FIVE YEARS since the financial crisis began, investment banks are embarking on a new round of job cuts, slashing expenses to try to cope with the prolonged economic downturn.
Nomura yesterday commenced its $1bn (£617m) savings programme, which is set to see one-third of its European investment bankers lose their jobs – many of whom are in London.
Bank of America Merrill Lynch (BoAML) is also reportedly accelerating its programme of 16,000 job cuts.
Of Nomura’s $1bn in savings, $450m will be made in Europe and $225m will come in the form of job cuts. London is the bank’s largest centre in Europe, with roughly 4,000 staff currently.
And WSJ reported BoAML is cutting back on mortgage lending to focus more on deal-making when markets start to recover.
The second-largest US bank intends to slash 16,000 jobs by year-end, putting it a year ahead of a plan to eliminate 30,000 under a cost-cutting program called Project New BAC, the newspaper said, citing a document given to top management.
The bank began cutting jobs last fall and had been expected to complete the task by the end of 2013.
Bank of America has lagged rivals in recovering from the financial crisis, largely due to mortgage-related losses. Total revenue has declined for four straight quarters, raising investor concerns about how it will boost earnings.
Nomura, whose London headquarters were opened by chancellor George Osborne in April 2011, says it will complete the latest round of restructuring by March 2014.
It is aiming for pre-tax profits of 250bn yen (£1.9bn) from its wholesale, retail and asset management divisions by March 2016.
Those divisions generated a combined profit of 46bn yen in the past business year.
Deutsche Bank is understood to have fired around a third of the staff in its Asia equity derivatives business at the start of September.