Bank of America to faces steep competition despite hiring 800 bankers
NEW YORK: Bank of America (BofA) has not hesitated to lay out its strategy for the post-crisis era. "We are going to be your everyday banker as well as your big deal banker," Brian Moynihan, who succeeded Ken Lewis as BofA's chief executive a year ago, recently told investors.
To fulfil its aspiration to join the ranks of the top investment banks the Charlotte-based lender agreed to buy Merrill Lynch in September 2008 in an all-stock deal then valued at $50bn. The move was a bold one, but also brought a spate of lawsuits and cost top executives their jobs.
Two years later, the idea of melding BofA's massive consumer and commercial banking operations with a global investment bank and the industry's top retail brokerage still makes sense to many.
But, while the controversies stemming from the Merrill deal have now receded, new ones have emerged. This year the bank has endured an industrywide scandal on US foreclosure practices, as well as widespread expectations that mortgage securities investors will force BofA to buy back billions of dollars in loans that failed to meet underwriting standards.
While BofA ranks first in US fees, the bank's presence outside its home country remains low; it has a less than 5 per cent share of the nonUS market for merger advice, debt and equity underwriting.
BofA has hired 800 bankers and traders outside the US, half of whom work in Asia, to help round out its footprint. But it will face steep competition from virtually every other bank with global ambitions, some of whom have deeper ties to fast-growing economies than BofA.
Meanwhile, six of the country's largest mortgage lenders, ensnared in the robo-signing foreclosure fiasco, may be considered guilty of filing improper paperwork and see all their cases suspended unless they can convince a New Jersey judge next month that their practices are legitimate, the state's chief justice ruled yesterday.
The judge, Stuart Rabner, gave the banks, including JPMorgan Chase and Bank of America, 30 days to come up with the proof.
The banks, which also include Citigroup, Ally Financial's GMAC, OneWest Bank and Wells Fargo, must "show cause why the processing of uncontested residential foreclosure matters they have filed should not be suspended," the court ruled, in an order.
Twenty-four additional lenders responsible for some 200 home foreclosures in New Jersey --including Wachovia, PNC Bank and Bank of New York Mellon --were ordered to go before a separate judge, who's been called out of retirement specifically to make sure that their documents are on the up-and-up. "What we're saying is, we don't want to see any filings where the paperwork is not in order," said Winnie Comfort, a spokeswoman for the NJ court system. This is an issue that "affects individual families." -PB News
ISLAMABAD: Federal Minister for Kashmir Affairs and Gilgit Baltistan Mian Manzoor Ahmad Wattoo shaking hand with South Korean Ambassador Riyong Hwan prior to a meeting on Tuesday. -Online