One of the biggest effects of the deal was that interaction between Numis bankers and stock analysts was more strictly limited.
The Zhitong Finance App learned that when Deutsche Bank (DB.US) announced the acquisition of the British boutique investment bank Numis in April last year, some people in the City of London questioned whether the two companies' cultures could be integrated. A year has passed, and the changes are becoming more and more obvious. One of the biggest effects of the deal was that interaction between Numis bankers and stock analysts was more strictly limited.
A number of people familiar with the matter said that before the acquisition, bankers at Numis' London office only needed to climb a few stairs to communicate with analysts in the research department. Meanwhile, Deutsche Bank's internal memorandum on Monday indicated that as part of the consolidation, the bank will transfer Numis' stock analysts to its new London office. This means that analysts and bankers at this boutique investment bank will now be in different workplaces.
Although most large investment banks must strictly separate their research and consulting departments, this provision does not apply to London's various independent investment banks focused on the mid-tier market. Numis' bankers understand change is coming, but some say they have lost a key advantage in the fierce competition for corporate commissions in the UK's shrinking IPO market.
This incident highlights the challenges faced by multinational banks when acquiring boutique investment banks. The latter's corporate culture is often more arbitrary, and poor management after acquisition poses risks, including loss of talent and loss of customers. According to reports, some of Numis' smaller clients have been eyeing new corporate brokers because they want more attention from advisory firms that are not part of a multinational investment bank.
Although Numis' bankers and analysts will no longer work together as before, the company is also feeling the benefits of Deutsche Bank's balance sheet. Last year, the investment bank was able to act as the main coordinator of Zegona Communications Plc's €300 million (US$322 million) equity financing to help the company acquire the Spanish subsidiary of the Vodafone Group. Furthermore, according to data provider ARL, Numis had the second-largest brokerage client base in February, although it lags behind Wall Street rivals such as Morgan Stanley and JPMorgan Cazenove (JPMorgan Cazenove) in terms of the company's market capitalization.