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By Guillermo Parra-Bernal and Tatiana Bautzer
SAO PAULO, Jan 28 (Reuters) - Grupo BTG Pactual SA cut about 18 percent of Brazil-based staff on Thursday as the embattled investment-banking firm moved to reduce costs by 25 percent in the wake of the arrest of billionaire founder André Esteves.
In a securities filing, BTG Pactual said the dismissal of 305 employees based in São Paulo, Rio de Janeiro and other Brazilian cities will not disrupt or lead to the closure of any business area. The bank had 1,653 staff in Brazil.
On Wednesday, Reuters reported that up to 25 percent of Brazil employees could be fired to bring payroll in line with BTG Pactual’s shrunken balance sheet and business flow since Esteves’ Nov. 25 detention. Some employees had been informed of their dismissals earlier in the week, according to a source familiar with the matter.
Esteves, also the bank’s former chief executive officer, was arrested and accused of obstructing a sweeping corruption probe. He was freed late in December under certain restrictions. The situation led Latin America’s No. 1 independent investment bank to begin selling assets and dismantling trading operations.
Total assets slid 12 percent to 266.6 billion reais ($67 billion) last quarter, from 303 billion reais in the prior three months. Several assets, including pools of loans and stakes in dozens of companies, were put up for sale to help balance the books.
BTG Pactual, excluding Switzerland-based private banking unit BSI Group Ltd, had about 3,300 employees worldwide in December.
The cuts hit all areas, including core activities such as investment banking, sales and trading and money management, two sources with direct knowledge of the situation said on Thursday.
“No business line was or will be deactivated, and the bank will continue to cater to clients with the same dedication, excellence and service quality,” the filing said.
One of those two sources said some U.S.-based employees in the debt capital markets division were also fired. The source said these included Hugo Souza, Cristiano Leão, as well as Antonio Filpo, who in recent months joined BTG Pactual from Banco Safra SA to head a Miami-based private-banking unit that opened in April.
Efforts to contact Souza, Leão and Filpo were unsuccessful. BTG Pactual did not comment beyond the filing.
Six associate partners, or bankers who each own less than a 0.22 percent stake in BTG Pactual, were also to be fired. The bank will waive a right to exercise a call option on the stock of the dismissed partners, which will avoid imposing heavy losses upon them, the first source told Reuters.
Units, a blend of voting and non-voting shares in BTG Pactual’s investment banking and private-equity divisions, have shed about 40 percent since the arrest of Esteves, and are currently trading at about 0.7 times book value.
The stock closed almost flat on Thursday at 16.64 reais.
$1 = 4.0764 Brazilian reais Editing by David Gregorio