Royal Bank of Scotland has made comprehensive cuts to the real estate and property-related securitization businesses in European corporate and investment banking, and it has included its newly purchased bank ABN Amro in the process.
The sharpest cuts were felt in the hard-hit securitization sector, where bond volumes have plummeted as investors shun the market, especially where there is real estate risk involved. Just as the securitization exit for real estate lending has evaporated, European real estate valuations have fallen especially in the UK.
"Like every other bank, RBS is making sure that we have the right-size teams for the current environment," an RBS spokesman said. He would not be drawn on the size of specific reductions.
We are family
The RBS securitization "family" as insiders call it comprises a real estate related group, a corporate risk group and one linked to financial institutions. The real estate group run by Damian Thompson lost approximately 23 out of 34 people, according to former members of the team. There were no reports of any job losses to the financial institutions and corporate securitization teams.
The same cannot be said for the wider real estate team at RBS, however. Stephen Eighteen and Doug Tiesi have let go about 20 of the 100-strong team. Eighteen is head of structured property finance and in the merged ABN/RBS entity will become head of credit market origination for Europe, and co-head of global real estate finance too, alongside Mark Finerman in the new organization. Tiesi runs European real estate finance. Tiesi was head of real estate finance at ABN a year ago but jumped ship briefly to Wachovia before moving to RBS.
It is a similar story over at ABN Amro, where smaller teams have been scaled back in a similar manner. According to insiders, the cuts were conducted on the basis of business as usual that is, without taking into consideration the imminent merger with bankers at RBS.
So an already small securitization group, headed by Nehal Farooqui, has been whittled down from six to just two. ABN Amros real estate team has also been massively reduced. The group which was based in London, Amsterdam and Frankfurt is being cut in two stages. The London team was hit first, it originally comprised about 30 officials but is now just one-sixth of its previous size. In addition, there were 11 officials who have continental European contracts and will undergo a slower process involving works councils.
Mike Nawas, a senior survivor
Debt structure unveiled
Meanwhile, internal announcements were made on the new management structure for ABN/RBS. Euan Hamilton, head of leveraged finance, has Eric Capp as global head of leveraged capital markets. Mark Hickey becomes global head of financial institutions debt capital markets and also head of European mortgages, financial institutions DCM and covered bonds. Corporate and structured debt capital markets, which is headed by Mike Nawas, has Richard Bartlett running Emea and Gareth Thomas in charge of Ceemea. Nawas is one of the few ABN Amro bankers to obtain such a senior role. Justin May, who was global head of DCM and ABS for the Netherlands bank, has gone.
Its a similar story in syndicate, where all the senior roles have gone to RBS bankers. Global head of syndicate David Bassetts deputy will be Matt Carter. Carter also becomes global head of financial institutions debt syndicate. Mark Dodd, head of corporate bond syndicate, and Rebecca Manuel, who runs European loan syndication, will jointly head corporate and structured debt syndicate. Yossi Kraemer, who ran ABS syndicate, is now head of real estate syndicate for EMEA and Asia Pacific.