Bank Of America To Cut 30,000 Jobs, Trim Expenses
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From member station WFAE in Charlotte, Julie Rose reports on Bank of America's attempts to cut billions of dollars in expenses.
JULIE ROSE: It's been a slog, a plod, a struggle for Bank of America these last few years, or as CEO Brian Moynihan put it yesterday...
BRIAN MOYNIHAN: The grinding forward of the economy and a grinding forward of consumer spending levels in our businesses.
ROSE: The pressure has led Moynihan to unload big chunks of the bank - its international credit card business, for example.
MOYNIHAN: We've been selling all our non-core assets that we've accumulated over the years.
ROSE: The hope, at the end of all this grinding, is a sharper, more polished bank.
MOYNIHAN: The whole goal here was to make our company more streamlined, more efficient, easier to do business with, both internally and externally.
ROSE: Investors may also have been slightly relieved at the prospect of 30,000 job cuts, since recent speculation had the figure as high as 45,000.
BERT ELY: A lot of this is basically clean up from the mortgage mess and the problems that it acquired when it bought Countrywide.
ROSE: This is Virginia banking consultant Bert Ely.
ELY: And the big question mark with regard to mortgages is: How much is it finally going to cost?
ROSE: Mortgages are the root of Bank of America's woes. Moynihan frequently flashes a slide at these investor gatherings to prove the point. It's a bar chart with five of the bank's six divisions: credit cards, wealth management, deposits, et cetera above the profit line, and one big bar hanging below it.
MOYNIHAN: As you can see, all the businesses we have make money, except for mortgages.
ROSE: Moynihan says the bank has set aside enough money, tens of billions of dollars, to handle the problems, but investors seem to want more assurance. Here's a question Moynihan keeps hearing at these investor conferences.
MOYNIHAN: Can you, or would you bankrupt Countrywide? We'd look at all our options, but we wouldn't discuss them in a forum till we made a decision. But we always look at all our options on everything.
ROSE: Buese says investors are obsessing about Bank of America's cost-cutting and layoff plans because...
NANCY BUESE: All banks, from large to small, are going to have to cut costs over the next few years. The banking industry's got to get smaller. It's just that simple.
ROSE: Banks, on the whole, have too many branches, employees and ATMs for an economy where people aren't spending like they used to, says Buese.
BUESE: So I think that the market is looking at Bank of America as sort of an early warning indicator - if you want to put it that way - of what may be going on in the banking industry, generally.
ROSE: For NPR News, I'm Julie Rose, in Charlotte.
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