DBRS retreats from Europe

Dominion Bond Rating Service (DBRS) has closed its European offices in London, Paris and Frankfurt as a result of deteriorating revenues in the wake of the credit crisis.

The move means 43 of the rating agency's staff have been made redundant: two are in the Frankfurt office and the rest are spread over the London and Paris operations.

DBRS set up a European financial institutions group in 2005, but made a big push into structured credit in 2006, setting up the Europe, Middle East and Africa structured finance group under Apea Koranteng, who was hired from ABN Amro.

The agency made a splash by poaching analysts from other agencies, including a team of four quantitative analysts from Standard & Poor's in June 2006. That team was headed by Kai Gilkes, who joined as a managing director to expand its CDO rating methodology, called the CDO toolbox.

DBRS has also cut its US staff from 270 to 200, but Caroline Creighton, a vice-president in press relations at DBRS in Toronto, pointed out that most of these were US-based back-office and support staff for the European operations.

Creighton also stressed European business will still be covered by American analysts and that DBRS would be looking at reopening the offices when conditions improve.

Moody's Investors Service also announced a projected 275 jobs, 8% of its workforce, were to be cut from its operations. And McGraw-Hill, the parent company of Standard & Poor's, announced layoffs for 3% of its workforce this week, blaming the effect of the market turmoil on the rating agency.

See also: DBRS strengthens EMEA structured finance group