Half of Bankgesellschaft Berlin's 10-strong London-based credit derivatives team has resigned over the last two months, reportedly because of uncertainty about the firm's ownership. The State of Berlin is expected to decide whether to sell its 81% stake by January, according to officials in Berlin. Frank Boenke, general manager in London, and Reinhard Fröhlich, a BGB spokesman in Berlin, did not return calls.
"The whole bank is concerned about what is going on and even more so [for those] in London," said a credit derivatives official. While departures have hit other departments, such as the asset-backed group, most of these have also been in London because "there is nowhere to go in Berlin." In the latest blow to BGB, Richard Gillingham, head of credit derivatives in London, and a trio of colleagues, have jumped ship to Scotia Capital. Gillingham, who will run the team and started last week, declined to comment on the situation at BGB. The three other team members, Frank Ackermann, Howard Lacy and David Phillips, also declined comment.
"The Bankgesellschaft name was the biggest obstacle when doing business," said a credit derivatives marketer. "Would you like to deal with a bank that might not be around in five years?" However, given the summer lull and the market downturn since the Sept. 11 terrorist attacks, he was unable to say categorically that business was solely and directly affected by these concerns.
Two credit derivative traders at rival firms said they would either not trade with BGB or would demand collateral because of the pending sale.