Barings faces mass defections in equities

ING Barings, the merchant bank rescued after its collapse at the hands of rogue trader Nick Leeson, is facing the prospect of mass defections from its specialist equities teams following the recent recruitment of more than 50 staff by its rival Deutsche Morgan Grenfell.

The bank is already suing its German rival in New York, after it poached a key member of staff there, encouraging a wave of departures.

At least 25 more Barings employees, members of its Asian desk in London, are now thought to be vulnerable to six and seven-figure salaries now on offer if they sign up with one of their unnamed rivals.

Barings' problems come in the wake of a rapid ratcheting up of City salaries in the past year, leading to poaching on a massive scale as many major banks move to position themselves within the international market place.

The latest threatened defections follow the departure of Andrew Fraser, former head of Barings' Asia team, who has left to join Standard Chartered Securities.

Mr Fraser, who is banned from approaching staff under the terms of his departure, is believed to have been joined by Andrew Clark, another Barings sales trader.

Several of the Asian team in London are already thought to have been approached by at least one major bank. Barings yesterday would not comment on whether approaches had been made and what the outcome was.

A bank source said that in current conditions, with poachers circling ING Barings, it was not surprising that members of staff were being contacted.

"It is bloody irritating to have people picked off like that," he said. "When we identify those whom we regard as key, we make a point of talking to them to ask if they have been approached. We look at them in the eye and ask them to tell us that they are staying."

Although it was not possible for Barings to match the huge double or triple-salary increases that some are being offered by some banks, potential defectors were being given an indication of the "generous" bonuses they might expect next year.

Some staff who did not necessarily want to leave were being placed in an impossible position because everyone around them was going and they felt their team would be disbanded, the source added.