Tuesday 25 September 2018

Investec reassures staff on takeover reports

Michael Cullen, chief executive of Investec Ireland
Michael Cullen, chief executive of Investec Ireland
Donal O'Donovan

Donal O'Donovan

Staff at Investec's Irish arm have been told that any decision to sell the business will be discussed with them prior to any announcement.

The Irish Independent revealed last Friday that South-Africa-based Investec was in talks with potential bidders, including AIB, about selling its Irish arm.

Investec Ireland, led by long-time chief executive Michael Cullen, is involved in private banking, capital markets and investment banking.

The Irish Independent has learned that following last week's report, Investec management called staff in Ireland together and reassured them that the Irish business had been performing well, and that this would naturally attract potential buyers. Staff were told that media reports were speculative.

Investec has been in the Irish market since 2000, but gained significant scale when it took over the former NCB Stockbrokers in 2012.

While its UK parent has invested in Irish mortgages, the brand never entered the retail market in this country.

Investec's group chief executive said in late 2016 that the Irish business might look to make acquisitions to build scale here, but mooted deals failed to materialise.

It is understood that the potential regulatory impact of Brexit on Investec Ireland, parts of which fall under the regulatory umbrella of its UK-based direct parent, have also shifted management to consider a sale.

Read more: Market tremors highlight risk of buying brokers as cycle nears end

An acquisition by State-owned AIB would return the country's biggest bank to the stock-broking business it exited when it was forced to sell Goodbody Stockbrokers as a condition of its bailout.

However, for staff at Investec a sale to AIB would bring them into the state sector. Wage rules at AIB, introduced after the bailout, mean no banker can be paid more than €500,000 a year, unless that was already their pay level.

Banker bonuses are already effectively banned and anonymised staff pay data is subject to parliamentary scrutiny and Freedom of Information rules.

Irish Independent

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