DBS Vickers Securities - Restructuring or Retrenchment

'The equities trading business is critical to DBS and we have no plans to shut it down...exploring different models with a view to delivering a stronger customer proposition with minimal employee impact.' This is a quote from Business Times when DBS was asked about the rumour that it was closing down its equity business.

In the townhall meeting, DBS told the remisiers that they would not be doing equity business anymore and the Company would speak to everyone of them to try to fit them into another job in DBS according to their experience and qualifications subject to its policy on employing employees after retirement age and market practices.

The above two paragraphs when read superficially brought a little hope to the remisiers that all is not lost and maybe they could still be reemployed in some capacity in DBS. The devil is in the details, so they said and I would like to look into the statements and see how meaningful or how meaningless they are to the remisiers, told to look forward to a new journey. By the way, the person that crafted these clever replies would be highly sought after as a potential politician.

In the townhall meeting, DBS spokesman said DBS Vickers Securities would not be closed down. But all the remisiers will no longer be engaged in equity trading but redeployed into other areas if found suitable. The equity business would be taken over by the bank. This simply means that remisiers cannot trade in equities anymore despite their years of experience in this trade, ie made redundant.  And the business they built over several decades would be taken over by DBS.

There will be minimal impact on employees, remisiers are not. Most of the employees, ie support staff in equity trading are likely to be absorbed by the banks to continue what they were doing. The remisiers would be like a clean sheet of paper, newbies, as their wealth of experience would no longer be relevant as they would not be doing what they were doing in the last 20 or 30 years. What do you think they can do in DBS when their only experience is equity trading? Would there be comparable jobs that pay them the same as what they were as remisiers when they have no relevant experience? What would be the likely jobs for them, customer guides in the banking hall, security guards, cleaners?

Another critical factor is age. Remember, retirement age is 62 in DBS though MOM specifically said that this is only the Minimum Retirement Age. Many of the remisiers are in the 60s, 70s and even 80s. How many would be found useful enough to be offered reemployment in DBS and if found suitable, likely to be on a one year contract, maybe renewable. Without this restructuring, the remisiers are looking to a lifelong employment in equity trading as long as they could churn up enough business to justify their existence. Very likely the majority of those above 62 would face unemployment, unsuitable and too old to be working. Those in the late 50s or early 60s could see a similar fate as 62 is around the corner.

In reality, this restructuring exercise would see many remisiers being jobless, not only the oldies but also those below 60s, if they could not find a job that fit their experience and qualifications unless they are willing to take anything that DBS is offering.

There will be minimal impact on employees of DBS Vickers Securities but maximum impact on the pool of remisiers. This is a retrenchment exercise in a different guise. Many of the remisiers will join the statistics of the unemployed PMETs. DBS could look very generous by offering a one year contract to a few remisiers to show how caring DBS is as an employer, but for how long and what kind of jobs and what kind of remuneration?

Let me summarise. DBS is telling the remisiers that they cannot practise their trade and all their clients and business would be taken over by the bank. Period. Many remisiers would be made jobless and a few could be offered jobs that are not comparable to what they were doing and not paying what they were getting as remisiers. They too would lose their jobs in a matter of time.

See the small prints or what is in between the lines? With the GE around the corner, this could be an issue for the opposition to kick around and DBS would be on the lips of everyone.