NCB left to regroup after `gang-of-seven' defects

Conor O'Kelly's decision to send out a strongly-worded press release on John Conroy and gang's departure from NCB - just as the…

Conor O'Kelly's decision to send out a strongly-worded press release on John Conroy and gang's departure from NCB - just as the "gang of seven" was presenting itself to a press conference does not strike this reporter as the smartest of moves, particularly as the press release on NCB letterhead still listed John Conroy and Barry Connell as directors.Okay, so there was blood on the carpet (in the metaphorical sense of course) after the early morning meeting when John Conroy gave the bad news to his NCB boss, but the decision publicly to accuse Mr Conroy of a breach of contract does smack of sour grapes, especially as the new Merrion Capital chief executive is emphatic that he did not break any contract.Either there was a breach of contract or there was not, but at this stage it seems that neither NCB nor Mr Conroy has any desire to get into a legal battle. That, however, might change if NCB or Ulster Bank - who paid £20 million (€25.4 million) for a broker now shorn of a large chunk of its talent - takes the view that Merrion Capital is chasing NCB's clients. The events at NCB once again prove the old market adage - people are a broker's assets and they can always walk out the door.Word around Georges Dock has it that Merrion had another dozen NCB people in its sights before NCB management got wind of what was going on. Merrion Capital - as a start-up (and privately-owned) company has an advantage that it can offer equity to people joining up, and John Conroy gave a strong indication that equity would be on offer for people of the "right calibre".That could prove to be an enticing proposition for senior markets people in the big-four brokers (all owned by banks) who don't have the opportunity to get a stake in the company they work for. Fat salaries and bonuses are all very well, but in the good old days when the Irish broking industry was privately owned getting an equity stake was prized.And as for Merrion's planned investor with deep pockets, virtually every international finance group has been mentioned from Julius Baer to Nationsbank Montgomery to Dresdner to Commerzbank. The official line from John Conroy is that nobody has been approached about taking a minority stake, but not everybody is convinced on that particular score.As for NCB, the defection of the "gang of seven" is a severe blow, but not a terminal one. True, the equity side of the business has received a devastating setback, particularly the loss of Barry Connell - one of the main points of contact with the international investors who have generated a large portion of the fee income for NCB. Presumably, Jim O'Donovan - consistently voted dealer of the year in the Finance surveys - will take over as head of equity sales. But there is no doubt that NCB will have to recruit senior equity sales and research staff - and quickly. Otherwise, it risks seeing an assault on its market position by Davy, Goodbody and ABN-Amro, not to mention the fledgling Merrion Capital.