Who’s buying RBS’s equities business? The Telegraph reported today that, “all of the units up for sale had received indicative offers from potential buyers,” and that, “interest is understood to come from a range of Asian, US and Australian financial institutions, as well as at least one London-based independent broker.”
Which are these institutions and independent brokers? The Economic Times of India thinks Agricultural Bank of China, ANZ, DBS and RBC might be interested in RBS’s Asian units.
In London, rumour has it that the potential bidders for all or part of the equities business include: Oriel Securities, Bank of Montreal, Wells Fargo, Bank of China, and Mizuho. The ‘London-based independent broker’ eyeing RBS equities up is rumoured to be Cenkos. This makes sense: in its most recent results announcement at the end of June 2011, Cenkos said that the “significant upfront guarantees offered by many larger banks” had hindered its ability to recruit and that its secondary equities business, 'lacked scale.'
All this is exciting for RBS’s equities staff, who may yet avoid redundancy. As we reported yesterday, RBS’s teaser for the sale of its cash equities and equities primary business allegedly declares that it employs 1,400 staff across both areas. However, headhunters say front office equities, sales, trading and research staff at RBS number something more like 250.
And yet, there’s a downside to this alleged interest in RBS’s equities offerings: businesses looking at its prospectus are apparently forbidden from hiring its staff for a period of time.
“People who work at RBS are trying to make provisional employment arrangements in case a purchase doesn’t go through,” says one headhunter. “They’re typically contacting heads of businesses at rival firms directly, but are finding that a lot of the firms have looked at RBS’s books and signed agreements saying they can’t poach anyone from there.”
Separately, credit redundancies appear to be gaining momentum.
Headhunters say Barclays Capital cut 10% of its headcount in FX, credit and rates research last week. “BarCap has been cutting quietly for some time by asking people to put their hands up and then paying them off,” alleges one search consultant. “This seems to have been the first time they’ve made mandatory redundancies.”
Deutsche is also said to have let go of people in credit, hedge fund sales and from its Scandinavian fixed income desks. And Morgan Stanley let go of euroswaps traders, flow rates traders, credit salespeople last week – including its head of European credit sales and trading, and its head of emerging market fixed-income sales and trading.
Prospects for redundant credit staff don’t look too great. However, there is hope. As we noted yesterday, UBS’s ex-head of Credit trading, Stephen Drew, has got a new job with Thames River.