US-based brokerage Penson Worldwide will close its UK operation in the next few months after failing to find a buyer as part of a wider drive to reduce costs and debt and revive the company’s profitability.
Penson Financial Services of London is currently running at an annual operating loss of US$6-7 million, according to the company. The UK operation has approximately 25 correspondent customers, 60 employees and US$8 million in annual net revenues.
Penson said it had hoped to sell the business but admitted after lengthy negotiations with several financial firms, a sale was unlikely within what it considered an acceptable timeframe.
The firm has already combined its US broker-dealer arm and US futures business with the aim of making more efficient use of capital. In a bid to cut costs and generate much needed cash gains, Penson hopes to generate US$100 million through the sale of assets and internal rationalisation, while aiming for cost savings of US$24 million.
Last month, the firm announced it would sell its Australian subsidiary to Pershing, the clearing and execution outsourcing services subsidiary of BNY Mellon. The transaction is expected to be finalised before the end of the year.