1. Goldman Sachs
2. JP Morgan
3. Morgan Stanley
4. Bank of America
5. Citi
6. CREDIT SUISSE
7. Barclays
8. BNP
9. Wells Fargo
10. UBS
League tables aren’t the be all end all, but they’re simple enough for the virgin interns crawling around here
Deutsche not longer considered BB confirmed
I don't see CS falling off a cliff this year. But this is a weird year. I think when M&A and capital markets open back up then the effect of CS losing 75 of their strongest MDs and 75 of their best directors will be apparent. The guys who have left CS are a lot of their top bankers who took amazing roles at other banks... even joining to co-heads of groups. CS has done a good job backfilling as people have left but lets be honest... there is adverse selection for the types of MDs and directors who have been willing leave their platform to go to CS this past year. Its not the rock star senior bankers willing to make that leap... Additionally there is ramp up time for senior bankers on a new platform even in the best of times.
The other whammy here is that CS over the past 5-10 years has really stood out in the leveraged finance space and that is entering an entirely new macro environment with rates rising. Additionally CS would be idiotic not to reevaluate their risk practices in light of greensill and archegos and levfin is super dependent on what risk allows. Curious to see what CS looks like in 3 years or so and whether they will fall as fast as DB did.
As someone who works at CS, I’d also add that they’ve been pretty clear that they’re basically moving to an adivsory-only model with very little markets activity or balance sheet exposure to speak of.
I expect they’ll keep some basic infrastructure necessary to execute LevFin/DCM/ECM transactions, but the ability and willingness to provide full-service financing capabilities is going to be severely diminished, which will absolutely impact CS’ ability to win mandates on advisory work, even if indirectly.
Tl;dr the people on this website are way more optimistic about CS’ prospects than most CS employees
From the outside looking in this makes sense to me. Will obviously strain some of the sponsors relationships and those clients are already finicky.
So I actually disagree with this. We have been told that IBCM (which is powered by the Lev Fin franchise) is an area of growth and not a part of the restructuring. S&T and other functions are where the major changes will be. Like senior management has continually repeated, it doesn’t make much sense to give up the market-leading position in leveraged finance (which has been an incredibly high-margin business and driver of revenue over decades).
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