Ranjit Kripalani, managing director of Chase Securities' mortgage- backed securities operation, left the company this week amid reports that Chase has told employees it would drastically shrink the unit.

Reached at home, Mr. Kripalani declined to comment. He had been at Chase for nearly three years and is among several executives and traders said to have resigned. Sources said an internal announcement was circulated Monday that Chase plans to lay off 40 to 45 people, or about two-thirds of its mortgage-backed staff.

A spokesman for Chase Manhattan Corp. did not return calls.

"Chase is undergoing a change in how they allocate capital" among business lines, said Norman Jaffe, senior vice president of Fox-Pitt, Kelton Inc. "They've looked at the economics of the business and probably feel that the resources would be better used elsewhere."

Analysts attributed the cutbacks Chase plans and those at UBS Securities and Donaldson, Lufkin & Jenrette to a wave of mortgage refinancings since interest rates fell at yearend.

When loans are prepaid, interest and principal income that would have gone to holders of mortgage-backed securities is eliminated.

"The current rate environment presents increased difficulties and challenges in properly approaching the mortgage asset wisely," said Jeffrey A. Mayer, senior managing director at Bear, Stearns & Co. "The amount of sophistication you need in terms of personnel and technology makes it, for some, an obstacle to continue to be involved in the business."

Terry W. Griffith Jr., senior corporate fixed-income analyst at Technical Data Service, noted "substantial restructuring" throughout the taxable fixed-income market.

Securities Data Co. said Chase had 14 mortgage-backed issues last year, whose proceeds totaled nearly $2.9 billion. It was ranked 13th among mortgage-backed security managers, with a 1.4% market share.

Other market niches, such as asset-backed securities, have not undergone drastic staff cuts.

The asset-backed business has been "a strong market, and we anticipate it continuing," said Jac P. Andre, partner at Ray & Berndtson Inc., an executive search firm, who has seen continued demand for people in asset- backed operations.

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