Oddo BHF joins forces with Commerzbank in brokerage

Oddo BHF is pursuing its strategy of creating a pan-European broker. According to sources familiar with the matter, who confirm information from Bloomberg, the Franco-German bank should announce on Tuesday the integration of trading, sale and research activities of Commerzbank shares.

In the process of restructuring, the German bank said in February that it was looking for a partner for these activities which now have just under 100 employees. These will all be affected by the cooperation but not all will necessarily be transferred to Oddo BHF.

Commerzbank and Oddo declined to comment.

The bank chaired by Philippe Oddo continues to benefit from the withdrawal of traditional banks in brokerage. After Natixis in 2017, it entered into two partnerships last year, one with the Dutch bank ABN Amro for the Benelux market, the other with the Spanish bank BBVA for the Iberian Peninsula.

When client companies of these banks want to carry out an initial public offering (IPO) or a capital increase, these large banks certainly guarantee the operation with their own balance sheet, but rely on Oddo BHF teams to place the securities. with institutional investors.

Critical size

This series of partnerships comes at a time when banks are struggling to maintain the critical size in these businesses which have suffered from regulatory changes in Europe with the new MiFID II directive. The fees paid by asset managers to brokerage firms have fallen steadily since.

“Banks have tried to adapt by reducing costs and focusing on their domestic market, at a time when investor clients wanted much broader offers and were more selective in their choice of brokers,” explains an expert. of the sector.

Oddo BHF is present with 650 institutional investors. Having carried out about twenty IPOs since the beginning of the year, it has 200 professionals in this profession, including 70 analysts. With Commerzbank, the family bank must double the number of securities tracked in Germany.

This cooperation makes Oddo BHF a frontal competitor of Berenberg, a broker based in Hamburg. Together with Kepler, these houses are the largest independent brokers in Europe. Some banks, such as BNP Paribas, which must go up to 100% in Exane, or Société Générale, remain present on the market.

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