UPDATE 1-BASIS POINT-Bank of America to shut Asia-Pac debt unit

(Recasts with company comment, details, background)

By Bram Rosenfeld

HONG KONG, Jan 31 (Reuters Basis Point) - Bank of America (BAC.N), which aims to eliminate 650 corporate and investment banking jobs worldwide, has scaled back its debt capital markets business in the Asia Pacific.

Banking sources told Reuters that the business in the region had been shut down, although a spokeswoman with the North Carolina-based lender disputed that.

"We clearly have resized the platform, but we are very much in business as usual," said Wendy Tan, a Singapore-based spokeswoman for the second-largest U.S. bank.

The bank, which was a relatively small player in the Asian debt capital markets arena, will no longer originate, structure or arrange debt capital markets (DCM) deals, including bonds, loans and structured products, in the region, the sources said.

As part of the move, Bank of America on Jan. 25 fired about 15 DCM staff, including all its originators and structurers, one of the sources said.

Earlier this month, the bank announced cuts which would eliminate 12 percent of capital markets and investment banking jobs, and follows comments by Chief Executive Kenneth Lewis in October the bank cannot "stay the course" in investment banking.

Lewis had also indicated the bank's investment banking division could see elimination of some businesses and infrastructure.

Those cuts were in addition to about 500 cuts made late last year as part of an overall reduction of 3,000 jobs companywide.

On Thursday, a Bank of America official, who declined to be identified, said: "On top of the subprime crisis, the acquisitions of LaSalle Bank Corp and Countrywide Financial Corp have put a lot of strain on the bank's financial resources."

WRITE-DOWN LOSSES

Last week, the bank announced quarterly profit sank 95 percent under the weight of more than $7 billion of losses tied to write-downs, poor trading decisions and mounting credit woes.

"Because of this the bank has decided to redirect resources from Asia Pacific, and to a lesser extent Europe, back to the U.S.," the Bank of America official said.

Bank of America joined Citigroup Inc (C.N), JPMorgan Chase & Co (JPM.N) and other banks in reporting losses related to leveraged loans, mortgages, consumer credit, or a combination.

U.S. and European banks and financial service companies are cutting tens of thousands of jobs to reduce costs as the economy weakens and credit conditions tighten, with Citigroup, Morgan Stanley (MS.N), UBS (UBSN.VX) and Credit Suisse (CSGN.VX) announcing cuts in recent months.

The cuts in the Asia Pacific were part of a 50-60 person bank-wide downsizing in the region and would be followed by a second phase in the next few months targeting support staff, one of the sources said.

Overall, the bank plans to significantly reduce its business in Australia, China, India, South Korea and Taiwan.

The cuts will be less severe in the regional financing hubs of Hong Kong, Japan and Singapore, where the bank may need staff to service fund-raising needs of its U.S. customers, the source said.