MORGAN STANLEY lost another senior banker last night as Raymond McGuire, the second in command of the firm’s mergers and acquisitions department, resigned suddenly.

Mr McGuire, who was one of two powerful co-heads of the M&A division and as such brought in some $500 million of revenue last year, is understood to have been poached by Citigroup to run its investment banking division.

A source close to Morgan Stanley confirmed Mr McGuire’s resignation but the bank declined to comment.

The departure of such a high-level banker was seized upon by the so-called group of eight former Morgan Stanley directors who are trying to oust Philip Purcell as chief executive.

“Time is of the essence here,” a spokesman for the group said. “If something is not done then more guys like McGuire may leave. Morgan Stanley says it has a deep bench. Well McGuire is the bench.”

The group, also known as the Grumpy Old Men, wants to demerge the firm’s investment banking division and leave Mr Purcell in charge of the retail banking and credit card arms.

A swath of executives has left the bank in recent weeks as part of a tide of departing talent dubbed by some as the “Morgan Stanley brain drain”.

Mr Purcell’s opponents claim the departures are linked to his ineffective leadership.

The most senior Morgan banker to have quit so far is Joseph Perella, one of the most renowned investment bankers on Wall Street.

Mr Perella is one of five members of the bank’s management committee to have left since March 28 when Mr Purcell announced an executive shake- up.

Mr McGuire and Mr Perella have a close relationship that goes back to the 1980s when Mr Perella hired Mr McGuire to work at First Boston, the investment banking group that later merged with Credit Suisse. Mr McGuire then followed his mentor to Wasserstein Perella and later still on to Morgan Stanley.

A source close to Mr Perella said it was unlikely that the top investment banker would end up at Citigroup with Mr McGuire, but that he would be sifting through proposals for a new challenge over the coming weeks.

Meanwhile, Morgan last night appointed Alasdair Morrison, head of the Asia-Pacific businesses since 2001, to its management committee.

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