HOARE Govett, the historic City broker recently offloaded by Royal Bank of Scotland, is on the verge of losing its mandate with the taxpayer-backed lender.
RBS has begun the process of replacing the broker, which it sold for just £1 in February, as chief executive Stephen Hester shrinks its sprawling balance sheet in order to cut its exposure to risk.
A change would represent the latest blow to Jefferies Hoare Govett – as it is known following its takeover by US investment bank Jefferies – which has lost a series of mandates with firms such as Rexam, Europe’s largest drinks can maker.
The RBS mandate would be coveted in the City and rivals such as JP Morgan, Goldman Sachs and Morgan Stanley are believed to be in the running to pitch for it.
Hoare Govett has lost a series of high-profile mandates in recent months although some, such as Rexam and GlaxoSmithKline, went before it was taken over by Jefferies.
It remains the broker to some blue-chips, however, such as F&C Asset Management, chip-maker Premier Farnell and Dairy Crest and has recently won mandates with miners like Nord Gold and Sirius Minerals while more new business wins are in the pipeline.
The origins of Hoare Govett go back more than 100 years but it lost some of its brand value after being absorbed into Dutch bank ABN Amro, which was later bought by RBS in an otherwise disastrous deal in 2007.
When Hoare Govett was sold earlier this year Jefferies International president David Weaver described it as one of the “most distinguished franchises in corporate broking”.
Yesterday RBS and Jefferies Hoare Govett declined to comment.