The high-profile departures from Merrill Lynch in Asia continue, with sources saying yesterday that Jon Pratt, head of debt capital markets for Asia excluding Japan and Australia, and Rahul Malhotra, who was overseeing all of Merrill’s private bankers in the region, have both left the firm.
But while Pratt is yet another victim of the downsizing efforts underway following Bank of America’s takeover of Merrill Lynch, sources say Malhotra resigned on his own account last week. He is currently on gardening leave and one source says he has a new job lined up.
Malhotra, who was a managing director, had been with Citi for more than 20 years when he joined Merrill in September 2006. At the time he left Citi he was head of the firm’s retail banking business in Asia-Pacific. His first role at Merrill was as head of the global private client (GPC) group in India. He was promoted to his most recent job, head of GPC for Asia-Pacific ex-Japan, in August 2007.
There was no information available on where Malhotra will resurface, but one source says he will continue to be based in Singapore.
Although Malhotra spent only slightly more than two years at Merrill, people close to the firm say this was enough time to make a difference – not least with regard to the fast-growing private banking business in India – and his departure will likely come as a bit of a blow for Bank of America. It wasn’t clear yesterday whether the merged BoA-Merrill entity will appoint someone new to oversee the region’s private bankers. Merrill Lynch declined to comment.
Meanwhile, Jon Pratt, also a managing director, has become the latest among a string of senior bankers and analysts who have been let go from Merrill over the past couple of months as part of efforts by BoA to remove the overlap created by the merger and also to adjust staff levels to the sharp downturn in business activity as a result of the financial crisis. Given the decline in G3 debt issuance in Asia over the past year, it is no surprise that the DCM department is a target for such cuts. Merrill was also quite top-heavy within DCM origination following the appointment in late December of Rick Stoddard as head of DCM for Asia-Pacific (including Japan and Australia). Reflecting the high level of bond issuance activity out of Korea (before the financial crisis at least), Merrill also has a head of North Asia DCM in the form of Mike Joo.
It may surprise people in the industry that it is Pratt who has been asked to leave, however. Merrill poached Pratt from Credit Suisse in September 2006 in what was viewed as quite a coup for the US investment bank. Pratt had joined Credit Suisse in April 2000, and at the time of his departure, he was head of DCM for non-Japan Asia and had accumulated vast experience across investment grade, sovereign and high-yield products. He is likely to be forever remembered for having helped to arrange Vietnam’s first international bond in 2005, a deal which took the better part of five years to bring to market.
In 2008, Merrill finished fourth in the overall G3 bond league table ranking for Asia ex-Japan and second with regard to investment grade issuance. This was a significant improvement from 2006 when the bank ranked 10th on overall issuance and seventh on investment grade bonds.
BoA-Merrill’s efforts in debt origination will now be led by Rick Stoddard. A veteran banker who ran Merrill’s DCM business in Asia seven to eight years ago. He returned to Asia in early 2008 after a stint in New York. His initial job upon his return was to head up the firm’s leveraged finance business in Asia-Pacific. But when leveraged finance as a product virtually died during the course of last year, as a result of tight credit conditions, his role was changed to head of DCM for Asia-Pacific.
BoA announced in December that it plans to reduce the headcount at the merged entity by 30,000 to 35,000 over the next three years. At the time, Merrill had about 60,000 employees globally, of which 4,000 were based in Asia and another 1,500 in Japan. Bank of America had about 210,000 people on its payroll.
The layoffs started in earnest after the BoA takeover took effect on January 1, but is expected to be carried out in several stages. The most senior person to be let go in Asia is Jason Brand, Merrill's Asia-Pacific president. In addition, a number of senior bankers have also left Merrill globally before the completion of the merger. Among them are: Damian Chunilal, Merrill's chief operating officer for the Pacific Rim and head of Pacific Rim investment banking; Greg Fleming, who was to become head of corporate and investment banking globally on January 1; and Bob McCann, Merrill's brokerage head in the US.
Last week it emerged that Sheldon Trainor, Merrill’s vice-chairman in investment banking for Asia excluding Japan and Australia, is also leaving the firm to set up his own private equity business. However, Trainor will continue to work as a paid adviser to BoA.
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