RBS could revive the faltering shake-up of its investment bank by paying bidders to take its stockbroking arm off its hands.
The state-owned bank is considering offering the eventual buyer of the equities business a multi-million pound “dowry” in an attempt to avoid closing it, which could result in up to 5,000 job cuts and cost tens of millions of pounds. A decision on the future of the investment bank, known as global banking and markets (GBM), may be announced as soon as this week.
The chances of a sale of the cash equities business are low but demand is far stronger for Hoare Govett. The small broking business has worked for a number of blue-chip clients and its historic brand remains valuable despite the loss of several mandates, such as GlaxoSmithKline late last year.
Oriel Securities has held talks with RBS and is considering making an offer for the brand and assets of Hoare Govett. If it succeeds it would re-unite Oriel chief executive Simon Bragg and non-executive Peter Meinertzhagen with some of their former colleagues.
Numis and US investment bank Jefferies have also been linked to a deal for Hoare Govett while Japan’s Mizuho Financial is also eyeing parts of RBS, which has appointed Lazard to advise on the scaling back of GBM. It comes after chancellor George Osborne demanded that RBS shrink and sell off parts of the investment bank on a greater scale than it had originally planned.