HBOS, one of the big FTSE 100 banking groups, said yesterday it was reviewing its arrangements with its financial advisers and was dropping Cazenove, which has been broker to it since the flotation of Halifax in 1997.
HBOS will now be advised by Dresdner Kleinwort Wasserstein - which joined Cazenove as joint brokers in 2001 after the merger of Halifax with the Bank of Scotland - and Morgan Stanley, the US banking group that poached a star team from Merrill Lynch last year. HBOS will be Morgan Stanley's first FTSE 100 broking mandate.
Cazenove, still the leading corporate stockbroker in the UK, lost another FTSE 100 client in December when it was dropped by the ITV group, which itself is the product of a merger between Carlton (a Cazenove client) and Granada.
Cazenove is still the broker to 41 of the FTSE 100 companies, ahead of Merrill Lynch, ABN Amro and UBS.
"No one likes losing clients but when you're as pre-eminent as we are it's inevitable that there are going to be some losses," said one source close to Cazenove.