Bank of Amer­ica to faces steep com­pe­ti­tion de­spite hir­ing 800 bankers

The Pak Banker - - Front Page -

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

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