HSBC severs broking tie with Goldman as CFO stamps his mark

Europe's biggest lender is calling time on its corporate broking relationship with Goldman Sachs a decade after the Wall Street bank orchestrated one of the biggest capital-raisings undertaken by a financial institution during the financial crisis.

Sky News has learnt that HSBC Holdings has informed Goldman that it will not be part of its future broking line-up, following a review led by Ewen Stevenson, the FTSE-100 bank's new finance chief.

The development will be seen as a significant one among the coterie of senior City bankers who dominate the tight-knit practise of corporate broking - a peculiarly UK-specific tradition that aims to ensure major listed companies are kept abreast of key shareholders' views.

HSBC's joint corporate brokers have been Credit Suisse and Goldman since 2011, underlining the often-enduring nature of these relationships.

While corporate broking ties are not in themselves lucrative, they invariably lead to more remunerative work on financing activity or advising on mergers.

The FTSE-100 corporate broking market is dominated by a handful of investment banks, including Goldman and JP Morgan Cazenove.

It was unclear on Monday whether HSBC would also be parting company with Credit Suisse, a decision likely to be made more fraught by the fact that Mr Stevenson worked at the Swiss bank for many years.

The most significant milestone in Goldman's relationship with HSBC came in 2009, when the US investment bank helped HSBC to raise £12.5bn by tapping shareholders in a rights issue.

The capital-raising was the biggest-ever in the UK market, and was carried out by HSBC to bolster its balance sheet at a time of profound investor anxiety about the safety of major lenders - even those which had not been forced to turn to governments for bailouts during the crisis that had begun in 2007.

Sources close to HSBC described the decision to replace Goldman as "a standard one led by a new CFO", but acknowledged that it would be interpreted as a signal of Mr Stevenson's determination to inject fresh impetus into the bank.

The new finance chief, who joined from Royal Bank of Scotland, was recruited by HSBC chairman Mark Tucker and chief executive John Flint, both of whom have been in their roles for less than two years.

HSBC's first-quarter results beat expectations last month, but continues to face questions about its strategy in a period of continued low interest rates.

Some investors would like to see the bank move more rapidly to explore bolder strategic moves at a time when many peers are in comparatively weak positions.

Goldman's replacement as HSBC's joint broker is understood not to have been finally determined by Mr Stevenson and senior colleagues.

An HSBC spokesman declined to comment on the decision to replace Goldman, which also declined to comment.