Bank of America to cut Asia investment banking jobs
Hong Kong dealmakers among 24 in region expected to be axed as slowdown forces cost reductions
Bank of America is set to cut 24 investment banking jobs in Asia, including some top dealmakers, sources said, as a slowdown forces Western banks to cut costs.
The job cut plan comes after last Friday’s report that Goldman Sachs was planning to axe almost 30 per cent of its 300 investment banking jobs in Asia outside Japan, following a fall in activity in the region.
Some bankers handling client coverage and deals would be made redundant, starting this week, with cuts expected in Hong Kong, Singapore and Japan, Bank of America’s big centres in Asia, the sources said, adding that the number had not been finalised.
The bank’s cuts would account for a small portion of its total Asia corporate and investment banking staff, and were part of an annual cost trimming, a source said.
A Hong Kong-based spokesman for the bank, which last year posted a drop of about 3 per cent in its Asia net income, declined to comment. The sources declined to be identified.
The latest cuts in Asia come against the backdrop of a tough dealmaking environment as well as a slowdown in major economies including in China, Hong Kong and Singapore. Banks’ business has also been eroded by local competitors.
Bank of America was on track to post higher third-quarter revenues in its investment banking business compared with the second quarter, investment banking head Christian Meissner said at an industry event earlier this month.
However, the bank was gaining market share in most regions except for the Asia-Pacific, he said.
In July, chief executive Brian Moynihan announced a new expense target of US$53 billion for 2018,
US$3.3 billion less than its total expenses over the past four quarters.
The new target came after years of working through a sweeping cost-cutting project dubbed “New BAC” and an efficiency initiative called “Simplify and improve”.
Besides Bank of America and Goldman, many Western banks have announced plans to scale down their operations in Asia in the past year, as they grapple with slowing revenue growth and higher operating costs in the region.
Barclays said in January it would cut about 1,000 staff in its investment bank operations worldwide, with the bulk in Asia, while Societe Generale decided to close its equities research desk in India.
Other European banks including BNP Paribas and Deutsche Bank are expected to scale back operations in non-core Asian markets while last year Asia-focused Standard Chartered shut down its equities franchise.
The value of announced merger and acquisition deals for Asia-Pacific companies, excluding Japanese firms, fell 17.7 per cent to US$553 billion in the first half, while share offerings in the region sank nearly 60 per cent, according to Thomson Reuters data.