UBS and the UK banks shake-up

Some cheering news on an otherwise tough day for UBS - the Swiss bank has bagged key roles for both Lloyds and RBS, as the two British banks agree to a massive shake-up that involves taking 31 billion pounds more of government money. As Victoria Howley and Daisy Ku wrote earlier:

“UBS AG (UBSN.VX) has taken key roles on two landmark deals to shore up British banks — landing the Swiss bank a welcome boost in fees and prestige on the same day it shocked the market with worse-than-expected results.

“UBS is working alongside Bank of America Merrill Lynch (BAC.N) to raise 13.5 billion pounds ($22 billion) for Lloyds Banking Group Plc (LLOY.L) in the world’s largest rights issue.

“It is also working with Morgan Stanley (MS.N) to advise Royal Bank of Scotland Plc (RBS.L) on its participation in the UK government’s Asset Protection Scheme (APS). [ID:nL3540088]

“UBS’s advisory team is led by Alex Wilmot-Sitwell, co-chief executive of the investment bank, and Chris Fox, a managing director in the bank’s London financial institutions group.

Small things matter

Interesting detail in a research note on Thursday from Credit Suisse, highlighting how it pays for bankers to sweat the small stuff in these lean times.

The bank’s own research and Dealogic data shows that deals worth less than $100 million have generated average success fees equivalent to nearly 1.2 per cent of the value of the transaction this year. Deals worth $1 billion or more have yielded just 0.2 percent.

As I wrote earlier, Credit Suisse also says that M&A may replace fixed income as a driver of investment banking revenues in coming quarters as the high-grade bond bonanza draws to a close.

Big banking fees in pharma

The bankers on Merck’s pending $41 billion merger with Schering-Plough will get a nice pay day — one for the record books, in fact.

An amended proxy filing shows that the investment banks on the deal will receive more than $100 million in total advisory fees.

Goldman Sachs is set to receive $33.33 million, while Morgan Stanley will get $20 million for advising Schering-Plough, according to the filing with the U.S. Securities and Exchange Commission.