BofA cuts more than 9,000 jobs, earns profit
Bank of America booked a solid third quarter buoyed by strong growth within its retail banking and wealth management units. And yet again, the bank relied on mass layoffs and aggressive cost-cutting to earn a profit.
Expenses at Bank of America plummeted 6% compared to a year ago on the back of 24,600 job cuts over the last 12 months. BofA was particularly active in Q3, slashing over 9,000 jobs. The bulk of the cuts came from where you would expect: mortgage units and local branches. The bank closed 85 net branches during the quarter in which it earned a $2.5 billion profit.
On the mortgage side, layoffs moved from refinancing departments and troubled loan units – businesses that are designed to shrink as the economy improves – to the mortgage origination side. Volumes were extremely low in Q3. Chief Financial Officer Bruce Thompson expects to continue wielding the knife during the final three months of the year. Its mortgage business lost $1 billion in the third quarter alone.
Meanwhile, Bank of America delivered surprisingly strong wins in wealth management and retail banking, up 26% and 32%, respectively. BofA outpaced competitors when it came to loan growth, credit quality and deposit balances.
However, it suffered alongside rivals on the sales and trading front, losing $778 million following a 20% dip in FICC revenue. Compensation expert Alan Johnson said earlier this week that bond traders could see a 15% drop in bonuses this year, with many receiving a goose egg come the New Year. Expect BofA traders to be amongst this group.
Random Factoids of Working at Goldman (eFinancialCareers)
We snuck into Goldman Sachs’ first career webinar. Buried beneath the clichés common to all recruitment videos were a few interesting nuggets, some more obvious than others.
J.P. Morgan has reached a settlement with the CFTC over the “London Whale” trading debacle. The bank will admit wrongdoing and pay a $100 million fine.
Tough Commute (eFinancialCareers)
More information is becoming available surrounding Hector Sants, Barclays’ new compliance head who was forced to take a leave of absence due to “exhaustion and stress.” It turns out Sants had a ridiculous four-hour commute. He’ll also earn well over $500,000 while he’s away.
J.P. Morgan Needs Analysts (Financial News)
J.P. Morgan Asset Management plans to hire more sellside research analysts for its global emerging markets funds. The group is looking for analysts with “bottom up fundamental research and more quant-type research.”
Nearly 98% of stockbroker requests to scrub customer complaints from their record were granted in 2011, according to a new study.
Deutsche Bank managing director Troy Dixon left the firm this week with plans to start his own hedge fund.
Gender Discrimination (Bloomberg)
Goldman Sachs is being forced to turn over internal gender-bias complaints by female workers as part of a group lawsuit alleging sex discrimination.
Buzz Around the Office
How Not to Deal with a Recruiter (Business Insider)
An email reportedly sent by a student at the University of Wisconsin – Milwaukee to an accounting recruiter has gone viral. It’s a strong lesson in what not to say: don’t bring up topics like cold sores and falling in love.
List of the Day: The Night Before
Do these three things the night before starting a brand new job.
- Pick out you outfit.
- Prep your best small talk.
- Remember why you took the job in the first place.