Advest’s 515 financial advisers will add to Merrill Lynch’s brokerage forces their experience in the provision of private clients advisory services and portfolio management for both individuals and institutional investors. The transaction is part of Merrill Lynch’s strategy to expand its private client business, and it is expected to complete later this year.
UBS, the Swiss investment bank, has agreed to sell its Private Banks and GAM unit to Swiss private bank Julius Baer. The deal will take forward the consolidation of Switzerland’s fragmented wealth management market. According to UBS, the consideration will amount to an implied value of SFr5.6bn ($4.4bn), comprising of SFr3.8bn in cash and cash equivalents, and a 21.5% stake in the enlarged Julius Baer that UBS values at an implied SFr1.8bn. The unit is made up of three private banks – Banco di Lugano, Ehigeer & Armand von Ernst and Ferrier Lullin – and specialist asset manager GAM.
Fund managers can for the first time been able to trade credit derivatives electronically. Previously the non-standardised nature of certain instruments made it difficult to automate the process. The operator of the new system, MarketAxess, will initially offer trading in credit default swaps (CDS) and indices on CDS. A rival CDS index trading platform from TradeWeb, an operator of electronic bond systems, is expected to be launched by mid-October.
Citigroup and Lloyds TSB have agreed a partnership to pool their clearing networks for corporate transactions. The partnership will allow Citigroup clients in the UK to use Lloyds’ branch network, Lloyds TSB will provide a virtual branch network for the use of Citigroup clients in the UK, while its international clients will have access to parts of Citigroup’s international branch network.
ABN AMRO announced it would outsource the management of its IT systems to five groups, including IBM and India’s Infosys, for €1.8bn. The deal is thought to be one of the biggest-ever outsourcing contracts, thanks to which the Dutch bank hopes to save€258m annually .
European Islamic Investment Bank (EIIB) has applied for the UK’s Financial Services Authority’s (FSA) permission to accept deposits and conduct investment banking activities. EIIB was incorporated in the UK in January and will be the first independent Islamic bank established and managed on a sharia-compliant basis to be regulated by the FSA.
Euronext changes for LSE Paris-based exchange Euronext is prepared to cut its stake in clearing house LCH.Clearnet from 25% to 15% and to reduce the number of directors it can appoint to two, to facilitate the approval of its bid for the London Stock Exchange by the UK Competition Commission. Euronext shareholders are, however, pressing for a merger with Frankfurt rival Deutsche Börse, which also attempted a takeover of LSE earlier this year. The shareholders, who collectively own 40% in Euronext, have a similar stake in Deutsche Börse and have voiced their views to the latter exchange, whose new chairman, Reto Francioni will formally be appointed this month. The New York Mercantile Exchange (Nymex) is reported to have agreed to sell 10% of its stock to General Atlantic, a private equity firm. Nymex has been at the centre of a minority stake buyers battle, involving Blackstone, another private equity group, and Michael Marks, a former Nymex chairman. Nymex is also considering launching its crude oil futures contract, West Taxes Intermediate (WTI), on its London platform, accompanying its Brent crude exchange contract. Trio takes Chinese stake Goldman Sachs, Allianz and American Express have agreed to buy around 10% of state-owned Industrial and Commercial Bank of China for $3bn. The investment in the bank, one of the top Chinese players, could become the biggest foreign investment in a local bank. The Goldman Sachs-led consortium signed a memorandum of understanding last month. It is said that the final deal was likely to be higher than the $3.1bn paid in August by Royal Bank of Scotland and partners for a 10% stake in Bank of China.
