A man walks past a logo of Merrill Lynch in this file photo.YURIKO NAKAO/Reuters
Merrill Lynch Canada Inc. is making cuts to its Canadian equity analyst team, parting ways with a number of veterans, according to sources.
In Toronto, banking and insurance analyst Steve Theriault, senior base metals analyst Oscar Cabrera and trader Henry Yu were let go.
Mr. Theriault had been with the company since 2009. Previously, he spent more than a decade in the research department at BMO Nesbitt Burns.
Mr. Cabrera started his career in the late 1990s at Deutsche Bank. He also put in stints at Credit Suisse and Goldman Sachs before joining Merrill in 2009.
In Calgary, the brokerage parted ways with oil and gas analyst Peter Ogden, who had spent five years at Merrill.
Merrill Lynch declined to comment.
After the shakeup, Merrill's team of five equity analysts in Canada has been cut to just two: Michael Jalonen, who covers gold stocks, and Christopher Li, who follows consumer products companies.
Merrill intends to hand over coverage of most of the affected stocks to New York-based analysts, according to someone with direct knowledge of the situation.
Handing U.S. analysts coverage of Canadian firms is seen as a cost-effective move, but does not come without risk. The strategy could leave U.S.-based analysts at a disadvantage in an industry where access to on-the-ground information is paramount.
Merrill Lynch has a long history in Canada in the retail and capital markets business, having first set up shop in 1947.
After the 1987 crash, the brokerage made deep cuts in investment banking, sales and trading in Canada.
In 1990, Merrill sold its Canadian retail business to CIBC Wood Gundy for about $600-million.
With the $1.3-billion purchase of independent full-service brokerage Midland Walwyn in the late 1990s, Merrill beefed up its presence once again in Canada, particularly in capital markets.
In an interview, David Fleck, a partner with Delaney Capital who worked briefly for Merrill in the 1980s (before being laid off after the 1987 crash), said the U.S. broker's second kick at the can in Canada was a more focused effort to land mergers and acquisitions advisory work in "targeted corporate accounts" – a strategy he says worked better.
Merrill retrenched again in capital markets in Canada over the past decade. Merrill Lynch Canada's head count has fallen from roughly fifty employees involved in institutional sales, research and trading in equities to around 10.