BofA poaches Bischof from M Stan­ley as banks eye wave of fi­nance M&A

Financial Times Middle East - - Companies & Markets - JAMES FONTANELLA-KHAN BEN MCLANNAHAN — NEW YORK

Eric Bischof, a top fi­nan­cial ser­vices banker who ad­vised the US govern­ment dur­ing the 2008 fi­nan­cial cri­sis, has been poached from Mor­gan Stan­ley by Bank of Amer­ica Mer­rill Lynch.

The vet­eran banker, who ad­vised the New York Fed­eral Re­serve Bank on the im­plo­sion of AIG, will be­come the global co-head of BofA’s fi­nan­cial in­sti­tu­tions group, ac­cord­ing to an in­ter­nal memo ob­tained by the Fi­nan­cial Times.

The move comes at a time when bankers ex­pect a fresh wave of deals in the fi­nan­cial ser­vices sec­tors amid a more re­laxed reg­u­la­tory en­vi­ron­ment un­der Don­ald Trump’s ad­min­is­tra­tion. It is a big loss for Mor­gan Stan­ley and a coup for BofA, where global in­vest­ment bank­ing fees have risen 13 per cent to $1bn so far this year, putting the bank just be­hind JPMor­gan Chase, ac­cord­ing to Dealogic.

Mr Bischof has worked on some of the largest deals in the in­sur­ance sec­tor over the past decade, from the sale of key parts of AIG in the af­ter­math of the fi­nan­cial cri­sis to more re­cent block buster and mar­que trans­ac­tions.

Although Mr Bischof has deeper knowl­edge and ex­pe­ri­ence in the in­sur­ance sec­tor, he will also be co-head­ing the bank­ing divi­sion, amid a surge in op­ti­mism around the bank­ing sec­tor since the elec­tion of Mr Trump. The new pres­i­dent’ s prom­ises of stronger growth, lower taxes and lighter reg­u­la­tion have boosted the KBW Banks In­dex about 30 per cent since his elec­tion, prompt­ing ex­ec­u­tives to con­sider share-for-share deals for the first time in years.

Reg­u­la­tors, too, ap­pear to be look­ing more favourably on the idea of con­sol­i­da­tion within the bank­ing sec­tor.

Merg­ers be­tween banks have stalled since the fi­nan­cial cri­sis — sev­eral pro­posed ac­qui­si­tions have been scrapped be­cause reg­u­la­tors took too long to ap­prove them.

But last week the US Fed­eral Re­serve made it eas­ier for banks to merge by lift­ing the com­bined size thresh­old that would trig­ger a much deeper reg­u­la­tory re­view, from $25bn to $100bn.

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