Few redundancies expected from NZ brokerage merger

By NZPA

Monday 14th October 2002

Few redundancies are expected to result from a proposed merger of two New Zealand brokerages .

First NZ Securities and First NZ Capital, which both emerged from Credit Suisse First Boston, announced plans today to merge their operations.

First NZ Securities was formed in February by senior executives from the retail arm of CSFB, which internationally exited retail broking last year.

First NZ Capital was established in May after a management buyout when CSFB decided to exit New Zealand. It retained links with Credit Suisse to offer investment banking and institutional equities services.

The two firms had retained a solid relationship with each other and decided there were significant benefits merging under a common brand and ownership structure, First NZ Capital's chief executive Bill Trotter said.

There was no brand name yet and jobs were still being assessed but First NZ Securities chief executive Ross McEwan said there was little overlap between the two companies, which have about 106 staff between them.

Mr McEwan said the move was not really about industry rationalisation.

"This is really bringing back together a model that was in place very successfully for the last decade. But our view is, it puts us in the best shape for any rationalisation going on in the industry in the future."

None of the companies' offices in Wellington, Auckland and Nelson would be closed, Mr McEwan said. Formalities were expected to be completed by late November.

Credit Suisse's exit follows several departures or mergers including last week's announcement that Dorchester Pacific was to merge its Direct Broking business with DF Mainland.

Last year US investment banks JP Morgan and Merrill Lynch sold their retail broking arms in New Zealand, and German heavyweight Deutsche Bank moved its equities operation to Australia.

Dorchester managing director Brent King said in a statement that rationalisation was "critical to the future".

"It is clear that the broking industry is suffering from reduced volumes.

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