Drip, drip, drip

There's a steady exodus of staff from Lehman Brothers and HSBC.

Having mislaid a gaggle of UK M&A staff already this year, it seems Lehman is now losing staff from its fund of hedge funds operation. Meanwhile, HSBC, which has already seen the departure of John Studzinski, David Livingstone and numerous other senior bankers, has now seen the head of its equity capital markets business make a swift exit.

Lehman's latest leak follows speculation on the website breakingviews.com that the bank may yet feel compelled to merge with UBS, or even with the equally leaky HSBC, because its revenue growth and stock market capitalisation have failed to keep up with rivals.

Lehman bankers should have nothing to fear, however. The bank's underperforming share price is largely attributable to its disproportionate exposure to the shaky US sub-prime market. And a leading headhunter says there are still plenty of people queuing to get a foot in its door: "It's easy to be overly influenced by what you see in banking and M&A and to forget that it's got a market-leading trading business. They've spent a lot of money building aggressively in London and it hasn't worked - yet. That's not to say it won't."

The same may not apply to HSBC. Another headhunter says the hole left by ECM head Danny Palmer (who reportedly sought pastures new after a US$15m guaranteed bonus over three years expired) is likely to prove difficult to fill. "If they want to hire anyone else they're going to have to pay one hell of a lot."