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.

News
people'It can last and it's terrifying'
Sport
Danny Welbeck's Manchester United future is in doubt
footballGunners confirm signing from Manchester United
Sport
footballStriker has moved on loan for the remainder of the season
News
people Emma Watson addresses celebrity nude photo leak
PROMOTED VIDEO
Sport
footballFeaturing Bart Simpson
News
Katie Hopkins appearing on 'This Morning' after she purposefully put on 4 stone.
peopleKatie Hopkins breaks down in tears over weight gain challenge
Arts and Entertainment
Olivia Colman topped the list of the 30 most influential females in broadcasting
tv
News
Kelly Brook
peopleA spokesperson said the support group was 'extremely disappointed'
Life and Style
techIf those brochure kitchens look a little too perfect to be true, well, that’s probably because they are
Sport
Andy Murray celebrates a shot while playing Jo-Wilfried Tsonga
TennisWin sets up blockbuster US Open quarter-final against Djokovic
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Hare’s a riddle: Kit Williams with the treasure linked to Masquerade
booksRiddling trilogy could net you $3m
Arts and Entertainment
Alex Kapranos of Franz Ferdinand performs live
music Pro-independence show to take place four days before vote
News
news Video - hailed as 'most original' since Benedict Cumberbatch's
News
i100
Life and Style
The longer David Sedaris had his Fitbit, the further afield his walks took him through the West Sussex countryside
lifeDavid Sedaris: What I learnt from my fitness tracker about the world
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Planning Manager (Training, Learning and Development) - London

£35000 - £38000 per annum + benefits: Ashdown Group: A highly successful, glob...

Business Anaylst

£60000 - £75000 per annum + BONUS + BENEFITS: Harrington Starr: Business Anal...

SQL Implementation Consultant (VB,C#, SQL, Java, Eclipse, integ

£40000 - £50000 per annum + benefits+bonus+package: Harrington Starr: SQL Impl...

Head of IT (Windows, Server, VMware, SAN, Fidessa, Equities)

£85000 per annum: Harrington Starr: Head of IT (Windows, Server, VMware, SAN, ...

Day In a Page

'I’ll tell you what I would not serve - lamb and potatoes': US ambassador hits out at stodgy British food served at diplomatic dinners

'I’ll tell you what I would not serve - lamb and potatoes'

US ambassador hits out at stodgy British food
Radio Times female powerlist: A 'revolution' in TV gender roles

A 'revolution' in TV gender roles

Inside the Radio Times female powerlist
Endgame: James Frey's literary treasure hunt

James Frey's literary treasure hunt

Riddling trilogy could net you $3m
Fitbit: Because the tingle feels so good

Fitbit: Because the tingle feels so good

What David Sedaris learnt about the world from his fitness tracker
Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Second-holiest site in Islam attracts millions of pilgrims each year
Alexander Fury: The designer names to look for at fashion week this season

The big names to look for this fashion week

This week, designers begin to show their spring 2015 collections in New York
Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

'I like Orwell's writing as much as the next talented mediocrity'

Will Self takes aim at Orwell's rules for writing plain English
Meet Afghanistan's middle-class paint-ballers

Meet Afghanistan's middle-class paint-ballers

Toy guns proving a popular diversion in a country flooded with the real thing
Al Pacino wows Venice

Al Pacino wows Venice

Ham among the brilliance as actor premieres two films at festival
Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

Neil Lawson Baker interview

‘I’ve gained so much from art. It’s only right to give something back’.
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering