30,000 jobs to go at Bank of America

City A.M. Reporter
BANK of America Merrill Lynch is looking to reduce annual expenses by $5bn (£3.16bn) by the end of 2013 through its cost-cutting plan, including slashing 30,000 jobs, chief executive Brian Moynihan said yesterday.

The plan – known as New BAC after the company’s stock symbol – focuses on consumer banking and the bank’s systems architecture for now, he said. The second phase will focus on institutional client businesses such as corporate banking.

The bank currently employs around 288,000 people worldwide, meaning more than one in ten workers will lose their jobs.

Bank of America did not say how many of its 14,000 employees in Europe, the Middle East and Africa will be affected.

The group, which reshuffled its executive team last week, is targeting an expense-to-revenue ratio to 55 per cent and is cutting from roughly $73bn in annual expenses.

Bank of America shares have lost nearly half their value this year amid rising fears the bank will need to sell more shares to boost its capital levels.

By many estimates, the bank will need to raise about $50bn in coming years to meet new global capital requirements, a level the bank says it can reach through earnings and asset sales.

At a conference yesterday, Moynihan said the bank was not required by regulators to seek outside capital.