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BofA’s Moynihan: Trading unit faces further cost cuts

Bank of America, the second-biggest U.S. lender, will have to reduce expenses further in its markets trading division unless revenue improves, CEO Brian Moynihan said Wednesday in New York.
Bank of America, the second-biggest U.S. lender, will have to reduce expenses further in its markets trading division unless revenue improves, CEO Brian Moynihan said Wednesday in New York. ogaines@charlotteobserver.com

Charlotte-based Bank of America, the second-biggest U.S. lender, will have to reduce expenses further in its markets trading division unless revenue improves, CEO Brian Moynihan said.

“If the environment stays sort of flattish, less volatility, we’ll have to keep working that expense base down,” Moynihan said Wednesday at a conference in New York. “We’ve got to probably work it down again in the next couple of years if the business stays where it is.”

Global markets, the firm’s trading operations overseen by Chief Operating Officer Thomas Montag, posted a 28 percent drop in first-quarter profit to $945 million on declines in fixed-income trading revenue at the bank.

The bank houses global markets employees in the Charlotte area and elsewhere, but it declined Wednesday to disclose how many work in specific markets.

Revenue in the bank’s fixed-income, currency and commodities sales and trading division decreased 7 percent to $2.75 billion on declines in credit and mortgages. That trailed JPMorgan Chase & Co.’s 5 percent increase, and compared with estimates of $3 billion from Nomura Holdings Inc.’s Steven Chubak and $2.9 billion from Macquarie Group Ltd.’s David Konrad.

The biggest parts of Bank of America’s fixed-income trading business are credit, mortgage and municipal trading – areas that weren’t active in the first quarter of 2015 compared with a year earlier, Chief Financial Officer Bruce Thompson said last month.

Staff writer Deon Roberts contributed.

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