Schroders to assess private banking after axing jobs

Michael Dobson, the new chief executive of Schroders, yesterday removed a handful of UK jobs in the fund management group's private clients unit in his latest moves to turn the struggling company around.

It is thought that as many as 19 private bankers are leaving, including Mike Bussey, co-chief executive of the fund manager's private bank Schroder & Co.

Sally Tennant, appointed Schroder & Co's co-chief executive in March this year, will take full control of the unit. She joined Schroders with Mr Dobson in November when it bought Beaumont Capital Management, the boutique asset management group they founded.

The bank employs 380 people in the UK, Switzerland and Germany, although the latest round of redundancies is restricted to the UK. Among the departing staff are Rupert Caldecott, the head of the international business, and David Rowe, managing director of UK business.

"We are committed to growing the private bank. However, it is appropriate to adjust our costbase in the UK. Clients will not be affected," said a Schroders spokesman. "There is a new management team at Schroders and it is looking at all business areas."

Mr Bussey joined Schroders 13 months ago from HSBC, where he was head of its private banking business in Europe and the Middle East.

Schroders is not the first financial services group to scale back its offering to high net worth customers. Last week Merrill Lynch pulled the plug on its $1bn wealth management joint venture with HSBC, prompting its UK rival to take full control. Lloyds TSB has closed its wealth management arm Create.

Private banking, along with fund management, was to be Schroders' focus following the sale of its investment banking unit to Citigroup in 2000. The unit's net inflows fell 25 per cent to £300m during the second half of last year. About $6bn (£4bn) of Schroders' $200bn assets under management belong to its private, as opposed to institutional, clients.

In March Schroders warned of hefty job losses after it reported its first annual loss since it floated in 1959.