Barings to Resume Trading But Loses 11 Key Analysts : Securities: New owner pays $148 million in bonuses, but members of Tokyo office still quit.

From Reuters

Barings bank, saved from extinction by a Dutch takeover, will be up and running again within hours but the damage to its standing was underscored Tuesday by the defection of 11 key stock analysts.

Britain’s oldest merchant bank, brought to its knees by one young trader in Asia whose deals in derivatives markets went disastrously wrong, has been rescued by the aggressive Dutch banking group, ING.

Barings said late Monday, after the deal was approved by London’s High Court, that the administrators and ING hoped to see it resume trading “within 48 hours.”


A spokeswoman for Barings was sticking to that formula on Tuesday but declined to give an exact time for Barings re-entering the markets. “They don’t want to put a deadline and then have to miss it,” she said.

ING agreed to pump $1.09 billion into Barings to keep it afloat.

Crucially, it agreed to pay out bonuses totaling $148 million in an effort to retain Barings staff, seen as one of the bank’s main assets, but that was not enough to prevent the mass defection of a key research team.

British broker Smith New Court said it had recruited a team of 11 equity analysts from Barings’ Tokyo office, including highly rated analysts covering the chemicals, electronics and smaller companies sectors.

Although there were sighs of relief at Barings after the ING deal was announced, staff are still worried about their jobs and many have sounded out prospective new employers in the days since Barings collapsed.

The directors at the head of the bank may be worried too as the various investigations into the collapse pick up speed.

A week ago, the British authorities were talking of one “rogue trader,” Nicholas Leeson, bringing Barings down. But it has become clear controls within Barings were inadequate, and ING Chairman Aad Jacobs said Leeson may have had help from London.


Both the Bank of England (BoE) and Barings are declining comment while the investigations, by BoE’s banking supervision department and the Serious Fraud Office, continue.