Best overall credit house RBC Capital Markets Royal Bank of Canada's dominance in a number of categories in this year's European Credit Awards, including the blue-riband award for Best Overall Credit House, is much more than a reflection of the Canadian banking system's relative strength. Consistent investment in the bank's European business over years and a focus on the cash side of the business while other institutions experimented with untested and complex products have impressed clients whose appetites have veered strongly towards the traditional. "I don't think we've done anything markedly different from what we've done in the past," says John Greenslade, head of fixed income and currencies and global head of emerging markets at RBC Capital Markets. He stresses that the bank has a strong balance sheet, giving it real purchasing power as a counterparty in a tricky environment. "We're very much a price-taker from the CDS market as opposed to a price-maker. That has meant we've managed to keep very focused on the cash side of the business, providing liquidity to our clients when they've needed it." Phil Gee, head of credit trading, says the bank doesn't compete on CDS with the likes of Deutsche, Citi and JPMorgan. "Over the last year the market has gone very much back to basics which means trading cash rather than trading derivatives, to our benefit. Cash was always our bread and butter and the secondary market has been important to us so it should be no surprise that we have come back in favour." Gee believes this return to a more traditional environment is here to stay for a long time while people remain suspicious of the ill-advised innovation that led to the market's problems over the last two years. Bonds, he says, are a growing business. "Fixed income over the last six months has gone through the roof in terms of volumes and activity. We've seen a big tightening of spreads and a lot of participation from retail money - the man in the street taking money off deposit and into fixed income." RBC saw that move early, he says, partly as a result of the bank's commitment to electronic trading. "We don't talk to individuals because we're a wholesale market-maker but given all the brokers who came through with small orders, it's quite clear there's been a sea-change in the market. In December and January there was an enormous pick-up in what you'd call the retail demand for fixed income. That's part of what's driven the market." Greenslade emphasises that RBC's performance is not an overnight success but the result of sticking to the same approach to the market and clients over a number of years. "We're focused on delivering a level of service and adding value for our customers. We recognise the Canadian banking system is well-placed and we want to continue to take advantage of that. We believe the market is playing to our strengths right now and we will continue to focus our efforts in this arena." While the wind is blowing fair for RBC at the moment, they are not complacent. "We recognise that markets are cyclical and that they normalise," says Gee. "We want to do everything we can as a business to make sure we stay relevant with the account base throughout the major geographies." Top 5 results (by percentage) 1. RBC 2. JPMorgan 3. Deutsche Bank 4. BarCap 5. RBS...
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