Six Wachovia analysts leave, 90 companies dropped
4 Feb 2009, 0406 hrs IST, REUTERS

NEW YORK: Six equity research analysts have left Wachovia Capital Markets, resulting in the suspension of coverage of at least 90 consumer, financial, insurance and packaging companies.

Wachovia announced the departures in a report distributed on Tuesday, just a month after Wachovia Corp was acquired by San Francisco-based Wells Fargo & Co for $12.7 billion. Wachovia was based in Charlotte, North Carolina.

The analysts included Douglas Sipkin, who covered the brokerage and asset management sector including Goldman Sachs Group Inc and Morgan Stanley and Peter Benedict, who covered big-box retailers including Home Depot Inc, Target Corp and Wal-Mart Stores Inc.

They also included Jason Gere, who covered household and personal care products companies such as Procter & Gamble Co; John Morris, who covered apparel retailers such as Gap Inc; Ghansham Panjabi, who covered packaging companies such as Owens-Illinois Inc; and Susan Spivak, who covered insurers such as Allstate Corp.

Wachovia said it had about 40 equity research analysts before the departures. The departures follow Wachovia's awarding late last month of bonuses for the 2008 year. These bonuses fell about 80 percent on average in the corporate and investment bank, which includes Wachovia Capital Markets, a person familiar with the matter said.

Banks and brokerages industrywide are shedding analysts to cut costs amid downward pressure on revenue as the economy shrinks and capital markets remain volatile. Analysts were once big revenue generators at some investment banks. They lost that power after reforms spearheaded earlier this decade by then-New York Attorney General Eliot Spitzer to eliminate conflicts of interest.

Spivak, also known as Susan Spivak Bernstein, was on Tuesday named senior vice president for investor relations at Max Capital Group Ltd, a Bermuda-based specialty insurer and reinsurer. Wachovia said it plans to resume equity research coverage on a majority of the companies where coverage was suspended.

"We remain highly committed to providing relationship-based products and services, including research, to our equities and fixed-income customers," it said.