Hambros yesterday admitted it had failed to revive the flagging fortunes of its 158-year-old investment bank as it revealed plans to sell its banking group to Societe Generale (SocGen), the French bank, for pounds 300m in cash. The deal will lead to yet another round of redundancies in the City.
"We sadly came to the conclusion that we were not making any significant return to our shareholders," said Sir Chips Keswick, Hambros' chairman. Hambros announced in October it had retained Schroders, a rival bank, to help it conduct a strategic review, following a series of disappointing profit figures and fierce criticism of its involvement in the CWS scandal.
Aficionados of UK City institutions will draw at least some comfort from SocGen's decision to retain the famous Hambros name. SocGen is to rename its UK investment banking division SG Hambros, following the tradition set by the numerous foreign banks that have swallowed up British financial institutions over the years.
Hambros yesterday had the dubious honour of becoming the third British banking name to fall into foreign hands in the last two months. Last month, National Westminster Bank (NatWest) sold chunks of NatWest Markets, its investment banking arm, to Bankers Trust, the US bank, and Deutsche Morgan Grenfell, the investment banking arm of Deutsche Bank, the German banking giant. Also last month, Barclays sold parts of BZW, its investment banking arm, to Credit Suisse First Boston, the Swiss-American bank.
The deal will spark yet another round of City redundancies, after recent news that 3,000 City jobs would be cut following the merger between UBS and SBC, the Swiss banking giants.
Philippe Citerne, chief executive of SocGen, said it was too early to detail the likely number of redundancies. "We will try to ensure they [the redundancies] are made in as sympathetic a way as possible," he added. Hambros currently employs around 1,400 people in London. SocGen employs around 1,200.
Those Hambros staff fortunate to be staying will be locked in with golden handcuffs, another feature of the recent wave of consolidation in the financial sector.
Ironically, the break-up of Hambros, then one of two sizeable, fully- listed independent investment banks in the UK, was masterminded by Schroders, the other sizeable, fully-listed independent UK investment bank. The other remaining sizeable independent banks - Rothschild, Flemings and Lazard Bros - are all privately owned.
Despite becoming one of the most famous British banking names, Hambros was founded in 1839 by Carl Joachim Hambro, a Danish merchant. But the distinguished Hambros name was tarnished in recent years by poor results.
The break-up of Hambros, which started on Thursday with the sale of its corporate banking unit to Generale de Banque, the Belgian bank, looks set to continue next year.
Even after yesterday's deal is completed, Hambros plc will still own The Investment Group, including the Hambro Equity Group, a controlling stake in Hambro Countrywide, the property agency, and Hambro Insurance Services, as well as a 44 per cent stake in Guinness Flight Hambro Asset Management.
Yesterday Regent Pacific, one of the most vociferous of Hambros' shareholders, said it was interested in buying the asset management business.
Sir Chips, who will remain chairman of what remains of Hambros, said yesterday he hoped to preside over "an orderly disposal" of Hambros' remaining assets. Sir Chips was also yesterday appointed senior adviser to SocGen.
Michael Harrison, page 23