Underwriters affiliated with U.S. banks continued to increase their share of the domestic initial public offering market last quarter, bringing 22 companies public-about 50% more than a year earlier.
Overall, banks led 17.2% of the IPOs, based on dollar volume. That's up from 15.8% a year earlier, according to Thomson Financial Securities Data. On the basis of volume, four banks were in the ranks of the top 10 IPO managers, one more than a year ago.
Though two big deals propelled first-quarter volume to $9.4 billion- about double what it was last year-the general market for new public equities remains in the doldrums.
"Liquidity is a huge draw, and a number of large issues from high- quality companies or well-known brands were popular," said David DiPietro, head of equity capital markets at BT Alex. Brown Inc.
There were fewer than 100 IPOs in each of the last three quarters. The streak of low issuance was the first since the recession of the early 1990s.
"I would not call the IPO market robust, outside of Internet issues," Mr. DiPietro said. "The new-issue market had such a tremendous focus on the Internet and leading technology companies that it was hard to get people to focus on much else."
In terms of volume, BT Alex. Brown Inc. led the banks. The Bankers Trust unit ranked No. 5, managing 6.3% of IPOs based on dollar volume. All of these were for Internet, communications, or other technology companies.
Citigroup unit Salomon Smith Barney and two other banks that have acquired significant regional firms-BankBoston Corp. and BankAmerica Corp.- also ranked among the top 10 IPO managers.
Salomon ranked No. 8 with a 3.3% market share, BancBoston Robertson Stephens Inc. ranked No. 9 with 3.1%, and NationsBanc Montgomery Securities Inc., a BankAmerica unit, ranked No. 10 with a 2.6% share.
Except for Salomon, the other three bank-owned firms were all IPO- focused shops with a heavy technology influence when they were acquired. Salomon became part of the Citigroup family when its owner, Travelers Group, merged with Citicorp last year.
The IPO market has given a rough reception to companies in many basic industries, especially health care, energy, chemicals, and steel. Indeed, investors were disappointed by the two biggest IPOs last quarter, both from manufacturing companies.
The largest deal by far was a $2.3 billion IPO for Pepsi Bottling Group Inc., Somers, N.Y., a spinoff from the softdrink giant. Merrill Lynch & Co. took the firm public on March 31 at $21.69, and it closed at $20.88 yesterday.
A $1.4 billion IPO for General Motors spinoff Delphi Automotive Systems Inc., Troy, Mich., propelled lead underwriter Morgan Stanley Dean Witter & Co. to No. 2 last quarter. But at market close yesterday, Delphi's share price was $16.38, down from its issue price of $18.62 on Feb. 5.
Three more U.S. banks-including some that built rather than bought equity capabilities-participated in the IPO market last quarter: J.P. Morgan & Co. (13th), U.S. Bancorp (14th), and Bank One Corp. (21st).
