Employment in the financial-services industry fell to 7.61 million workers in August from a peak of 8.35 million in December 2006, according to the Bureau of Labor Statistics. Regional lenders probably can’t pick up many of the new round of castoffs, as smaller banks trim expenses to counter slowing revenue growth, said Kevin Fitzsimmons, an analyst for New York- based Sandler O’Neill & Partners LP.
“It’s a tough time,” Fitzsimmons said. “Everyone is scrutinizing their expense base. If that trend is going on across the industry, I wouldn’t jump to the conclusion that there’s a home for all of these folks.”
The first phase of Bank of America’s overhaul, named Project New BAC after the company’s stock ticker, focuses on consumer banking, credit cards, home loans and technology, Moynihan said today at an investor conference in New York. The effort will slash about 18 percent from the company’s $27 billion in consumer-related expenses, he said.
Consumer banking
The earliest cuts will target consumer banking and support staff such as human resources, according to the bank.
A prolonged low interest-rate environment and slow economic growth are squeezing margins while loan demand slows, forcing branch closings and job cuts at both the biggest banks and among regional lenders.
Regions Financial Corp., based in Birmingham, Alabama, plans to consolidate about 40 branches later this year to focus on “productivity and efficiency initiatives,” CEO Grayson Hall said in July. Atlanta-based SunTrust Banks Inc. is targeting $300 million in expense cuts through 2013, partly by providing some services with “fewer people in the future,” CEO William Rogers said on a conference call that month.
“There’s probably not a long list banks you can think of to say, ‘They’re hiring,’” Fitzsimmons said. “It’s very selective. Otherwise, some of those people might have some time to wait until things get better.”
Wells Fargo
