Bank of America Corp., the second-biggest U.S. lender by assets, named Christian Meissner sole leader of global investment banking less than a year after his promotion to co-head that unit with two other executives.
Meissner, 42, will oversee capital markets, corporate and investment banking and mergers and acquisitions while former co-heads Paul Donofrio and Michael Rubinoff take new roles in the division, co-Chief Operating Officer Thomas K. Montag wrote in a memo to employees yesterday and obtained by Bloomberg News. John Yiannacopoulos, a bank spokesman, declined to comment beyond confirming the memo’s contents.
“The new structure is a natural evolution of our corporate and investment-banking model as we continue to adapt to a changing market environment,” Montag wrote.
Montag, 55, is shaking up the division after it posted an annual profit that plunged by half to $2.97 billion in 2011 as the European sovereign-debt crisis roiled markets. Fees from investment banking, which includes advising clients on mergers and acquisitions as well as managing sales of shares and bonds, declined 35 percent in the fourth quarter to $1.1 billion, the Charlotte, North Carolina-based bank reported.
Donofrio, 51, will head credit and transaction banking, which includes oversight of global treasury solutions, loan products, leasing, trade and supply-chain finance, and custody and agency services, according to the memo. Rubinoff, 49, will hold the title of chairman of the investment bank along with Purna Saggurti, and is responsible for deepening relationships with CEOs and directors of large corporations. All of the executives report to Montag.
The moves were reported earlier by the Wall Street Journal.
Chief Executive Officer Brian T. Moynihan is pushing to pare costs by as much as $8 billion annually through an effort dubbed Project New BAC. The first phase resulted in 30,000 job cuts after scrutinizing the retail operations. The investment bank is next, with results -- and possibly more cuts -- set for April. Compensation for the unit’s dealmakers was reduced by an average of 25 percent, people briefed on the matter have said.
“What is the right fixed-cost structure given what we see in the market conditions and opportunities?” Moynihan, 52, said earlier this month during a conference call with analysts. “We need that business to come back or we’ve got to do more in expenses.”
Montag Sees Rebound
Montag said the investment bank was rebounding from a “difficult time” after the lender’s credit-rating downgrades last year ignited concern among clients. Perceptions of the bank were improving as the company bolstered its balance sheet, he told employees on Jan. 19.
Meissner led investment banking in Europe, the Middle East and Africa until his promotion in April to help run the division and was based in London. He will relocate to New York in the middle of this year, according to the memo.
He previously oversaw European investment banking for Lehman Brothers Holdings Inc. and was named its co-CEO for Europe the same month the firm filed for bankruptcy. He had joined Lehman in 2003 from Goldman Sachs Group Inc., where he had been co-chief of European equity capital markets. Montag was a former head of trading at New York-based Goldman Sachs.