Jobs suffer in pounds 306m Intercapital-Garban deal

UP TO 600 jobs are expected to go following yesterday's pounds 306m merger between Intercapital and Garban, the moneybroking business spun out of Lord Hollick's United News & Media last year.

Michael Spencer, the chief executive of Intercapital who is the largest shareholder in the merged group, said yesterday that he expected cost savings of pounds 75m a year from the deal.

But he insisted cost-cutting was not the main goal in a merger driven by huge changes sweeping through the industry. "The combination of Garban and Intercapital is one that stands head and shareholders above the competition," he said.

The two firms are among the biggest brokers in over-the-counter bond and interest rate futures, which are among the fastest growing sectors of the wholesale financial services industry. Their clients come from among the big investment and universal banks who themselves are consolidating at a rapid rate. Intercapital and Garban, run by Charles Gregson, employ 3,200 worldwide and around a third are London-based. Mr Spencer, well known in the City as chairman of City Index, thefinancial bookmakers, said he believed job cuts could be achieved by hiring freezes and massive forced redundancies avoided.