Bank of America's job cuts in Asia cross most front-office business areas and are targeting "under-performers" across sales, trading and investment banking across multiple asset classes. The bankers leaving BAML also face a difficult search for new work, especially if they want to join another big US bank.
BAML has cut about 15 senior banking jobs in Asia, mainly in Hong Kong. Three of the 15 are managing directors (MDs) and the rest are at director or executive director level, says a headhunter in Hong Kong, who has knowledge of the redundancies and who asked not to be named.
He adds that the cuts include Darby To, a sales director in international markets, who’s been with the firm in Hong Kong for almost nine years.
Benoit Sauvage, head of Asia index and single stocks exotics trading, has also been laid off. Sauvage joined BAML in 2014 and has had a 17-year career in Hong Kong banking, including an eight-year stint at Goldman Sachs.
In Singapore, Lianne Hack, a director in Asia Pacific equity sales, has lost her job, according to the headhunter.
Bloomberg had previously revealed four of the people who’ve been cut: Arnaud Droitcourt, head of Asia Pacific equity trading; Wang Bing, a China investment banking MD; Patrick Steinemann, co-head of Asia industrials banking; and Andrew Brown, an MD covering top clients. BAML would not comment on the redundancies.
“The timing of these cuts relates to the fact that BAML, having delivered its bonuses, had hoped there would be a number of bids for people it thought might leave of their own accord,” says another headhunter. “Those bids didn’t appear, so the bank has taken its own action.”
A third recruiter, again speaking on condition of anonymity, adds: “The BAML reductions seem sensible, they aren't that big, and are similar in numbers and motivation to those being made by J.P. Morgan and Morgan Stanley in Asia. They are either MDs who are perceived – correctly or incorrectly – as underperforming, or they are directors/EDs who the bank doesn’t think it will promote because they’re not strong client-coverage people.”
Christian Brun, Asia managing partner at search firm Wellesley Partners adds that while US banks are cutting more bankers than this time last year, the scale of their layoffs isn’t nearly as large as in the post financial-crisis period of 2008 to 2011.
“They’re not cutting into the bone or muscle; it’s mainly good housekeeping – trimming those on the margins. Only second-tier firms like Barclays, Macquarie and Stan Chart have made strategic pullbacks and to all intents capitulated as serious competitors in the Asian IB business,” says Brun.
The BAML cuts also reflect a wider trend of banks culling experienced staff. “Senior investment bankers are vulnerable from a cost perspective,” says ex-Jefferies trader Warwick Pearmund, now a senior consultant at search firm at Bo Le Associates in Hong Kong. “Banks are cutting back on MDs and directors and piling more workload – including client-facing work – onto VPs.”
Former BAML bankers face a tough job market, particular in Hong Kong, unless they speak Mandarin and have M&A experience helping Chinese corporates expand overseas. “They’ll get jobs eventually, but probably not at large tier-one US banks,” says Brun.
“Chinese banks are hiring and a lot of senior bankers have also gone into commerce over the last couple of years,” says Pearmund. “The rise of firms such as Alibaba in the PRC has seen big demand for in-house corporate finance professionals and they have paid very large salaries to secure them.”
“It’s all about China M&A now,” adds the second anonymous headhunter. “But unfortunately most of the people being hit in this redundancy round don’t have this expertise and can’t be easily injected in to a China situation.”
Image credit: Aidon, Photodisc, Thinkstock