Commonwealth Bank is closing its institutional equities business.
Australia’s biggest bank has done a deal with Goldman Sachs to enable CommSec and Commonwealth Private Bank customers to access the Goldman Sachs pipeline of equity offerings.
Goldman Sachs will also provide access to its investment research and its global macroeconomic and strategic research.
The Commonwealth bank team, part of the bank’s institutional banking and markets division, will wind down from December 16. Up to 50 staff will be affected.
The division has been struggling. In the six months to June, the division showed a 6% decline in cash profit to $615 million.
“Certain roles will be affected by this decision and the group is working through the impact on its people, including exploring opportunities for redeployment both within Commonwealth Bank and Goldman Sachs,” CBA said.
Kelly Bayer Rosmarin, Group Executive for Institutional Banking and Markets at the Commonwealth, says the institutional equities business has high calibre people, who have led or participated in nearly $60 billion in capital raisings and government privatisations in Australia.
“Making the decision to discontinue this team has been difficult,” Rosmarin says.
“Our clients are increasingly operating internationally, and while we are able to offer global solutions in many parts of our business, we have not been able to provide access to global equity markets.
“Meeting this need with a partner of Goldman Sachs’ global capability and reputation is an exceptional outcome for our clients.”