* BofA plans to cut 300 investment banking jobs-sources
* Second phase of efficiency program expected to cut fewer jobs
* Investment banking key source of profits for bank
By Rick Rothacker
May 1 (Reuters) - Bank of America Corp is planning to cut about 300 jobs in its investment banking and capital markets group, as it struggles to rein in costs to make up for weak revenue growth, sources familiar with the situation said on Tuesday.
The layoffs are not nearly as eye-popping as the bank’s job cuts in areas like retail banking. Wall Street companies have broadly been looking at cutting jobs recently.
The bank, The second-largest in the United States by assets, is also assigning junior bankers to work with broader groups of companies, the sources said. That move could also lead to more layoffs, the sources said.
The changes for junior bankers are part of the cost-cutting program known as “Project New BAC,” which the bank launched last year, the sources said. The program, named for the bank’s ticker symbol, is meant to improve profits as a sluggish economy weighs on revenue growth, and new regulations boost compliance costs.
The first phase of the program is expected to cut about 30,000 jobs and $5 billion in annual expenses in consumer and technology areas over the next several years. Plans for the second phase, which covers investment banking, sales and trading, commercial banking and wealth management, are expected to be finalized in May.
Bank of America declined to comment on its plans for the second phase. In earnings conference calls, executives have said the second phase will produce fewer job cuts and less savings than the first phase because it covers a smaller and more efficient area of the company.
Trimming expenses in the bank’s institutional businesses is a delicate task because these operations, bulked up by the 2009 Merrill Lynch acquisition, have produced much of the bank’s profit in recent years.
Still, Bank of America and other Wall Street firms, have been scaling back after market volumes slowed last year amid concerns about the European debt crisis. In the first quarter, Bank of America’s trading revenue and investment banking fees rebounded from a weak fourth quarter but were still down from a year ago.
“Clearly on the margin this quarter you feel better about the overall sales and trading opportunity, (but) it’s not going to change the rigor and discipline with which we go through” the second phase of New BAC, Chief Financial Officer Bruce Thompson said during the bank’s first-quarter earnings call.
Bankers in equities, mergers and acquisitions, and sales and trading, where business has slowed, are bracing for job cuts in coming weeks, sources familiar with the matter said. Higher-ranking managing directors whose salaries have increased in compensation for reduced bonuses could be targeted in the reductions, sources said.