Bank of America is planning to sell its equity prime brokerage business as part of a series of changes to its global markets and global investment banking divisions. The firm says it is seeking a buyer with a proven ability and commitment to continue serving clients’ prime brokerage needs.
The changes have been prompted by a strategic review, which the bank conducted following poor third-quarter 2007 results in its capital markets businesses. Other changes include cutting 650 jobs from the two divisions and reducing activities in certain structured products, including
collateralised debt obligations.
Bank of America says the changes will shift investment away from activities that do not directly contribute to the success of the company’s integrated model, and are intended to avoid risks that are not commensurate with rewards. The changes will lead to revenue and expense reductions, which the company will provide more detail on when it releases its 2007 results on 22 January.
“These changes will sharpen the focus of our capabilities and activities on the needs of our clients,” says Kenneth Lewis, Bank of America’s chairman and CEO. “We should emerge from this realignment with profitable and more competitive Global Markets and Global Investment Banking businesses. We are committed to that, and it is important to our success.”