Bank of America's Shifting Focus Overseas, and Has a Wary Eye on Trading

Despite a $2.2 billion net loss in 2010, due in part to mortgage-related issues, Bank of America will continue to staff up in 2011. Its focus: Beefing up international operations, with a possible contraction or reallocation of trading personnel unless that unit rebounds.

BofA says much of its recent hiring has been tied to managing and servicing its substantial mortgage holdings, especially the tangled legacy of Countrywide Financial. But the firm is also stepping up moves into areas like global wealth management and investment banking. Last year, it added about 1,000 employees to its Asian, Latin American and African operations, and will continue to shift some of its current U.S. employees overseas in 2011.

"We're shifting talent to where the bigger growth opportunity is," said CEO Brian Moynihan during Friday's conference call.

BofA considers wealth management to be a prime area of near-term growth in the U.S. On the flip side, Moynihan said that if trading revenues didn't improve, the bank would consider resizing that unit. Its global banking and markets segment posted total sales and trading revenue of $17.3 billion in 2010, down from $17.6 billion in 2009. The unit's $2.9 billion in revenues for the fourth quarter was its worst performance in a year.

BofA didn't disclose total compensation, though non-interest expenses, which includes compensation, rose to $18 billion in 2010 from $15.9 billion in 2009. CFO Charles Noski said BofA's compensation-to-net revenue ratio was in the 37 percent range last year, comparable to Goldman Sachs's ratio but less than Morgan Stanley's.

One of Moynihan's goals is to bring BofA's overhead down. "The key is to get expenses to stay in the flattish range," he said.