Japanese bank jettisons expensive credit salespeople globally

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MUFG redundancies

This time it's not Nomura. Nor is it Mizuho. Insiders at MUFG say the Japanese bank has been busy pruning sales and trading headcount. Around 10 credit sales people are understood to have gone in New York, London and Singapore.

The layoffs appear to have been focused on senior staff. In New York, Thomas Daly, David Nixon, John Cahil and Tim Cavanaugh all left the Japanese bank on October 23rd according to their FINRA records. Daly had been with MUFG for five years after starting his career with Salomon Brothers in 1993. Nixon had been with the bank four years after starting his career with Morgan Stanley in 1987. Cahil had been there eight years after starting at Shearson in 1983. And Cavanaugh had been there seven years after beginning his career in 1997. It looks a lot like a clearing of the senior ranks.

In London, where MUFG Securities employs around 600 people, the bank is understood to have parted company with a salesperson who joined four years ago, and with Nicholas Wright, a director in credit sales who joined from SocGen in 2015.

MUFG is also understood to have let go of a VP and a director in fixed income sales in Singapore. The bank said: '‎"We constantly review our business model to ensure we provide clients with the best products and services that they would expect from a global financial group such as MUFG. This deliberate approach enables us to remain relevant to clients and respond flexibly to changes in market conditions.”

The cuts come after rival Japanese bank Nomura cut 50 people across fixed income trading in July. Nomura has since started rehiring, but with a focus on structured instead of flow products. 

MUFG plans to move "a few dozen" jobs from London to Amsterdam and Paris as a result of Brexit, although it's not clear whether this has begun happening yet. The Japanese bank hired 180 people in EMEA between April and November 2017 as part of its move to become a "global fixed income powerhouse." Recent layoffs could be construed as a minor retrenchment.

Most banks (UBS, Barclays and Citi excepted) experienced a slowdown in fixed income trading revenues in the third quarter, meaning there may be more redundancies to come. It doesn't help that fixed income trading is increasingly taking place electronically and that most banks are focused on finding a new breed of electronic sales trader who can sell electronic trading capabilities rather talking to clients about individual trade ideas.

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