By contrast, Societe Generale analyst Dirk Hoffmann-Becking held up Deutsche Bank as a restructuring model, even as he upgraded UBS in a Nov. 1 report.
"The cost savings programme is actually larger than the one at UBS relative to the overall cost base and obviously a lot less disruptive," he writes.
Hoffmann-Becking sees large potential revenue gains in fixed-income trading for investment banks as UBS effectively shuts down, led by JPMorgan (13.2%) Citigroup (11.8%) and Bank of America (9%). At the same time, however, he undercuts that projection by proclaiming himself "deeply sceptical of top-line driven investment cases in investment banking," adding "we assume zero revenue growth in all three investment banks we cover." Those three are Deutsche Bank and UBS, both of which he recommends, and Credit Suisse, on which he has a "hold."
Bernstein Research also takes on the restructuring in global investment banking in a Nov. 15 report, combining the efforts of six analysts. While the report diagnoses the problems facing the industry, most of which boil down to tougher regulations, it has little to say about who will come out ahead.
"Choosing global winners and losers remains challenging because the capital markets banks do not face a level playing field. While Basel capital rules appear to be converging around the world, national regulations and potential new operating prohibitions differ," Bernstein's analysts write.
This is a cop-out. Just because the playing field is uneven doesn't mean Bernstein's analysts can't pick the winners. They list their recommendations: "Outperform" on Goldman, Morgan Stanley, JPMorgan, Citigroup,
and RBS, and "market perform" on Bank of America and Barclays, but they don't explain the rationale for these picks in the report.
Bernstein's analysts appear to differ from the others, however, in believing that the spoils left over after the defeated players leave the field will be worth having.
"As capacity is removed from the business, pricing should slowly improve," the Bernstein report states.
Still, this impossible-to-quantify Bernstein hunch is hardly something on which to trade. The best advice, as always, may be to stay away from investment banks altogether. Short-term traders will nonetheless try and guess who is going to be next to announce a major restructuring, since that has proven to lead to a jump in the share price for several companies.