Bank of America Corp. (BAC), the biggest U.S. bank, cut about 60 positions in its equity sales and trading division this month to help bring expenses in line with revenue, said two people with knowledge of the decision.
The lender based in Charlotte, North Carolina, sought to trim its least-productive employees around the world, said the people, who declined to be identified because the move wasn’t public. The equities division employs about 2,500 people globally, one of the people said.
Bank of America follows Barclays Capital, the investment- banking unit of Barclays Plc (BARC), in eliminating equity sales, trading and research jobs as Wall Street firms grapple with reduced revenue from buying and selling securities. Fixed-income trading revenue at U.S. banks probably fell 30 percent in the second quarter from the prior three months, while equities trading fell 15 percent, Citigroup Inc. analyst Keith Horowitz estimated in a report last week.
While sales and trading results declined from a “seasonally strong” first quarter, they improved from a year earlier, Chief Financial Officer Bruce Thompson said today in a conference call. Jessica Oppenheim, a Bank of America spokeswoman, declined to comment.
Bank of America is looking to trim costs in other businesses, including the home-loan unit, Chief Executive Officer Brian T. Moynihan said this month. The firm will cut staff in its mortgage-sales unit in the next few months because volume is declining, he said.
Bank of America said today that it expects to report a second-quarter loss of about $8.6 billion to $9.1 billion fueled by an $8.5 billion settlement to resolve bondholder claims over soured mortgages. The firm also plans to record $6.4 billion in charges including legal costs and a writedown of mortgage-unit goodwill and will add $5.5 billion to a liability reserve for future loan-repurchase demands.