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The article profiles the City of London, England. The city has a square mile of buildings on the north bank of the Thames that was the financial center of Great Britain for several centuries. London Stock Exchange, commodity markets, and commercial banks are located at the east of St. Paul's Cathedral. Special pubs are also available for bankers, stockbrokers, and diamond men. Of all the institutions present in the city, the merchant banks are the most prominent and largest institution.

This article presents information about the business activity of England-based S.G. Warburg & Co. Ltd. It is informed that S.G. Warburg is the only British merchant bank with permission to operate in Japan. It is Great Britain's biggest pension fund manager and runs about $7 billion domestic and international, which accounts for about 18% of its earnings. In the fiscal year ended March 31, 1984, S.G. Warburg reported after-tax earnings of £20.8 million for a respectable 15% return on shareholders' equity.

The article features the revival of the financial center at the "City" in London, England in 1949. It discusses how Britain has developed sterling second international currency in the face of worldwide shortage of dollars outside the dollar countries and outside its own sterling area. It also presents the role of merchant banks in bringing back foreign business in Great Britain, such as Hambros Bank which reportedly leads in financing British exports to the U.S.

London, England-based merchant bank MC Securities owned by Germany-based Hans-Joerg Rudloff has lost its independence to a large continental European commercial bank Banque Bruxelles Lambert SA (BBL). The new venture will be called MC BBL Eastern Holdings. The obvious conclusion when the news leaked was that Rudloff's $75 million venture had failed. Much of the greater part of MC's business might be in western Europe but this did not apparently attract attention. Rumor had it that the highly-publicized drive into Russia had eaten up Rudloff's capital and that MC Securities needed recapitalizing. Rudloff has denied the rumor, pointing out that despite start-up costs MC's eastern European operation is already pretty well out of the red. It is perhaps inevitable that Russia, the most flamboyant area of MC Securities' business, became its public face. It meant, however, that other areas were overshadowed. Western European corporate finance and equity capital markets are the most important parts of the business, contributing 90% of the firm's revenues in 1995. Russia is the great gamble. One interpretation of the deal with BBL is that Rudloff has given up his independence for Russia. Although he will control only 14% of MC-BBL Eastern Holdings, which he admits constitutes a dilution, the deal with BBL was driven by the potential that Russia offers.

This article presents a report of the performance and profits made by the London merchant banks during the period of 1993-94. These banks have made substantial profits in 1992 and 1993 after a dismal period in the late 1980s when most suffered from disastrous strategic decisions. It was believed that there could be few industries where terminology creates such strong feelings such as, should the London, England-based securities firms be called "merchant banks" or "investment banks." In this article some disadvantages of merchant banks are identified and it is assumed that due to these disadvantages, merchant banks fell back on the one major factor in their favour, that is, their long history in international business. Banks were almost obsessed by history. This article excludes those firms that were not traditionally considered to be merchant banks but they were doing similar business. Such firms include the securities firms owned by commercial banks. According to some securities analysts who follow merchant banks, much of the profit earned had come from trading business which created a phase of dilemma in the merchant bank stock markets.

The article focuses on David Scholey, the joint chairman of S.G. Warburg and Co. Ltd. He is considered for the post of the governor of the Bank of England. Scholey may claim he doesn't know why he is tipped to be the next governor of the Bank of England. But former Warburg directors have no doubt that it is his overriding aim. And he has all the right contacts. Of the history and experience the merchant banks made, S.G. Warburg and Co. has been in existence for only 35 years, but it has already developed enough aura and prestige to rank it with the best in London, England. But Scholey makes no exaggerated claims for it. Scholey does prefer to look in broader terms in trying to identify trends in Warburg's business since he became joint chairman. He highlighted that the breadth of his corporate finance-based relationships and his overseas government advisory business has broadened. He is aware that changes will have to come in the composition of merchant banking business, but as always was too reticent to be definite on those changes.

This article reports that the decision by half the Hambros PLC clan to pull out of the family bank deprives the London City, England establishment of yet another prop. Apart from Rothschilds, Hambros PLC is the last of the great British merchant banks to be managed directly by the controlling family. Family banks have been central to the City's reputation for financial excellence, but they have also attracted persistent criticism. With its present share structure, Hambros would have great difficulty in raising large amounts of cash. Hambros Trust, the family's investment vehicle, controls 49.9% of the votes through its 15% stake in Hambros PLC, the holding company which owns the bank. This represents about 90% of the Trust's assets. The plan is to convert the Trust's high voting shares into ordinary equity, leaving it with a holding of around 15%. This will then be sold off, but only to a buyer approved by the bank's management board. Hambros will be like any other public company, vulnerable to takeover bids.