Fees and Volume Diverge in DCM

Often the big debt trade in LatAm is not the most lucrative for underwriters, and this year’s Dealogic DCM league tables show significant divergence between volume and revenue. Top of the volume charts is Deutsche Bank, with $3.99bn in credit from 9 deals in the year to July 23. But the German house only comes fourth in the fees rankings, with $7.49m, or 5.63% market share. Credit Suisse is the only other top 5 DCM volume player that also appears in the top 5 for deal revenue. The Swiss shop comes second for bond issuance, with $2.79bn in 13 trades, and first for fees, with $11.36m year-to-date, or 8.53% of the market. Half Deutsche’s flow so far in 2008 can be attributed to a $4bn Venezuela sovereign deal sold locally that it shared with Barclays in April. Barclays is number 5 for volume but fails to make top 5 for fees. Nor is the UK shop in the top 10 for LatAm investment banking revenues overall. Meanwhile, BBVA and HSBC also make the top five for DCM volume but fail to achieve a similar standing when it comes to fees. RBS, Itau and Citi are the other three top five revenue shops. They generate more fees than volume numbers would suggest, according to Dealogic data.