As we reported yesterday, RBS’s equities business may be being purchased, possibly by in the independent brokerage firm Cenkos, which claims to be underweight and has been struggling to recruit in the light of big sign-ons (once) offered by large banks.
This is just as well, because RBS’s equities team appears substantially overweight.
In particular, the bank has a massive 200 equities analysts alone covering EMEA, Asia and Australia, of whom 79 are in Europe, 74 are in Asia and a (huge) 40 are in Australia. By comparison, there are only 110 bankers working in its front office ECM teams.
If a sale doesn’t go through, this leaves the future of RBS’s equity analysts looking uncertain. Plenty of other banks have been cutting analysts and plenty of others are expected to continue cutting in the weeks to come. Citi, for example, which built up its team last year, is also rumoured to be overweight on the analysis side. Yesterday, Vikram Pandit promised to cut expenses by $2.5bn-$3bn this year following a loss of $163m in the securities and banking division in the fourth quarter.
“You are going to see another round of cuts in the next few weeks,” says one research headhunter.