Don't look now, but Bank of America may be doing a very small amount of pre-bonus, pre-Brexit trimming. It could yet become a trend.
Insiders say the bank is marking the start of pre-bonus culling season by cutting a very small number of under-performing staff from its investment banking business in Europe. Cuts are said to total no more than 2% of total staff.
Bank of America didn't respond to a request to comment on the redundancies, which are understood to be happening this week.
They come as the bank has been struggling with under-performance in its investment banking division, and follow the unexpected exit of Christian Meissner, head of the corporate and investment bank in September. Following Meissner's exit, many of BAML's bankers have lost their protector.
The redundancies also come as Bank of America is preparing to move global markets staff to its new office in Paris. Despite assertions that London staff don't want to move and the circulation of a leaflet persuading them of Paris's pleasures, sources suggest that BofA is moving much of its London equity derivatives team to the French capital. The displaced individuals are said to total over 20 people, including the equity derivatives structuring team run by Mohamed Yangui, all exotic equity derivatives, and non-UK European equity derivatives sales professionals.
Costs accounted for a comparatively low 58% of revenues in Bank of America's global banking division (which includes M&A, capital markets, business lending and transaction services) in the first half of 2018. In global markets they were a higher 65% of the total. This was a lot lower than at most European banks, but BofA is also thought to be facing mounting costs relating to the Paris move. With some London staff reluctant to migrate, the bank is said to be offering generous relocation packages including temporary accommodation, flights home, and school places to those who take up its Paris offer. Suddenly Paris isn't a lower cost location than London after all.
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