Mexican crisis hits Trio

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The Independent Online
JAMES BETHELL

The collapse of international money flows has hit profits and staff bonuses at Trio Holding, the parent of Martin Bierbaum money brokers.

David Hagan, chairman, yesterday announced an aggressive cost-cutting strategy that will see the closure of trading desks in London, Hong Kong and Tokyo.

The company blamed the collapse of global trading volumes on the Mexican debt crisis in January and volatility on the international foreign exchange market. These market conditions frightened the international banks and securities houses that use Trio's brokers to trade in the spot, swap and foreign markets.

The situation was exacerbated by the introduction of new electronic trading systems that undercut Trio's operations.

The problems led to losses of pounds 3.2m in the six months to March against profits of pounds 1.4m in the same period previously.

Mr Hagan said Trio had slashed costs by reducing staff numbers and bonuses. It had also entered higher-margin business such as interest rate swaps and forward rate agreements.

The results raised speculation in the market that Trio, which retains pounds 10.5m of cash in the bank, was too small to survive as an independent player in such a highly cyclical market.

"They had better start making profits soon or they are going to run out of capital," said Chris Smith, financial analyst at James Capel.

Trio, a neglected investment trust, bought Martin Bierbaum for pounds 25.5m in January 1993.

In January this year it raised pounds 6.5m through a rights issue underwritten by a 5,000-strong tribe of Eskimos from north-west Canada.

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