The historic corporate broking business Hoare Govett is to be sold to US investment bank Jefferies as Brewin Dolphin’s brokerage begins trading in Spanish hands.
The Hoare Govett sale comes as part of the Royal Bank of Scotland’s dismantlement of its cash equities, corporate broking, equity capital markets, and mergers and acquisitions businesses, in step with the UK government’s demands to change the bank’s wholesale operations.
Century-old corporate broker Hoare Govett and some of RBS’s cash equities staff will move to Jefferies for a nominal cash consideration, with completion of the deal expected by March.
The bank is toting its wholesale wares after revealing on 12 January it would “exit from cash equities, corporate broking, equity capital markets, and mergers and acquisitions businesses” as part of its efforts to deliver against the strategy announced in 2009, after it was taken into public ownership.
The UK government – with an 84% share in the bank after bailing RBS out of the financial crisis in 2008 – has demanded the institution scale back its investment operations, which chancellor George Osborne saw as too risky to be in such close proximity to retail banking.
“As we progress our plans to restructure the group’s wholesale banking division, we are pleased to have reached this agreement with Jefferies,” said Bruce Van Saun, group finance director, RBS. “The transaction will ensure continuity of service to our corporate broking clients.”
Corporate broking in London has seen a number of recent changes. Yesterday Spanish investment bank N+1 completed its acquisition of Brewin Dolphin’s broking division and is now trading as N+1Brewin.
“The team and their clients are in good hands and are well placed to prosper as a key part of N+1’s European strategy,” Brewin Dolphin, which retains a 14% stake in the business, said in a statement.
The takeover was announced in May under terms of a £5 million investment into the company.