Two of Britain’s biggest banks are both now searching for new corporate brokers, City A.M. understands, in a shake up of the sector’s relationships with the investing marketplace.
UBS and Morgan Stanley are RBS’ current corporate brokers. UBS, it is understood, is highly unlikely to repitch for the role because of existing privatisation work it has with other clients.
Corporate broking is an unusual and unpaid role in which investment banks offer advice to companies on trends in the market and sentiment among investors. In RBS' case, the new broking contract will include advisory work for a possible privatisation.
In return, the brokers hope to be in with a better chance of landing lucrative roles on deals such as debt or equity fundraisings, and mergers and acquisitions.
JP Morgan is a leading broker of major firms, but also works on behalf of UK Financial Investments, the government unit responsible for selling off the taxpayer stake in RBS, which could pose a conflict if the US bank wants the role with RBS. Other possible contenders may include Bank of America Merrill Lynch and Citibank.
The revelation that RBS is looking for new brokers was first reported by Sky News, and came after City A.M. reported that Barclays may also change its broking relationships.
Its current brokers Deutsche Bank and Credit Suisse have also been invited to re-pitch for the position.
It is the first time Barclays has reviewed its broking arrangements in four years.