Big bank cuts traders despite improving market conditions
Bank of America apparently didn’t get the memo that trading revenues have been improving during the third quarter. BofA said goodbye to two high-ranking trading executives this week and is said to be planning a swath of cuts beginning next week.
David Moore, chief of North America rates trading, and David Hartney, global head of futures execution, have already left the bank, according to Bloomberg. Next up are traders further down the pecking order, though the bank still could be targeting rather senior and more expensive personnel.
As one would expect, the cuts will affect fixed income trading desks more than those working in equities. Trading revenues across all bulge bracket banks were down during the first half of the year, though some banks have hinted recently that third quarter numbers will be kinder.
Earlier this week, Citigroup CFO John Gerspach said trading revenues should be in line with last year’s third quarter, which would be a massive improvement over the first half of the year. September, he said, should be better than August, so they’re headed in a positive direction. Credit Suisse was even more optimistic, noting that fixed income revenue across Wall Street could be up as much as 5% year-over-year.
But banks are still trimming headcount as trading revenue growth has been incremental, at best. Plus, September historically tends to be strong month for trading. Bank of America Chief Financial Officer Bruce Thompson said that trading results were “reasonable” in July, but slowed in August.
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