Thread: Band off America to Cut 650 Jobs, Sell Brokerage

BofA to Cut 650 Jobs, Sell Brokerage

MoneyNews
Wednesday, Jan. 16, 2008

NEW YORK -- Bank of America Corp said on Tuesday it would eliminate 650 corporate and investment banking jobs and sell its equity prime brokerage business, as the second-largest U.S. bank retrenches in the face of difficult credit market conditions.
The job cuts affect about 12 percent of workers in capital markets and investment banking operations, and follow a review announced in October. They are in addition to about 500 cuts made late last year as part of an overall reduction of 3,000 jobs companywide.

Bank of America will cut back operations in structured products such as mortgage and asset-backed securities and collateralized debt obligations. It also plans to cut some non-U.S. businesses while retaining a focus on debt, cash management, and trading of rates and foreign exchange.

Prime brokers typically provide trading, lending, cash management and other services to hedge funds. The job cuts do not affect Bank of America's prime brokerage.

"I see it as a reaction to the realities of today and as far as we can see in the future," Chief Executive Kenneth Lewis said in a press briefing with reporters at the bank's New York offices.

"For some period of time, we're going to be in a more simple world," he said. "Would you want the company to be a monolith and just not react to market conditions, or would you rather have a company nimble enough to see things would be different?"


REDEPLOYING CASH

Lewis vowed cutbacks after third-quarter corporate and investment banking profit sank 93 percent, pushing overall earnings down 32 percent. Last month, Lewis projected "quite disappointing" fourth-quarter results.

Bank of America did not specify how many cuts would be made in particular cities or lines of business. The bank is based in Charlotte, North Carolina, but houses much of its investment bank in New York. It said the cuts would not affect its plans to occupy a new tower it is building near Times Square in New York City.

Brian Moynihan, head of the corporate and investment bank, said in the interview the bank is selling the prime brokerage because "the return attributes for Bank of America are not so strong ... It allows us to take those dollars and invest in other things."

Bank of America employs about 220,000 people overall, including at the former LaSalle Bank Corp, which it acquired in October for $21 billion from ABN AMRO Holding NV.

On Friday, Bank of America agreed to buy struggling Countrywide Financial Corp, the largest U.S. mortgage lender, for $4 billion.


CITIGROUP

The changes mark a retreat from earlier in the decade, when Bank of America spent $675 million to expand its corporate and investment bank.

Lewis said the bank expects market activity to settle at 2005 levels, before a frothy housing market led to the creation of more complex securities for which there is now no demand.

Earlier on Tuesday, Citigroup Inc announced a $17.4 billion write-down tied to subprime-related CDOs, a large factor in the bank's record $9.83 billion fourth-quarter loss.

"Obviously those areas are under complete stress, so we are downsizing that relatively dramatically," Moynihan said. "Part of what we do is to choose our spots."

Moynihan replaced Gene Taylor at the helm of the corporate and investment bank.

Lewis admitted that his bank, and most of the industry, had misjudged the risks associated with the complex securities.

"Correlations broke down that had never broken down before," he said. Referring to Goldman Sachs Group Inc, which late last year made a winning bet that market turmoil was coming, he said, "Nobody that competed in the business escaped it, maybe other than Goldman, which made a big bet and won."

Lewis also said he regretted his comment an Oct. 18 conference call that, "I've had all of the fun I can stand in investment banking."

"I wish I had said it differently," he said.

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Although I hate to see any American lose a Job... I have no sympathy for Bank of America ... I hope it's bad investments come back to bite them in the backside

Boy, if another "BANK RUN" isn't taking place as WE speak, then I had better go back to school and take history over again as to what really happened in 1929... The same thing if you ask me.

Maybe this time WE should rob them, before they continue to keep robbing from US, and leave them to the soup lines and WP's I'm sure they will come up with to save our day...

Does anyone else besides me, agree with Lou Dobbs and his segments on the War on the Middle Class, that those whom have engaged this War on US, are our own elected sworn oath officials, American Banks, and American Business'?
Doesn't this country still have laws that prosecute those who wish to over throw our country with their treasonous acts ?

I thought WE still had laws that PROSECUTED CRIMINALS FOR STEALING ? Could someone please explain to me then just what our Bankers, Business' and Sworn Oath officials are doing then ?

Since what is good for the goose, should be good for the gander... Why don't the Big Banks start out sourcing their C.E.O.'s like they have our jobs? Oh, lest I forget, they've all ready handed US over on a silver platter to the Chinese and Mexican governments. Sorry ~

To A Better Day America !

Your Loyal Son & Servant ~

_____________________________

Give Me Liberty, or Give Me Death !!!

Well we can look at this way. Who are we going to pay our mortgages to when the banks are gone?

Originally Posted by Paige

Well we can look at this way. Who are we going to pay our mortgages to when the banks are gone?

LOL!!! How about the World Bank?

CitiGroup will be laying off 20,000.

We tried to tell B of A about those no doc, stated income, no down loans! Not to mention all the Visa cards to illegals. Tsk Tsk...they just never listen....