VTB Capital, Russia's second-largest lender, should fire 40 percent of its work force at its overseas investment banking unit and drop more than two-thirds of its clients due to soaring costs, according to the division's head.
Atanas Bostandjiev said in a Nov. 15 memo to Yuri Soloviev, the deputy chief executive officer of VTB Capital International's parent VTB Group, that with costs rising to 95 percent of revenue, the unit has missed its profitability targets for the past five years, Bloomberg News reports.
Bostandjiev reportedly proposed closing the equity derivatives, commodities and structured credit trading groups, slashing the client list to 300 from approximately 1,000 and getting rid of 231 out of 556 jobs.
"We need to immediately address and pro-actively take steps to reposition, restructure and refocus the business in order to deliver sustainable and attractive economic returns," Bostandjiev, who was hired from Goldman Sachs Group Inc. two years ago to run the unit, said, according to Bloomberg News
VTB Capital is struggling to win business in Europe, with the region’s sovereign debt crisis dampening growth and hitting revenue.
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