Scotiabank ranks as a top lender to Corporate Canada.Chris Wattie/Reuters
Bank of Nova Scotia recruited three senior executives in recent months to ramp up stock sales for Canadian and U.S. corporate clients.
Scotiabank posted lacklustre results last year in what’s known as equity capital markets, ranking at the back of the pack for stock underwriting among domestic and foreign investment with approximately 3-per-cent market share. In comparison, Scotiabank ranks as a top lender to Corporate Canada, with 14-per-cent market share, so the bank has strong ties to companies that weren’t translating into lucrative work on stock offerings. The shortcoming was not lost on senior executives.
“We believe in Canada, our home market, which is very important to us; we’ve not yet captured what we believe is our natural market share,” said Jake Lawrence, co-group head of global banking and markets, at a recent Scotiabank investor conference in Chile.
“We’re working hard to protect our home base and enhance our franchise in this very important market.”
The bankers who are asked to deliver on Mr. Lawrence’s goal started to arrive in October, 2018, when the investment dealer recruited Michelle Khalili as its global head of equity capital markets. She was previously at CIBC World Markets and Goldman Sachs, where she worked in New York and helped Canadian companies raise capital from U.S. and global investors.
The equity capital markets or ECM team at any bank provides a bridge between corporate clients, the investment bankers who cover these companies, the equity sales professionals who work with institutional and retail investors and rival dealers, who join forces to sell an underwriting in what’s known as a syndicate. These groups have different goals: Companies strive to get the best possible price when they sell an equity, while investors want to buy stocks at a discount. The ECM group tries to balance these conflicting agendas.
In recent weeks, Ms. Khalili landed two new leaders for the bank’s New York-based underwriting team. John Cronin was named head of U.S. equity capital markets, after working in a similar role at Wells Fargo, where he spent 17 years. In addition, the bank hired Tim Mann as head of U.S. equity syndication, a role that requires a diplomat’s touch as it means working with competing banks. Mr. Mann was at Barclays PLC for 15 years. The two executives will primarily focus on sales of stock issued by U.S. companies, but will also be available to help Canadian clients.
In Canada, Scotiabank hired Brendan Spinks as a managing director in its Canadian equity capital markets team. He joined the dealer from the investment banking arm of HSBC Holdings PLC, where he was co-leader of the equity capital markets team in the Americas for the past three years.
The ECM role at Scotiabank holds a unique distinction: The bank’s chief executive officer, Brian Porter, once held Ms. Khalili’s job of head of equity capital markets, and did it well. No other bank CEO traveled this path to the top.
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