< The 2016 All-Europe Research Team
Matt Spick & team
Deutsche Bank
First-place appearances: 2
Total appearances: 11
Team debut: 1999
Deutsche Bank slips back to No. 3 after rising to second place last year. Guided solely by Matt Spick since the September departure of Jason Napier for UBS, the seven-member group continues to impress clients as responsive to investor requests and knowledgeable. In particular, one backer hails its “excellent research on topics from changing capital requirements from the Basel Committee to asset quality reviews, stress tests and the impacts of IFRS 9,” the International Accounting Standards Board’s updated guidance on accounting for financial instruments. From offices in London, Milan and Paris, Spick and his colleagues monitor 44 stocks in the regional sector. Looking back, the team leader notes that, over the past three years, “European banks have traded in a consistent 1 to 1.2 times forward price-to-tangible-book-value range, reflecting their new postcrisis status as a heavily regulated, cost-of-capital industry.” Most institutions have recently moved to the bottom of that range, he adds, “leaving room for some modest rerating in early 2016, especially relative to the market, given that the sector has forcibly had its risk profile reduced.” Going forward, the researchers anticipate that British universal bank Barclays will gain ground, assigning its stock a buy rating and a price objective of 303p. The lender has been a persistent underperformer, they advise, owing to regulatory hawkishness in its home market and concerns about performance at its iBank international bank account business. Now, however, “we expect the upward trend in the harshness of U.K. regulation to end and for the iBank to be further restructured until it is adequately profitable or gone,” reports Spick, 44. Barclays was trading at 191.80p in mid-January.
