SBC-Warburg transformed in six weeks

Pushing ahead at break-neck speed, Swiss Bank Corporation has virtually completed its integration of Warburg within six weeks of the launch of the new investment banking operation. It is still on course for cuts of about 1,000 jobs globally, most of which have already fallen in the City.

But the number of losses at Warburg is far higher, with several hundred quitting for other banks. Despite the pounds 60m loyalty bonus fund set up to bind in key staff, a series of senior-level departures continues to expose the inevitable tensions in the shock-treatment integration strategy adopted by Marcel Ospel, the new chief executive of SBC Warburg.

Despite a good flow of new business - SBC is advising Fisons in its defence against Rhone-Poulenc, the French chemicals giant - morale according to insiders remains fragile, and the strains of trying to bolt together the very different cultures of SBC and Warburg are beginning to tell. "We are all wondering whether you can do the old business in a new way," says one senior Warburg corporate financier. "The Warburg organisation was inflated and needed the sort of pruning now going on. But how much of the culture in a place renowned for its internal culture is also being thrown out?"

Inside the favoured sandwich bars near SBC Warburg's Finsbury Avenue headquarters, newly integrated teams still divide instinctively along them-and-us lines.

"SBC people think we are stuck-up. And frankly, many of us find they sail very close to the wind. The style here is changing quite dramatically," says another Warburger of some years' standing.

This has been an unusually active summer for personnel coming and going. The source for much of it has been Warburgs. James Capel, the broking house owned by HSBC, which in better times would scarcely have warranted a glance from Warburg executives, has been buried in an avalanche of CVs. But the biggest pull has been Deutsche Morgan Grenfell, which has pillaged Warburg's top ranks to spearhead its own international equities force.

In the process, Warburg has lost the heart of its European equities team to Deutsche Morgan Grenfell, which has taken about 60 people in all.

In an ironic re-run of City history, it is the second time this European equity team, comprising David Haysey and Joe Hall among its principals, has deserted an approaching SBC. At Big Bang, this team had sought refuge at Warburg when its firm, Savory Milln was bought up by SBC.

The very close relationships between equity capital markets, sales and research, covering the four top defectors now at Deutsche Morgan Grenfell - Maurice Thompson, Michael Cohrs, David Haysey and Miko Giedroyc - continue to exert a powerful pull on SBC Warburg people. One of the latest losses was the Golob brothers, Warburg's top telecoms team.