Jobs go as liquidity crisis hits Mortgages plc

Published on Saturday 7 June 2008 14:29

JOBS have been axed in Glasgow by Merrill Lynch-owned Mortgages plc, which has become the latest victim of the credit crunch.

Following a 30-day consultation, most of the 225 staff at its main operations centre in Glasgow, including senior executives, have been made redundant. This is a blow to the city's aim to build its financial services industry.

When Mortgages plc was launched in 1998, it focused on sub-prime business, but it has since moved into more mainstream lending and other specialist sectors such as buy-to-let. It was bought by Merrill Lynch in 2004.

The firm has now withdrawn from new mortgage business because of the liquidity crisis. It is thought it will retain a handful of staff in Glasgow to service its back book of lending, which is worth a few billion pounds.

Since the start of the credit crunch, Merrill Lynch has revealed billions of dollars of write-downs and cut thousands of jobs across the group on the back of its involvement in sub-prime deals.

A source close to Mortgages plc said: "It has been cutting staff numbers since last July, and now its entire senior management and sales and marketing teams have gone.

"Merrill Lynch must be evaluating its long-term strategy for Mortgages plc at the moment. It could possibly dispose of all its assets or turn it into a mortgage service company managing loan books for other lenders."