Wednesday, 24 August 2016
Last updated 5 hours ago
Jan 16 2008 | 2:38pm ET
Wracked by plummeting profits, Bank of America announced that it will sell its prime brokerage unit, part of plan to scale back its investment banking operations and slash jobs.
Brian Moynihan, head of corporate and investment banking at BofA, said the Charlotte, N.C.-based firm’s prime brokerage’s “return attributes… are not so strong.”
BofA said it would cut 650 jobs in corporate and investment banking, but none at the prime brokerage, which has about 500 clients.
The planned prime brokerage sale is part of an overall scale-back in operations at BofA, including reductions in structured product operations.
“I see it as a reaction to the realities of today and as far as we can see in the future,” CEO Kenneth Lewis said in a press briefing.
“For some period of time, we’re going to be in a more simple world. Would you want the company to be a monolith and just not react to market conditions, or would you rather have a company nimble enough to see things would be different?”
Late last year, the struggling unit lost its global head, Christopher Pesce, and has been hit with a string of high-profile departures, including six top executives, including then-chief operating officer Glen Dailey, who joined New York-based Jefferies Group.
Last month, it was rumored talking with Citadel Investment Group about selling the prime brokerage to the hedge fund giant. Citadel denied that any such discussions had taken place.