MORE JOB cuts could be on the way at Bank of America Merrill Lynch (BoAML), it emerged yesterday, as tough market conditions push firms across the sector to slash costs in an effort to shore up profits.
The bank reported second quarter profits of $2.46bn (£1.57bn), strongly up on the $8.83bn loss a year ago.
It has already pared back spending heavily – expenses came in at $17.05bn in the three-month period, down 25.4 per cent on the year.
The company cut 12,624 staff on the year bringing total headcount down to 275,460.
Furthermore, after saving $5bn per year in its retail operations by asking staff for cost-saving ideas, it expects to save another $3bn by extending the scheme to its client-facing arms.
The bank also paid back all debt related to the temporary liquidity guarantee programme as part of wider debt redemptions which it expects to give interest savings of $100m in 2012 and $180m in 2013.
In addition, the bank stressed its growing focus on credit quality with provisions for loan losses falling to $1.77bn – its lowest level since 2007.
However, there are further costs ahead – Fannie Mae claims against mortgage assets from Countrywide are mounting, for example.
The results revealed the bank has increased its Basel III core tier one capital ratio to 8.1 per cent – well ahead of its target of 7.5 per cent by the year-end.
Stocks fell on the results, ending the day down 2.59 per cent.