Bank of America Merrill Lynch to layoff 15 managing directors in Asia

Bank of America Merrill Lynch is to lay off a fifth of its 75 managing directors in Asia as part of a reshuffle at the troubled US lender, according to people familiar with the matter.

The move is the latest in a round of job losses at investment banks, which come after performance reviews at the end of 2011. About 1,600 bankers at Morgan Stanley are due to leave the firm in the next two weeks.

BofA’s job losses are part of a wider shake-up in Asia under its corporate and investment banking chief Matthew Koder, who joined BofA from UBS last March. At the time, his boss Tom Montag said that the Asia-Pacific region “continues to be one of the most compelling growth opportunities” but the job cuts show BofA, like other banks in the region, is paring back.

In addition to the job cuts, which will see the exit of Michael Cho, co-head of Asian mergers and acquisitions, the regional team is being reorganised – junior analysts will no longer be grouped by corporate sector but pooled, a change being portrayed as making the team more nimble. BofA declined to comment.

The moves are separate to BofA’s “Project New BAC” reorganisation, its scheme to streamline the entire bank and cut costs, which was ordered by chief executive Brian Moynihan in the face of depressed earnings and protracted mortgage losses and litigation from its disastrous 2008 acquisition of Countrywide, the mortgage originator. Mr Moynihan is trying to convince investors that the bank is on course to meet tougher capital requirements.

The bank has already identified tens of thousands of job cuts it wants to make on the consumer side of the business.

BofA is due to announce fourth-quarter earnings next Thursday, the last big US bank to report in what is expected to be another depressed series of earnings.

Despite its continued problems, most analysts have higher price targets than Monday’s midday share price of $6.26 and only two out of 37 have a “sell” rating on the stock. With its vast footprint in the US, BofA is expected to perform well if the American economy strengthens and if it can draw a line under the billions of dollars of mortgage-related losses.

Source: FT