eFC Briefing: Fitch Cuts, RBS Reorganizes

Fitch Ratings will cut 150 jobs by September. RBS named more than 20 global and regional division heads for credit and financial institutions teams.

Fitch Ratings anticipates eliminating 150 jobs, roughly 7 percent of its work force, by September. Its Paris-based parent, Fimalac, made the announcement while releasing results for its December quarter. Citing "restricted issuance activity and uncertainty in credit capital markets," Fimalac said Fitch revenue could fall 10 - 15 percent for the current fiscal year. "Given this perspective, Fitch Ratings is cautiously managing all costs.... In addition, action has been taken to reduce variable compensation expenses." Total Securitization, a specialized Institutional Investor Web site, reports Fitch recently laid off "a number of employees" in the structured finance area. That follows similar job-cutting moves by rivals Moody's, Standard & Poor's and Dominion Bond Rating Services.

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Royal Bank of Scotland reorganized its global banking and markets division and named more than 20 senior managers for its credit markets and financial institutions teams. Financial News says the new global heads or co-heads include:

- Euan Hamilton, leveraged finance.

- Joe Walsh, mortgages and financial institution debt capital markets.

- Stephen Eighteen and Mark Fineman, real estate finance.

- Mike Nawas, corporate and structured debt capital markets, corporate loan markets origination and emerging markets.

- Tim Peltil, financial structuring.

- David Bassett, bond and loan syndication.

- Stewart Booth, credit trading.

- Matteo Mazzocchi, structured credit derivatives and alternatives.

- Fiona Paulus, sponsors.

- Irenee May, hedge funds.

- Eden Riche, banks.

New regional chiefs for the Americas include George Davala, financial institutions sales, and James Stewart, financial institutions.

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CME Group's proposed takeover of the New York Mercantile Exchange would cause "a slew of job losses from the boardroom to the trading floor, with up to half the trading pits at the energy exchange likely to be closed within two years," according to the Financial Times. While options floor trading probably will remain intact, the FT says remaining futures pit traders - who survived Nymex's introduction of simultaneous electronic trading two years ago - will probably end up with buy outs. The Nymex futures pits could be moved from Manhattan to Long Island, where the exchange already has a disaster recovery site. Staff and management jobs within Nymex will be "gut" as well, the paper says.

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While the overall U.S. economy lost jobs in January, securities industry employment grew by almost 5,000 jobs to post another record high, Labor Department data show. The securities industry had 862,100 employees on payroll in January, compared with an upwardly revised 857,200 in December. The industry added a net 25,000 jobs during the past 12 months, a 3 percent gain. Employment has climbed in each of the last 19 months - showing that widely publicized layoff announcements have yet to make a dent in banks' aggregate headcounts. Record payrolls leave investment banks vulnerable to much bigger waves of layoffs if economic or market conditions deteriorate.

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Andrew J. Morton will become global head of fixed income for Lehman Brothers, the firm's biggest revenue generator, according to the New York Times. He succeeds Roger B. Nagioff. Currently the unit's chief operating officer, Morton holds a Ph.D. in applied probability and joined Lehman in 1993 as head of fixed income derivatives research.

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The upper echelon among health care dealmakers in Europe is in flux, as JPMorgan, Goldman Sachs and Credit Suisse battle over well-connected talent. JPMorgan recently picked off Goldman's top European health care banker, Andrea Ponti. Financial News reports Ponti held partner managing director status and earned some $20 million a year at Goldman. The move comes after Credit Suisse hired four European health care bankers away from JPMorgan last year.

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Broadpoint Securities agreed to buy Bank of New York Mellon's New Jersey-based institutional fixed income division, BNY Capital Markets. "Substantially all" of its 49 professionals are expected to join Broadpoint's new fixed income division, to be headed by Joe Mannello as executive managing director. Other division executives are Greg Sullivan, head of sales, Riaz Haidri, co-head of trading, and Michael Rowe, head of research. The group includes nine traders, 22 sales people, eight desk analysts and 10 support staff. It traded $35 billion of securities last year. The deal is expected to close by the end of March.