Marine Joins Exodus from Municipals
Following the lead of some other major commercial banks, Marine Midland Banks Inc. is bowing out of the municipal bond business.
The unit of Hongkong and Shanghai Banking Corp., which only 3 1/2 years ago beefed up its municipal securities staff, said Monday it would close its Section 20 subsidiary, Marine Midland Capital Markets Corp., and cease municipal institutional sales, trading, and banking.
Seventeen professionals and support employees are to be laid off, and 13 other people in the division will be transferred to other sections of the bank.
Retaining Some Business
Marine Midland said it will, however, keep its hand in the business in other ways. In a statement, the bank said it wants to focus on financial advisory work through its subsidiary Public Financial Management and also bolster its letter of credit business.
In addition, the bank is moving its municipal retail sales force into its private clients group within the bank.
The bank's Section 20 subsidiary is yet another casualty of the beleaguered commercial banking industry in particular and the changed municipals industry. In May, Chase Manhattan Corp. closed its municipal securities operation, citing the results of a strategic review. And last year, Citicorp retreated from most of its municipal securities activities, deciding to focus on derivative products.
A Victim of the Times
"I would confirm it is a sad day. We have to move forward. It is unfortunate that our bank has to exit the business," said William N. Hudson Jr., a 24-year veteran of the bank and currently executive vice president of corporate finance and municipal securities.
Mr. Hudson commented, "I would say it is more of a reflection of the difficult times for commercial banks." He will remain with the bank and continue to oversee corporate finance, as well as the letter of credit business and financial advisory work.
The bank's municipal securities division was once a powerhouse.
The Bond Buyer is a sister publication of American Banker.