Canada recruiter sees more investment banking cuts

Fri Jun 27, 2008 1:05pm EDT
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By Lynne Olver

TORONTO (Reuters) - There are more investment and corporate banking layoffs to come at Canadian bank-owned dealers and boutique firms, a recruiter predicted on Friday, as credit markets in particular suffer from lackluster demand.

"I don't think we're done," said Bill Vlaad, a Toronto-based recruiter who specializes in the financial services sector.

A newspaper reported on Friday that Bank of Montreal is laying off about 150 people in its capital markets unit, or roughly 6 percent of staff.

Bank of Montreal spokesman Ralph Marranca would not confirm those numbers, but said there have been reductions in some debt and financial products, as well as in investment and corporate banking.

It's normal to cut back in businesses where market conditions are soft, but the capital markets unit is investing in other areas, Marranca said, citing its U.S. municipal bond business as an example.

In late May, CIBC World Markets said it cut 100 administrative and management jobs, on top of earlier cuts when it shut down its European leveraged finance and structured credit businesses.

The credit crunch has taken the heaviest toll on CIBC World Markets, owned by Canadian Imperial Bank of Commerce. Its pre-tax writedowns for various asset-backed securities and credit protection have amounted to almost C$6 billion in the past two quarters.

Canadian financial markets may be less volatile than those in the United States, but they are by no means insulated, Vlaad said.   Continued...