Bank of America, the second biggest US bank, has made a number of redundancies in its foreign exchange business as it tightens up of its operations following sub-prime losses.
They are among the 650 job cuts that the bank plans to make globally across the Global Investment Banking and Global Markets groups following a slump in profits.
Leaving the bank are Greg Kaldor, managing director in FX sales, Mark Rossi, principal in global FX institutional sales, Kai Herbert, principal and senior emerging markets trader, and Simon Manwaring, principal and senior FX options trader. A spokesperson confirms that they are leaving the firm. All are based in London.
Market sources tell Squawkbox that at least seven people working in BofA’s FX options business in London and New York have also been let go. The spokesperson declines to comment on this saying that BofA is not breaking out the 650 figure by location, line of business or job function.
The Charlotte, North Carolina-based bank has also centralised its commodities and asset backed securities businesses in the US, and as a result has closed its Europe, Middle East and Africa commodities desk and asset backed securities business for Europe.
“Our core commodities clients are US-based corporate and commercial entities, so to create operational efficiencies and better serve them we are centralising our commodities platform in the US,” the spokesperson says.
The company said last month that it would be forced to slash 650 jobs in its investment bank and sell its equity prime brokerage business after its full-year profits in global corporate and investment banking fell from $6 billion in 2006 to $538 million. The company recorded $5.28 billion of mortgage-related writedowns in the fourth quarter following the collapse of the sub-prime loan market. This compares to a $460 million profit a year before.
The 12% cut from the corporate and investment banking staff comes on top of 3,000 redundancies that the bank said it would be making company-wide last October.
Out of those, 500 were to come from its global investment banking operation. At that time Christiane Mandell, head of currencies and local markets, left along with Ed Blair, managing director of foreign exchange systematic trading, and his team (Profit & Loss, December/January).
The spokesperson says: “Last week we announced several changes to the Global Investment Banking and Global Markets platform. These changes are intended to ensure the businesses are focused on our clients’ needs, sized properly in view of market conditions and present a stronger platform for future growth.”
Bank of America also suffered the unrelated loss of Kamal Sharma, senior G10 strategist at the bank, who last week resigned to joined JP Morgan in its strategy team.
Bank of America is not alone in using the opportunity presented by the sub-prime crisis to re-align its FX business. Market sources also report departures at Credit Suisse, Deutsche Bank and Dresdner, although none are believed to involve senior personnel.