Bank to cut 600 jobs, so it can hire 350

Bank of America moves to strengthen its securities unit

November 24, 2001|By BLOOMBERG NEWS

CHARLOTTE, N.C - Bank of America Corp. plans to hire 350 people in its securities unit by mid-2002 as the third-biggest U.S. bank attempts to lure more talented bankers and traders from the ranks of those fired on Wall Street.

To do this, though, the Charlotte-based bank is eliminating 600, or 7.5 percent, of the 8,000 jobs in its corporate and investment banking unit.

Some of those who are being fired are investment bankers whom Bank of America hired during the late 1990s, at the height of the investment banking boom.

Bank of America had to settle for lesser talent in some cases, because top bankers at rival firms were earning big paychecks and bonuses and were so busy that few wanted to consider changing jobs, said Russ Gerson, a financial services executive recruiter for A.T. Kearney Inc.

"Clearly the quality of individual we are going to be able to attract who has been displaced by other firms is going to be higher than when we were trying to pull unwilling players out of these firms," said William A. Hodges, head of debt capital markets for Bank of America.

The decline in business across Wall Street, especially stock sales and mergers advice, has led to the most prolonged drop in profits since 1995 and the deepest job cuts in 14 years. Securities firms have sliced more than 26,000 jobs this year, according to the Securities Industry Association.

Merrill Lynch & Co., Citigroup Inc., J.P. Morgan Chase & Co. and other financial firms are eliminating thousands of jobs, providing a pool from which Bank of America hopes to hire workers in investment banking and stock and debt markets.

Bank of America's foray into investment banking has gotten off to a slower start than it had hoped in 1997, when its predecessor, NationsBank Corp., ventured into stock underwriting with its $1.2 billion acquisition of Montgomery Securities of San Francisco.

Lewis Coleman, then head of NationsBank's investment banking unit, predicted in 1999 that the bank would become a top-five investment bank by the spring of 2002.

The firm ranks ninth in U.S. equity underwriting and 15th in mergers and acquisitions fees through the third quarter of this year, according to Bloomberg data. Still, it has climbed since 1999, when it ranked 15th in equity underwriting and 21st in mergers and acquisitions fees.

"We are really a new player in the investment banking world," Bank of America Chief Executive Officer Kenneth D. Lewis told analysts recently in Boston. He has targeted investment banking as an area of growth, hoping to build upon Bank of America's strategy of swaying more of its corporate borrowers to hire it for more profitable investment banking.

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