Bank of America didn't wait for Tuesday's fourth-quarter financial release to detail its scaled-back plans for investment banking - including 650 additional layoffs.
The bank plans to exit the prime brokerage business, curtail many trading activities and cut back on investment banking in Europe and in unrewarding sectors such as defense and heavy industry, Chief Executive Kenneth D. Lewis told reporters last week.
The latest moves will shrink B of A's corporate and investment bank headcount to 80 percent of its size a year ago. The 650 jobs being eliminated come on top of 500 layoffs from the unit announced last October, on the heels of poor third-quarter results that included a $1.45 billion trading loss.
Nevertheless, Lewis admits he went too far with his famous October pronouncement that "I've had all the fun I can stand in investment banking." That remark sparked wide speculation that B of A might exit the field entirely - a view the CEO now calls a "misperception," according to The Wall Street Journal.
"Bank of America plans to keep investment bankers in specialties where it has thrived, such as advising health-care, commercial-real-estate, restaurant and retail companies," the Journal says. Lewis also voiced satisfaction with his bank's strategic investments in Mexico, China and Brazil.
But it's scaling back in Europe and getting out of metals trading and collateralized debt obligations, while "drastically reducing" other structured products such as asset-backed securities. The bank also intends to sell its equities prime brokerage.