Royal Bank of Scotland has hired Morgan Stanley as its broker, formally severing ties with the Hoare Govett team that the state-backed bank sold to Jefferies earlier this year.
Hoare Govett's relationship with RBS was strained when the bank's chief executive, Stephen Hester, decided to offload the venerable City institution as part of a huge scaleback in investment banking. He had decided to reshape RBS so that it would never again carry the same risks that led to its taxpayer bailout during the financial crisis.
The broker – a role that essentially acts as a conduit between a company and its investors – has been hit by the loss of several FTSE 100 clients since RBS sold out in February, but being axed by its former parent is arguably the biggest blow. Other account losses include Rexam, the consumer packaging and beer can maker, and G4S, the much-criticised security group.
RBS has two brokers. The second, UBS, held on to its role while a swathe of other banks, believed to include JP Morgan and Goldman Sachs, pitched for what is one of the most coveted clients in the blue chip index.
RBS declined to comment.