Australia’s Macquarie Group will nearly halve its investment banking staff across Asia amid a slowdown in deal making in the region.
Between 80 to 90 employees in its investment banking unit will lose their jobs across Hong Kong, Singapore, Korea, India and Japan with immediate effect as the bank looks to pull out of less profitable areas of the business, according to a source close to the situation. No offices will shut as a result of the job cuts.
A company spokeswoman declined to comment.
Jeremy Wernert, who was head of Macquarie Capital, the firm’s investment bank in Asia, is among those leaving the firm. He will relocate from Hong Kong, where he worked for over two years, back to Melbourne.
The Australian bank continues to operate other businesses in Asia, including asset management, trading and lending. These are areas that the bank’s chief executive Nicholas Moore has been shifting towards, as they are viewed as more stable sources of revenue, according to media reports.
Macquarie’s cuts come amid tepid investment banking revenues in Asia Pacific as equity capital market deal-flow slows. Investment banking revenues total $2 billion so far this year up to March 31, compared with $2.57 billion for the same prior year period, according to Dealogic. Notably, revenues are at their lowest levels since 2009, when they totalled $1 billion.
Macquarie ranked 6th in the league tables in 2008, but has been on a downward spiral since. It came in 12th last year, and in the first three months of the year, ranks 22nd, according to Dealogic.
In addition to lower investment banking revenues, banks are continuing to struggle with a higher cost of capital and greater regulation.
Many banks are in the midst of right-sizing their headcount in Asia after overbuilding in 2010. In January, Standard Chartered shut its loss-making global equities business, while CLSA cut more than 20 people in its equities unit. Meanwhile the Royal Bank of Scotland is pulling back from corporate banking in Asia and in February CIMB Group made 40 people redundant in Asia, mostly in its equities trading unit.
Goldman Sachs has also trimmed headcount in Singapore. Recent senior departures include Ruben Bhagobati, the US bank’s head of mergers and acquisitions in Southeast Asia; Antoine Izard, its managing director of investment banking in Singapore; and Hsin Yue Yong, head of investment banking for Southeast Asia. In total, Goldman shed just under 17 executives out of Singapore, although the US bank still has a headcount of 800 in the Lion City.
