Hambros break-up begins with £300m banking sale

The break-up of finance house Hambros has begun in earnest with the £300m sale of its core banking business.

Hambros Banking Group is being sold to Societe Generale of France, in a deal that leaves Hambros with interests in estate agency, insurance, investment and asset management businesses.

The sale of the banking business follows Thursday's disposal of its corporate loans business to Banque of Belgium for an estimated £10m.

Hambros Banking Group takes in a number of merchant banking businesses, including private banking, corporate finance, bonds, treasury, derivatives and international banking. It employs 1,400 people.

The disposals follow pressure from institutional investors who are unhappy at the performance of Hambros. Some have demanded that the whole group should be broken up and sold off.

The sale of the banking group comes amid huge shake-up in the world of merchant banking, which has seen Barclays sell off part of its BZW arm and NatWest sell most of NatWest Markets as the big international banks become more powerful.

The Hambros Chairman, Sir Chips Keswick, said: "In an increasingly competitive and international industry, I believe that the clients of Hambros Banking Group will benefit from the financial strength and international reach of its new parent."

Societe Generale Chief Executive, Philippe Citerne, said: "We are extremely pleased to announce this acquisition, our largest to date outside France.

"It serves to underline our group's expanding commitment both to our international business and to London as a financial centre."

Hambros dates back to 1839 and its break-up signals another nail in the coffin of British merchant banking, which has seen most of its blue-blooded exponents sold to foreign banks.

Most famously, Barings was sold to Dutch group ING for £1 after the Nick Leeson scandal, while others that have fallen into foreign ownership include SG Warburg, Kleinwort Benson and Morgan Grenfell.

The sale will leave Hambros with its estate agency business Hambro Countrywide, insurance, investment and asset management businesses.