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The 2014 All-Europe Research Team: Banks, No. 1: Michael Helsby, Alastair Ryan & team
In their first year leading Bank of America Merrill Lynchs squad, Michael Helsby and Alastair Ryan captain their seven-person crew straight to No. 1, delivering the firms first top finish since 2009. BofA Merrill finished third last year under Derek De Vries, who left in March. Helsby, 41, is a newcomer. Ryan, 42, joined the firm from UBS, whose runner-up teams he co-led in 2011 through 2013. These guys manage to marry up what is happening on the macro side, the regulatory front and inside the individual banks and explain it all in a clear and concise view, cheers one advocate. From London and Madrid, the analysts track 36 stocks. Their top selection is Austrias Erste Group Bank, which they believe will return to top-line growth this year, after five years of stagnation. Costs should stay flat as bad debts fall, driving 70 percent [profit before tax] growth, reports Ryan. Erste Groups leading retail franchises across Central and Eastern Europe offer better returns on capital than those in lower-growth Western Europe, he adds. More broadly, the analysts expect banks to drag, not drive, euro area recovery, Ryan says. Further, now that overall credit availability is stabilizing, they forecast significant European Central Bank policy intervention to deal with the weak regional economic outlook. Banks in the core euro area continue to deleverage, he adds, but we believe they can be considered open for business from a credit perspective. Going forward, the team favors Frances BNP Paribas and Société Générale and are bullish on Italys Intesa Sanpaolo and UniCredit. Ryan earned a masters degree in economics and politics from the University of London and covered Polish and CEE financials at a couple firms before joining UBS in 1998. Co-leader Helsby, who has been with BofA Merrill since 2009, previously tracked the sector for Morgan Stanley, among other brokerages. He holds a business studies degree from Englands Liverpool John Moores University.