RBS cuts ties with former broking arm
Broker Hoare Govett set adrift by one-time parent and loses account with major packaging company
Royal Bank of Scotland is set to axe Hoare Govett as its broker, just months after selling the historic City institution as part of a dramatic scale-back in investment banking.
The state-backed bank has kicked-off a process to replace Hoare Govett, one of the Square Mile's oldest brokers, which is understood to have attracted the interest of some of the biggest names in the field. JP Morgan, Goldman Sachs and Morgan Stanley are among those said to be looking to pitch.
Hoare Govett's relationship with its parent became strained as the bank's chief executive, Stephen Hester, slashed RBS's balance sheet by more than £700bn. Mr Hester reduced RBS's exposure to investment banking so that it would never again carry the risks that led to the bank's state bailout during the financial crisis.
"The only reason Hoare Govett was brought on board at RBS was because they were the house broker," said a banking source. "I just don't think that they ever had a proper relationship."
Although in itself not particularly lucrative – a broker essentially acts as a conduit between a company and its investors – the role is seen as vital to building relationships that can later lead to millions of pounds worth of corporate advisory work.
Hoare Govett has been hit by the loss of several FTSE 100 clients since the US investment bank, Jefferies, bought the broker for a nominal sum in February. As well as being dropped by RBS, The Independent on Sunday can reveal that Rexam, the consumer packaging and beer can maker that is a constituent of the benchmark index, has replaced Hoare Govett with Credit Suisse.
Rexam made the decision before the broker was snapped up by Jefferies, but it is a blow after the company also lost security giant G4S and pharmaceuticals group GlaxoSmith-Kline since the end of last year.
However, Hoare Govett has made some ground up in the mining sector since moving to Jefferies, an area in which the investment bank has significant corporate advisory expertise. These were Nord Gold, a spin-off from the Russian group Severstal, and Sirius Minerals, an outfit exploring for Potash in the UK.
It is understood that Hoare Govett might be closing in on more broking roles in the natural resources sector, though it also won a role with Bilfinger Berger Infrastructure Fund, which was spun-off in London from its German parent in March.
Spokespeople for RBS and Jefferies Hoare Govett declined to comment.
- 2 Katie Hopkins attacked me on Twitter — so I reported her to the police for inciting racial hatred
- 3 Tidal: Jay Z's Spotify rival streaming service criticised for making wealthy artists even richer
- 4 Brixton squat flats now costing up to £3k per month show how out of control rent is in London
- 5 A new (old) cure for MRSA? Revolting recipe from the Dark Ages may be key to defeat infection
Costa Concordia: Shipment of Mob drugs was hidden aboard cruise liner when it hit rocks off Italian coast, investigators say
Brixton squat flats now costing up to £3k per month show how out of control rent is in London
A new (old) cure for MRSA? Revolting recipe from the Dark Ages may be key to defeat infection
Jeremy Clarkson 'could be given minder' ahead of a potential Top Gear return
Germanwings plane crash: Transcript reveals passengers 'screamed for over five minutes' before plane crashed into mountain
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
Street preacher quoting from the Bible fined for calling homosexuality an 'abomination'
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
The West has it totally wrong on Lee Kuan Yew
David Cameron calls Labour 'hopeless, sneering socialists' while announcing 7-day NHS plans
iJobs Money & Business
£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...
£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...
£45,000 - £55,000: Loren Hughes: Are you looking for a new opportunity that wi...
Circa £45,000-£50,000 + benefits: Sheridan Maine: Are you a newly qualified ac...