Bank of America Overhaul Announced

by Stewart Douglas

Story link: Bank of America Overhaul Announced

The Bank of America has today announced it has planned a widespread management restructure in ints investment banking division, in light of the recent substantial losses it announced over the third quarter as a result of its exposure to the now collapsed subprime lending market.

The bank announced today that it was about to embark on a reshuffle which will initially see president of investment banking Gene Taylor make way for an internal appointment from within its investment management division.

The firm has also suggested that it may have to lose in excess of 3,000 jobs to cut back on expenses within the division to increase efficiency and profitability over the short term, in what has been described as an overhaul of the corporate structure within the investment division.

The news comes just a few days after the bank announced it would be scaling back its operation in light of the recent high profile losses it sustained from its investment division in the wake of the subprime market crisis.

The bank reported losses of almost $1.5 billion over the period, down around a third on the year previous solely as a result of the losses on exposure to sub-prime linked assets, despite otherwise strong performance in its consumer banking operations.

Speaking today on the situation, Bank of America chief executive officer Ken Lewis said that the changes in organisation, spawned by its prior poor performance reflected a turn towards more effective management of its investment portfolio for the future benefit of its shareholders.

The Bank of America has proven to be profitable over other secotrs in recent times, despite its relatively unsuccessful venture in the investment banking market.  It remains to be seen whether its cutbacks will result in the efficiency gains it has previously forecast.