If you want to assess how debt value adjustments (DVA), an accounting technique used to value banks’ own debt, skewed earnings last year, take a look at Bank of America. For the first three months of 2013, the bank posted $55m in DVA losses in its trading functions, compared to $1.4bn during the same period last year.
In theory, its fixed income currency and commodities business improved revenues by nearly $400m to $3.2bn compared with year on year Q1, but add last year's DVA losses into the equation and revenues actually slumped by over $800m on 2012. J.P. Morgan also posted much smaller DVA losses in its investment bank this year.
As we’ve pointed to previously, it’s important to look at the ‘clean’ figures – namely excluding DVA – before assessing a bank’s performance.
Overall, however, its global markets business, which houses BoA’s trading functions, managed to increase net income to $1.4bn, from $828m for the first quarter of 2012.
Investment banking, meanwhile, posted flat revenues and a decrease in net income from $1.6bn to $1.3bn. Investment banking fees increased to $1.5bn, or 26% year on year, on the back of strong debt underwriting deals.
Bank of America doesn’t break out either headcount or compensation by individual divisions. However, overall employee numbers shrank by more than 16,000 to 262,812.
Bankers no longer party, techies do (Bloomberg)
Goldman Sachs employs 789 people in its new UK private bank (Financial News)
Margaret Thatcher knocked down social barriers in the City (Telegraph)
UBS using shock tactics to shake up wealth management unit (Bloomberg)
Morgan Stanley has lifted a ban on its juniors job-hunting (Bloomberg)
Credit Suisse shareholders are likely to block senior staff bonuses (Financial Times)
Jefferies has poached a Morgan Stanley leveraged finance MD (Financial News)
Knight Capital’s CEO received no cash bonus for 2012 (Wall Street Journal)