Yet more losses are rumoured at Warburg Dillon Read, this time in the bank's European closed-end fund sales department. The team tracks, researches and makes markets in closed-end funds, has 40 dedicated analysts and salespeople, and is the biggest player in the market.
The team regularly brought in annual profits of £40 million ($68 million) with capital of just £100 million. Following parent SBC's merger with UBS, capital was increased to £400 million.
Profits for the first six months of this year were up, to about £40 million. But, caught out by the summer crisis, the team lost that, and a further £35 million, making effective losses of £75 million since July. Warburg has yet to take the losses, however, hoping that it will be saved by stock markets rebounding. Suddenly, though, the team's halo is not shining so brightly, and inevitably talk of job losses has begun to circulate.
Warburg declined to make a comment. Antony Currie