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This investment bank has cut headcount by 67% over the past 18 months

Two years ago, Haitong Securities was talking up a massive expansion in London, with plans to double its international business and hire hundreds of bankers. This year, after cutting its equities and research business in London, it has just 42 employees – a 67% reduction in headcount in 18 months.

Haitong Securities has just released its 2016 results on Companies House and paints a picture of a challenging period for the bank. Its revenues declined 51.5% to £4.9m in 2016, and the firm posted a loss of £24.1m – nearly double the £12.5m loss it reported in 2015.

Not surprisingly, Haitong has been making some drastic reductions to its UK headcount and has continued to roll out the cuts throughout 2017. It started 2016 with 130 people in London, and was still hiring senior analysts as it looked to bolster its European operation. However, it ended last year with 85 people and, as of 30 June 2017, had just 42 employees in the UK.

Haitong’s revealed last year that it had cut in equity research, with around 25 analysts focused on UK small- and mid-cap research targeted for redundancy. Instead, it was refocusing its London team on Asian economics – what it terms “European Research with a China Angle”. However, Haitong said in its report that the division had not reached “critical mass” last year.

Haitong said that it will continue to reduce headcount in London, with a particular focus on equities and research, and aims to cut staff costs by 25% this year. It will also close “some loss making departments”, it said.

Instead, Haitong’s focus in its UK operation will be building an emerging markets fixed income trading business while “reducing equities and research to a minimum level” and focusing its investment banking business on cross-border M&A and DCM with China.

Haitong launched an emerging markets fixed income team in the third quarter of last year. It hired Vaheesan Sinnathamby, a former executive director at Goldman Sachs, as a managing director with its emerging markets fixed income team.

It spent £17.5m in staff costs last year for for an average headcount of 91 people – or £192k a head. Haitong also spent £571k in recruitment costs last year, compared to £1.1m in 2015.

In May, Christian Thun-Hohenstein, its head of UK investment banking, left the bank, 18 months after joining to drive the firm’s expansion. He was replaced Mark Cresswell, a former J.P. Morgan managing director, according to Financial News.

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Image: Getty Images

AUTHORPaul Clarke
  • Yo
    20 September 2017

    Haitong is a mess. The Portuguese/Chinese management team have annihilated the business through such poor management of the business and hiring the worst type of people.

    It has no credible corporate clients, a sub scale markets business and still spends money on all the wrong things. Its rent bill is probably more than its revenue. Numis has the same floor space in the building but does about £100m of revenue compared to the £5m that Haitong generates.

    Definitely worth the FCA looking at this shambolic business - especially with the Chinese angle.

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