Global custody staff at risk in Chase merger

Click to follow
The Independent Online
Back office operations in the City and global custody businesses in Bournemouth and Cardiff are most vulnerable to job losses in the merger between Chase Manattan and Chemical banks, it emerged yesterday.

Around 500 staff are expected to be axed in the UK because of the merger. Both banks said that about 12,000 jobs from a global combined headcount of 76,000 would have to go.

In the UK the banks have considerable overlap in syndicated loans and foreign exchange, as well as global custody, a lucrative business that involves transferring and safeguarding securities for multinationals.

The precise number of job losses for the UK is not yet known, a spokesman for Chase said yesterday: "It's something they haven't got a definite look at yet. There aren't any figures locally at this stage," said Chase's London spokesman, Julian Walker.

But, he added it would be wrong to extrapolate on a regional basis from the banks' own estimate that around 16 per cent of jobs would be cut globally. The banks together employ around 3,900 staff in Britain.

Meg Crack of the Banking Insurance and Finance Union said it was another sad day for the finance industry, which had lost tens of thousands of jobs over the past five years.

"There was great excitement in Bournemouth when Chase opened its huge glass building in the late 1980s," she said. "Now it looks as though staff will pay for the cost of another merger."

Chase has around 2,500 employees in Britain, including 950 in London, 1,500 at its global custody operation in Bournemouth, and a small number at a private bank. Mr Walker said annual job attrition rates were running at 15-20 per cent at Chase and Chemical, which both have sizeable foreign exchange operations in London.

Chemical Banking Corp has some 1,400 employees in the UK, of whom 1,200 work in London and around 200 in the Cardiff-based Geoserve global custody operation. A London spokesman said he could not comment on the impact of the merger on jobs in the UK.

Reuters' share price was hit by the merger news, falling 11p to 577p yesterday as the market anticipated a lower demand for financial news screens.

Analsyts doubted whether similar mergers would happen among UK banks. "In terms of rationalisation this must continue, but I think in the UK that will happen at the bottom end of the market, which is the building societies," said Societe Generale Strauss Turnbull analyst, John De La Hay.

Comment, page 17