CBA's announcement of a "strategic alliance" with Goldman Sachs is reflective of the "mixed success" Australian banks have had in the institutional equities space, says Minter Ellison.
Speaking at a luncheon in Sydney yesterday, Minter Ellison partner Daniel Scotti said Australian banks are lagging their global peers when it comes to bringing institutional stockbroking in-house.
CBA announced that it was closing its institutional equities business this week as part of a deal with Goldman Sachs.
Under the agreement, Goldman Sachs will have exclusive access to CBA's CommSec clients, who in turn will be given access to the investment bank's IPOs.
Mr Scotti said there will also be implications for NAB as a result of the deal. NAB subsidiary JBWere is roughly 20 per cent owned by Goldman Sachs.
"How that plays out will all be very interesting. It’s an interesting solution to an area that’s been a little bit of a problem for banks," Mr Scotti said.
"The global banks have probably done a better job of leveraging the commercial side of their banking franchises to translate that into institutional activities.
"In Australia the Australian banks might have been a little slower in coming to that party and some have done it reasonably well, others with varying success," he said.
The CBA/Goldman Sachs 'alliance' is a new model aimed at "cracking the nut" of institutional stockbroking, but time will tell if it is successful, Mr Scotti said.
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