Glaxo adds to gloom at RBS

Pharmaceuticals blue-chip GlaxoSmithKline (GSK) has replaced Hoare Govett as one of its brokers, putting more pressure on the Royal Bank of Scotland's corporate broking arm.

GSK was a longstanding client of nearly 17 years, but Hoare Govett was replaced by Citi over the Christmas period. Joint broker UBS retained its role.

This leaves Hoare Govett with only eight FTSE clients, two of which – G4S and Tullow Oil – are believed to be reviewing their position.

The news could not come at a worse time for RBS, which has hired Lazard to sell chunks of its equities business, including Hoare Govett. Oriel Securities and Numis are thought to be interested in Hoare Govett, but if a buyer is not found there are fears that the broker might be shut down.

RBS's chief executive, Stephen Hester, is due to release the results of a strategic review of the bank before its annual figures next month.

A GSK spokesman said: "We have enjoyed a long and constructive relationship with Hoare Govett."

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