RBS Said to Be Nearing Sale
Simon Dawson/Bloomberg
RBS said on Jan. 12 it will cut about 3,500 jobs at its investment banking division as it sells or closes its unprofitable cash equities, mergers advisory and equity capital markets divisions.
RBS said on Jan. 12 it will cut about 3,500 jobs at its investment banking division as it sells or closes its unprofitable cash equities, mergers advisory and equity capital markets divisions. Photographer: Simon Dawson/Bloomberg
Royal Bank of Scotland Group Plc,
Britain’s biggest state-owned lender, is nearing an agreement to
sell its Hoare Govett corporate broking unit to Jefferies Group
Inc. (JEF), two people with knowledge of the talks said.
The sale, which may be announced by the end of the month,
involves about 40 Hoare Govett employees as well as a small
number of additional research and equity sales staff, said the
people, who declined to be identified because the negotiations
are private. Jefferies will pay only a nominal amount for the
business and RBS has offered to provide funds to cover some
staff costs, the people said.
RBS said on Jan. 12 it will cut about 3,500 jobs at its
investment banking division as it sells or closes its
unprofitable cash equities, mergers advisory and equity capital
markets divisions. The bank decided to exit the units after
volatile markets and increasing regulation rendered it
impossible to generate returns that beat their cost of equity.
Spokesmen for Jefferies and Edinburgh-based RBS declined to
comment. New York-based Jefferies hired former UBS AG Vice
Chairman Benjamin Lorello in October 2009 to expand its global
investment banking operations as its rivals retreated after the
credit crisis of 2008.
Any sale leaves questions unanswered about the fate of the
remaining employees whose jobs are being eliminated, said the
people. Lazard Ltd. (LAZ), which is advising RBS on scaling back its
investment bank, has been given until Feb. 23, when RBS reports
year-end results, to find buyers for the remaining businesses,
which include the cash equities operations and units in Asia
Pacific and Australia, executives at the lender said on Jan. 16.
Corporate brokers, unique to the London market, are hired
by companies to liaise with shareholders. In return, they are
usually hired by their clients to advise on stock offerings and
mergers. Hoare Govett has around 70 listed clients including
engineering firm Rolls-Royce Holdings Plc and BAE Systems Plc (BA/),
Europe’s largest defense group.
To contact the reporters on this story:
Liam Vaughan in London at
lvaughan6@bloomberg.net;
Gavin Finch in London at
gfinch@bloomberg.net
To contact the editor responsible for this story:
Edward Evans at eevans3@bloomberg.net
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