Bank of America solves its main problem
24 December 2008American financial market expects for the next wave of dismissals. Last week Bank of America has promulgated the plan on dismissals from 30 up to 35 thousand employees within three years. Management of the company is compelled to go for optimization of the costs connected with forthcoming merge Merrill Lynch and Co., and also with negative influence of recession of national economy.
Shareholders Bank of America and Merrill Lynch have approved merge on December, 5th. The transaction is to be finished till January, 1st, 2009. In result in the USA there will be the largest on volume of actives bank. Earlier the transaction was estimated in 50 billion dollars, but in connection with falling of cost of actions Bank of America (more than on 64 %) now makes less than $20 billion.
The number of employees of bank after merge will reach 308 thousand people, 60 thousand from which will work in Merrill Lynch. Analysts do not doubt of inevitability of personnel optimization, especially in view of recession in the USA and aggravations of competitive struggle in bank sector. According to Bloomberg, such important indicator, as P/E (the parity of cost of share to profitableness), makes about 43 %, while at two other leading American banks - JPMorgan Chase both Co. And Citigroup - this parameter makes 53 and 66 % accordingly.
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- Sale of Postbank is still under the question
- Largest US banks are asking for additional capitalization
