The Lazard Houses, last year's winner, came in third. It advised on 37 cross-border transactions, with a combined value of pounds 11.9bn.
SBC, along with merger partner UBS, spearheaded the European assault on the rankings. Between 1996 and 1997, the two Swiss banks gained fifth and seventh places respectively.
Their ascent was at the expense of big-hitting US banks such as Goldman Sachs and Merrill Lynch. Goldmans slipped from third to fifth, whilst Merrill fell from sixth to tenth.
But the success of UBS and SBC does not mean European banks are starting to outperform their American rivals, according to Philip Healey, Acquisitions Monthly's editor.
He said: "This is not the beginning of a trend, it's a case of two European banks doing very well, rather than the Americans doing badly."
The league table sharply illustrated the combined force of SBC and UBS, which announced plans to merge last December in a pounds 15bn deal. Between them, the two Swiss banks advised on 70 European cross-border deals in 1997, with a combined value of pounds 22.3bn. The Swiss banks hope to obtain formal shareholder approval of their merger next week.
The takeover of Mercury Asset Management (MAM) by Merrill Lynch, valued at more than pounds 3bn, was the biggest cross-border European deal of 1997.
On European cross-border transactions in 1997
Adviser Value of deals (pounds m)
1 Morgan Stanley 19,280
2 SBC Warburg Dillon Read 13,957
3 The Lazard Houses 11,914
4 JP Morgan 10,525
5 Goldman Sachs 10,312
6 Credit Suisse First Boston 9,610
7 UBS 8,334
8 Rothschild Group 7,912
9 Lehman Brothers 7,443
10 Merrill Lynch 7,069
Source: 'Acquisitions Monthly'