Currencies

Dollar rises as markets turn eyes to Opec

European bourses are mirroring a tentative Asia session as the dollar continues to be supported by better US economic data and investors turn their attention to a meeting between Opec members. Sentiment is underpinned by US index futures suggesting the S&P 500 will gain 3 points to 2,207.3 when trading gets under way later in […]

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Banks

Basel Committe fail to sign off on latest bank reform measures

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Banks, Financial

Banking app targets millennials who want help budgeting

Graduate debt, rent and high living costs have made it hard for millennials to save for a house, a pension or even a holiday. For Ollie Purdue, a 23-year-old law graduate, this was reason enough to launch Loot, a banking app targeted at tech-dependent 20-somethings who want help to manage their money and avoid falling […]

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Economy

Eurozone inflation climbs to highest since April 2014

A welcome dose of good news before next week’s big European Central Bank meeting. Year on year inflation in the eurozone has climbed to its best rate since April 2014 this month, accelerating to 0.6 per cent from 0.5 per cent on the back of the rising cost of services and the fading effect of […]

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Financial

Wealth manager Brewin Dolphin hit by restructuring costs

Profits at wealth manager Brewin Dolphin were hit by restructuring costs as the company continued to shift its focus towards portfolio management. The FTSE 250 company reported pre-tax profits of £50.1m in the year to September 30, down 17.9 per cent from £61m the previous year. Finance director Andrew Westenberger said its 2015 figure was […]

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Categorized | Capital Markets

Moody’s trims staff to contain expenses


Posted on September 28, 2016

Moody's rating agency downgrades 15 international banks...epa03276338 (FILE) A file picture dated 13 July 2011 shows the Moody's logo outside the offices of Moody's Corporation in New York, New York, USA. The rating agency Moody's late 21 June 2012 downgraded 15 large banks and securities firms with international reach, including Deutsche Bank, citing the escalating turmoil in capital markets. The list includes Barclays, Citigroup, Credit Suisse Group AG, HSBC Holdings, Morgan Stanley, Royal Bank of Scotland Group, BNP Paribas, Credit Agricole, Royal Bank of Canada, Societe Generale and UBS AG, according to a statement on Moody's website. EPA/ANDREW GOMBERT

Moody’s was one of three rating agencies to turn down Gramercy’s offer to pay for ratings on long-defaulted debt

Moody’s has axed 30 staff across its business as the rating agency seeks to contain costs after a challenging start to the year, according to people briefed on the situation.

The job cuts are concentrated among analysts but include some staff from other areas of the company.

    Moody’s, which issues ratings and research across a range of bonds and other securities, struggled at the start of the year, after widespread market turmoil curtailed the issuance of bonds and structured products, cutting the company’s income from rating new transactions.

    The pace of new deals has picked up in recent months but Moody’s executives highlighted concerns over political risks, including the US presidential election, at an investor conference on Wednesday, at which they also discussed plans to rein in expenses.

    Some cost savings would come from using employees in lower-cost locations such as India, Sri Lanka, China and Costa Rica, said Linda Huber, Moody’s chief financial officer, according to a Bloomberg transcript of the event.

    “We haven’t liked the way the revenues have come in . . . we realised we have to work on expenses because we’ve had a tougher time with revenue,” she said.

    First-quarter revenue missed analysts’ estimates by $37m, coming in at $816m. Revenues recovered in the second quarter, beating estimates by $25m at $929m, according to Bloomberg data. The company’s share price is up 9 per cent for the year but fell 0.4 per cent on Wednesday despite it raising its full-year earnings outlook at the investor conference.

    “Increased issuance activity combined with a greater impact from our cost savings initiatives has resulted in a modestly improved outlook,” said Raymond McDaniel, Moody’s chief executive, in a statement.

    The move to axe analysts in an effort to cut costs is unusual for the company, which rarely engages in large-scale firings, according to the people. Moody’s has about 1,600 analysts in total, according to regulatory filings.

    Moody’s is separately under investigation by the Department of Justice for allegedly inflating credit ratings on mortgage bonds that were at the centre of the 2008 financial crisis. Rival rating agency S&P Global Ratings, has already settled over similar allegations, paying out $1.5bn.

    John Goggins, general counsel at Moody’s, was asked about the investigation at Wednesday’s investor conference. He said it was not appropriate to comment on the ongoing investigation but Moody’s would make appropriate disclosures in the event of material developments in any litigation matter.

    Moody’s declined to comment on the job cuts.