The move appears to come ahead of further senior management appointments within Merrill Lynch as it is taken over by Bank of America later this year.
Earlier this week, Merrill announced a reshuffling of the heads of its markets division, and now, the other arm of its business û investment banking û is set to be restructured. Sources say that Chunilal, a 19-year veteran of the firm who reported to Jason Brand, president of the region, did not make the cut to become the new head of the IB division in this region and so he is leaving the bank.
Chunilal declined to speak to FinanceAsia on Tuesday for this story. Rob Stewart, a Merrill Lynch spokesman confirmed ChunilalÆs departure but declined to comment further. A Bank of America spokesperson said: ôBank of America and Merrill Lynch are still two separate companies until the transaction is closed so this is really a question for Merrill.ö
Some sources say that Chunilal had been viewed as the administrative man, the person who made strategic decisions about who to hire and how to build the firm up and yes, what investments to make, but he may not have been perceived by managers in New York as a relationship man û the person who could be counted on to bring in new business. And many people are speculating that investment banking will return to the days when business was won on the strength of relationships as few investment banks have the ability anymore to aggressively lend balance sheet to help them win mandates.
Indeed, others suggest that this is a sign of how Merrill may pursue business in the future. Under the Chunilal/Sheldon Trainor days much of the IB business involved highly structured deals which put capital to work, and while Bank of America certainly can bring its balance sheet to the table, it may choose to be conservative in how it is used û especially since aggressive investing and high leverage are seen as the main causes of the subprime crisis. (Sheldon Trainor gave up his position as head of Asia investment banking at Merrill Lynch in early September to focus on originating deals and managing client relationships under a new title of vice-chairman in investment banking.)
The timing of ChunilalÆs departure û in early November û is of course telling. It means not only is Chunilal likely cut out of the bonus pool, but he is also out of the decision-making process of who else in the firm should receive one.
Who will take over as the new head of investment banking remains unclear but sources say the announcement is imminent.
Earlier this week, Merrill Lynch and Bank of America announced that global equities will be led by co-heads Mike Stewart and Tom Patrick, both from Merrill, while global credit products will be led by Gerhard Seebacher from Bank of America. Yasuhiro Fujiwara and Michael Halloran will co-run Asia and Pacific markets.
As COO of Merrill Lynch Pacific Rim, Chunilal was responsible for developing and implementing operating plans across all of the region's businesses, with particular emphasis on strategic planning and execution; governance and controls; and infrastructure efficiency, all according to his profile on the Merrill Lynch website. And he clearly had a strategy. In the past year he often commented on how he did not go out and hire willy-nilly during the bull years, but rather had been more selective.
As markets began to get shaky he continued to cherry pick talent. For example, a week after JapanÆs leading independent investment bank, Nomura, confirmed it had agreed to acquire Lehman BrothersÆ operations in Asia-Pacific and Europe, Merrill Lynch swooped in and snapped up a team of Lehman BrothersÆ bankers. Other hires in the past nine months include Terence Keyes from Morgan Stanley as head of corporate finance Asia, Dan Newman from Reliance Communications as head of telecoms in the Asia-Pacific region, and Greg Fournier, a transfer from Merrill Lynch Canada, to boost the metals and mining business. And so, while itÆs not clear in what new direction the combined Merrill Lynch/Bank of America team may want to take its Asia business, Chunilal had already been building a new franchise.
Some bankers speculate that ChunilalÆs departure is perhaps just the tip of the iceberg for Asia. In August Robert Morse resigned as CEO of CitiÆs Asia-Pacific institutional clients group. Citi had started its global restructuring effort and brought in Ajay Banga as the man to lead the Asia changes. Now Chunilal has left Merrill Lynch as it begins its restructuring.
ôIn the next six months, I think you can expect a whole generation of banking heads in Asia-Pacific getting changed,ö says one banker, noting that the further the market constricts the more likely it is that senior bankers in New York, with little to do in their home markets, may move out here to take on senior roles.
¬ Haymarket Media Limited. All rights reserved.
