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SCMP Reporter

The economic crisis claimed more victims yesterday, with Schroder Securities Asia's decision to close most of its Asian broking business and SocGen-Crosby's announcement of layoffs and salary cuts.

 Both firms are taking measures to cut operating costs in Asia's overbroked and rapidly shrinking equity markets.

 SocGen-Crosby 'recently let go a small number of staff, which amounted to a single-digit percentage of its global whole'.

 No numbers were given.

 Chief executive Jean Pierre Mustier said senior executives had agreed to salary cuts of between 10 and 20 per cent.

 At Schroders, 220 Asia-based employees were made redundant yesterday, predominantly equity sales, research, settlement and back office staff.

 A handful of equity capital markets staff, who help bring new stock listings to market, were also sacked.

 Just under a third were based in Hong Kong, the group's Asian headquarters, according to group financial markets managing director Mark Hopkinson.

 Schroders had relatively large operations in Indonesia and South Korea, two of the region's hardest hit markets.

 As expected, the Japan office, which has done well in recent years, was spared such cuts.

 After the restructuring, Schroders' Asia staff will number just over 1,000, which represents a small net reduction from the 1,078 employed at the beginning of 1997, London-based chairman Win Bischoff said.

 Outside of equity broking, Schroders' asset management, corporate finance and banking businesses have grown in the past year, explaining the small net reduction in numbers.

 The decision to streamline was a strategic move, unrelated to the present free-fall in regional markets, Mr Hopkinson said.

 After losing money in Asian securities broking for two years running, Schroders head office in London took the decision to focus on businesses where it has a 'critical edge' late last year.

 Those lines include corporate finance advisory activities, including mergers and acquisitions, which Mr Hopkinson said was the 'flavour of the future'.

 'Corporate finance and equity research will now be organised on the basis of chosen global, industry-based sectors where we have a critical edge,' he said.

 SocGen-Crosby and Schroders are not the first investment banks to bleed red ink from equity broking operations in Asia.

 Even before markets fell late last year, broking commissions were being squeezed as more and more players moved into the region.

 Peregrine's dramatic demise put nearly all its 1,700 remaining employees out of jobs.

 The firm had laid off hundreds late last year.

 Worldwide consolidation and divestiture in the banking industry have added to redundancies in Asia.

 BZW Asia laid off 75 employees on Monday after the firm agreed to be acquired in part by Credit Suisse First Boston.

 The merger of Union Bank of Switzerland and Swiss Bank Corp will bring another wave of redundancies in the weeks ahead.

 The firms expect to make an announcement next Monday and another on February 22.

 Natwest Securities, which is on the block, will begin shedding jobs as soon as it sells the rest of its Asian business.



Schroders, SocGen-Crosby sack Asia staff