Bank of America’s Hiring Surge Signals Industry Shift
It wasn’t so long ago that Brian Moynihan, the deeply enduring CEO of Bank of America, said he expected headcount at the bank to keep falling amidst the industry-wide enthusiasm for automation. 2,000 coding jobs have been ‘saved’ by AI, said Brian in January. Relationships cannot be automated, though. And so senior bankers are still needed.
Rising Demand for Bankers
Speaking yesterday at the Morgan Stanley Financials Conference, Jim De Mare, the known pleasant guy who is president of global markets at Bank of America, suggested that BofA might be hiring more bankers than it expected this year.
“Candidly, I think the economic growth that we’re seeing in the deal activity has caught many firms by surprise, and that’s why it’s been such an active environment for recruiting,” said De Mare. He also said: “…we build in the flexibility in our planning such that, yes, we’re going to staff up accordingly where we need to be.”
Bank of America is one of the lead bookrunners on the SpaceX IPO and it has therefore decorated its lobby with rockets. With a possible view to winning future technology deals, BofA has also been hiring supplementary technology bankers. Semiconductor specialist Richard Hardegree is joining from UBS as vice chair of M&A. Former BofA head of TMT banking, Gary Kirkham, is returning from Centerview. Goldman Sachs MD Jason Rowe is joining as co-head of global technology investment banking. Mahir Zaimoglu has returned to banking after co-founding an AI recruiting business and is now head of TMT M&A at BofA in London. And Patrick Czornick joined the bank two weeks ago from JPMorgan in London as co-head of EMEA TMT banking, which was a step up from his previous role as a telecoms banker.
It’s not clear whether this is what De Mare was referring to, but BofA has presumably invested over $10m in its telecoms banking business in the space of only a few months.
Market Growth and Trading Volume
Away from investment banking deals, De Mare was especially enthused about Asian equities. “There’s a lot of desire to access Asia, the Asian markets. That’s been a high area of growth,” he said. Japan is experiencing “newfound enthusiasm” now that Japanese rates are higher.
In the past few years, De Mare said the potential for the markets business has grown dramatically. “I think we were doing like seven billion shares a day in trading volume in equities pre-COVID. I think we got up to 11 billion or 12 billion. We’re between 15 billion and 17 billion a day today,” he said of equities trading. In fixed income, De Mare said rates hedging is a big part of the business. But trading has also changed, he said. It’s increasingly about “liquid observable assets” with low capital requirements. Banks are now focused on “facilitating” trades and electronic market making, not taking risk. “More of the activity of the banks today is in — and brokerage houses are in Level 1 and Level 2 assets,” he said, referring to assets that are liquid and reliably priced. “- I don’t even hear anybody talk about Level 3 assets anymore as a part of their balance sheet.”
Focus on Optimization and Performance
While this sounds good for systematic traders and senior investment bankers, De Mare reiterated BofA’s overall focus on costs. “We’re always trying to optimize capital and financial resources,” he declared yesterday. De Mare said too that: “I think we’re pretty religious about reviews and performance and how we’re doing.” This might suggest that BofA people who are not sufficiently venerated will find themselves excommunicated.
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