Bank of America Corp., the biggest U.S. lender, dismissed 13 investment bankers in its industrials group, including managing directors David Iwan and Egan Antill, said two people with direct knowledge of the actions.
Iwan and Antill left this month during a round of 3,500 reductions throughout the Charlotte, North Carolina-based company, said the people, who declined to be named because personnel matters aren’t public. The cuts amount to about 5 percent of jobs in the group, one person said.
Chief Executive Officer Brian T. Moynihan is trimming staff as costs from soured mortgages rise and revenue shrinks amid the slowing U.S. economy. The industrial group cuts weren’t part of Moynihan’s broader cost-cutting plan known as Project New BAC, announced earlier this month, which will eliminate 30,000 jobs over the next few years, said one of the people.
Iwan worked on financing transactions for companies including Kennametal Inc., a machinery parts maker in Latrobe, Pennsylvania, according to regulatory filings. Bankers who cater to industrial firms such General Electric Co. or Ingersoll- Rand Plc sell services including merger advice and underwriting.
Bank of America is ranked second in the U.S. and globally in industrial-firm fees, according to Dealogic, an information and consulting service. Kerrie McHugh, a bank spokeswoman, declined to comment on the dismissals. Efforts to reach Iwan and Antill by e-mail and telephone weren’t immediately successful.
The industrials group provides financing and advice through two units. One is run by John Pratt and includes shipping, aerospace, defense, cars, machinery and tools. The other, run by Greg Kelly and Mitch Theiss, covers chemicals, mining and paper.
Mergers and acquisitions of industrial companies accounted for about 15 percent of all M&A activity in the last decade, according to data compiled by Bloomberg.
Deeper job cuts may loom for the firm’s investment bankers. The 30,000 reductions announced so far affect consumer, credit- card and back-office operations. Moynihan, 51, will next tackle expenses in global corporate and commercial banking, areas overseen by co-Chief Operating Officer Thomas K. Montag, 54.
That effort starts next month and ends in April, the firm said.
Bank of America has lost almost half of its market value this year amid concern that costs tied to the 2008 takeover of subprime lender Countrywide Financial Corp. will force the company to sell stock to bolster capital.
Banks are cutting jobs at the fastest pace since 2008. HSBC Holdings Plc, Europe’s largest bank, said last month it will eliminate 30,000 positions by the end of 2013 to curb the cost of rising salaries and to prepare for stricter capital rules. Lloyds Banking Group Plc said it would trim about 17,000 positions.