Warburg 'set for more defections'

JOHN WILLCOCK

A clash of cultures in SBC Warburg's corporate finance department between the traditional Warburgers and their new SBC colleagues will lead to more defections, insiders predicted yesterday.

On Thursday two long-time directors of corporate finance left to join other banks, on the back of a number of recent departures, prompting renewed concerns about plummeting morale in the department that not long ago was the envy of the City.

Bonuses for 1995 have recently been announced and will be paid on 15 March. Analysts say this will swell the flow.

Tensions have been simmering since Marcel Ospel, the Swiss chief executive, took a tight rein on the department last autumn. Some insiders are saying that Warburg's traditional concentration on giving advice to clients has been sacrificed by the SBC side, who are geared to selling products.

One insider last night described SBC's corporate finance star, Brian Keelan, as "a culture clash for almost anyone".

Another accused the former McKinsey consultant brought in by SBC to run the corporate finance division, George Feiger, of having limited experience of the area.

The source said that Mr Feiger had reached his position by being a consultant rather than by doing transactions.

"He sees investment banking as dividing everything up into sectoral boxes and pushing all the firm's products through them, whether they are suitable or not. It's not what the clients want," claimed the source.

The same critic stressed that in another key area, equities, the combination of Warburg's and SBC's businesses had been a resounding success.

"More money has been pumped into the business, and the analysts and traders are doing pretty well," he said. SBC Warburg's analysts consistently topped the league tables for 1995.

SBC Warburg itself has refused to be drawn on whether there are problems in the corproate finance department, but sources inside the bank describe it as nonsense.

There has just been the usual flow of people in and out, according to the bank.

On Thursday Nicholas Fry, a senior director in corporate finance who had been with the bank for 20 years, left to head NatWest Markets' UK corporate finance division. On the same day Stella Coulthurst, a director of corporate finance who joined 10 years ago left to join BZW, recruited by Mark Seligman, another recent SBC Warburg defector.

One observer noted that such a diaspora of senior figues was doubly damaging, in that they would now be well placed to recruit more people from SBC Warburg.

There are also growing rumours of important client losses, another reflection of the tensions within the corporate finance team. Others to have gone recently include Derek Higgs, to head the Prudential's investment arm.