RBS to spin off M&A advisory to create an independent firm
RBS is planning to spin off its M&A advisory unit into a standalone business to be run by its current staff.
Simon Penney, head of RBS’s investment bank in the Middle East and Africa, told Reuters: “The M&A bankers plan to form a boutique business… It’s not clear as to which regions would join in but that’s the plan.”
The new firm will be led by John McIntyre, currently the bank’s head of corporate finance in Europe, the Middle East and Africa, and will also continue to employ around 45 to 50 bankers who run the unit at RBS.
But for now, they are staying put as they finish advising on a pipeline of mandates won during their time at RBS but which have not yet completed. The work means that the timeline for their departure is not yet clear but once the unit has become independent, the new firm could seek out additional financing.
The news follows RBS’s announcement in January that it was looking for ways to get rid of its equities and M&A businesses.
Since then, it has sold off Hoare Govett, the City brokerage, for the nominal fee of £1 to US investment bank Jefferies, and explored options for its cash equities business.
Chancellor George Osborne said he wanted to see RBS shrink its investment bank dramatically. Chief executive Stephen Hester agreed it is not economical to continue with all of its activities.