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Deutsche Bank keeping its UK broking mandates
SOME of Deutsche Bank AG's corporate broking clients are sticking around so far, even as the lender prepares to shut its global equities business.
McCarthy & Stone Plc, Travis Perkins Plc and Carpetright Plc all say they're staying put. They are among 27 major London-listed companies that have Deutsche Bank as their corporate broker.
In a British peculiarity, publicly traded companies are required to retain corporate brokers to act as intermediaries to the equity markets, providing insight on who is buying and selling their shares. Brokers will often lead any sales of new stock should a company wish to raise funds, making the relationships particularly lucrative.
While many other clients declined to comment, some of their staff, requesting anonymity, indicated that their firms were unlikely to drop Deutsche Bank after its historic retrenchment, and none suggested their company appeared ready to look for new representation.
Several firms said they had been assured by Deutsche Bank that their normal broking service would not be interrupted, even as the bank fires thousands of employees across the world, including hundreds of London-based equities staff.
Deutsche Bank is a corporate broker to these firms:
- Aston Martin Lagonda Global Holdings Plc - luxury cars;
- Barclays Plc - financial services;
- Barratt Developments Plc - residential property;
- GVC Holdings Plc - gambling;
- International Consolidated Airlines Group SA - parent of British Airways;
- Rio Tinto Plc - metals and mining;
- United Utilities - the UK's largest listed water company.
Three of the biggest broking clients are defence contractor BAE Systems Plc, cigarette maker British American Tobacco Plc, and Anglo-Dutch consumer-goods producer Unilever Plc. BAE declined to comment, while BAT and Unilever didn't immediately respond to requests for comment.
The cuts to Deutsche Bank's equities business are less significant for corporate broking than they would have been before the growth of electronic trading. With much of the market now automated, the need to have equity sales and trading staff feeding market intelligence to the corporate broking team has diminished.
"Deutsche have a strong team and we rate them very highly," said Justin Griffiths, a spokesman for McCarthy & Stone, a retirement-home builder, which has employed the bank as its broker ever since its 2015 stock market listing.
Travis Perkins, a retailer of home construction supplies, said in an e-mailed statement that it has no plans to review its broker relationship.
"They remain committed to broking and focused on the corporate advisory business that supports us," the company said. "We consistently monitor and review the performance of all of our advisers, and our relationship with Deutsche Bank is no different."
Carpetright is happy to maintain its current relationship with Deutsche Bank, a spokesman for the flooring retailer said.
A spokeswoman for Deutsche Bank declined to comment. BLOOMBERG