Chemical Banking Corp. and Manufacturers Hanover Corp. yesterday laid off 12 municipal securities professionals and 18 other executives from their soon-to-be melded securities subsidiaries, spokespeople for both banks confirmed yesterday.
The banks are pursuing an ongoing restructuring as part of the merger they announced on July 15. They are expected to cut 6,200 employees from their combined 43,000 bank employees, with about 1,000 let go so far, the spokespeople said.
On the Chemical side, none of its 14 municipal bond professionals were affected, but three bankers and a clerk were let go from its 18 member public finance department, sources said. Some of those released yesterday had accepted severance packages.
At Manufacturers Hanover, two of the firm's 12 public finance bankers and one clerk were let go, while its municipal bond department was hit the hardest, losing seven of its nine professionals, sources said.
The rest of the layoffs from the securities subsidiaries covered other areas, including asset- and mortgage-backed securities, the spokespeople said.
A spokeswoman for Chemical said the merged banks will have about 50 professionals in the municipal securities department working in a new Section 20 subsidiary, which will continue to carry the Chemical Securities Inc. brand. The merger between the two banks is expected to be completed after Dec. 31.
Clarence Otis, who has served as vice president and manager of public finance for Chemical Securities, will head up public finance, according to a spokeswoman for Chemical Banking. In addition, William Jester of Chemical Securities was named to oversee municipal underwriting, trading, and sales. Loren D. Carlson, a managing director and head of Manufacturers Hanover's public finance department, will manage new business and report to Mr. Otis.
Mr. Otis and Mr. Jester will report to Thomas Becker, a managing director with Chemical Securities, who will now be responsible for all fixed-income and money market dealings, except government securities, the Chemical Banking spokeswoman said.
William Pike, who headed the government desk at Manufacturers Hanover, will oversee government securities in the new subsidiary, the spokeswoman said.
David Green, the head of Chemical's government bond department, is expected to resign effective January, sources said. The Chemical spokeswoman declined to comment.
Market sources said there could be big cuts in the government securities department at Chemical and the cuts could be announced on Monday.
Also yesterday, the New York State Banking Board said it approved the merger of Manufacturers Hanover into Chemical Banking. "Because Chemical and Manufactures serve similar markets, the merger provides a unique opportunity for the combined institution to achieve significant and continuing savings as well as to attract new equity capital," said the state superintendent of banks, Derrick Cephas, in a statement.
To date in 1991, Chemical was ranked 25 as a senior manager of long-term municipal bonds, with 55 issues totaling $1.19 billion, according to Securities Data Co./Bond Buyer. Manufacturers Hanover Securities was ranked 31, with 25 issues totaling $852 million.