Bank of America on hiring spree to bolster Asian investment team

Hong Kong — Bank of America (BOA) will recruit about 50 bankers for its investment team in Asia in 2020, as it pushes to bulk up its deal-making business and shore up revenues from the unit globally, three people with direct knowledge of the matter said.

BOA’s Asia headcount expansion comes against the backdrop of a subdued recruitment outlook for the broader investment banking business as global lenders grapple with cost pressures and slowing mergers and acquisitions (M&A) momentum.

A third of BOA’s new hires in Asia will be senior bankers, including MDs, for its M&A advisory and capital markets businesses, mainly in Hong Kong, Singapore and Australia, the people told Reuters.

BOA’s hiring tally for the year could change depending on the deal-making’s momentum, said two of the people, who spoke on condition of anonymity as the plans are still confidential.

Deals involving Asia-Pacific firms worldwide fell in 2019 amid the US-China trade war and tighter regulatory scrutiny. But after a phase-one agreement between the world’s two biggest economies, trade tensions have eased, which should bode well for deal-making.

Bankers see Chinese state-owned companies playing a major role in deal-making in 2020, and expect large floats, including a potential listing of Ant Financial, an Alibaba affiliate, to buoy capital markets activity.

A BOA spokesperson in Hong Kong declined to comment.

“The bank’s coverage footprint [in Asia-Pacific] is smaller than bigger rivals,” one of the three people said, adding that BOA’s hiring has to increase to reduce the gap in coverage of industrial sectors and clients in the region.

Investment banking focus

BOA’s recruitment drive for the investment banking unit comes as it struggles with falling market share and revenue, as well as a string of departures of senior leaders in the US and Asia in the recent past.

The Wall Street bank promoted its Asia-Pacific president Matthew Koder to global head of corporate and investment banking in late 2018 and tasked him with revitalising its corporate and investment banking business.

Koder, an Australian who started out at Goldman Sachs in the mid-1990s, has made significant changes to the business in the past year and stepped up hiring in the bank’s home market, as well as in Europe.

In Asia, senior hires in 2019 included Patrick Steinemann, who came on board as BOA’s head of industrials investment banking team, while Monica Chang joined the China coverage team from Deutsche Bank.

Overall, BOA expanded its investment banking headcount in Asia last year by hiring about a dozen senior bankers, making it one of the most aggressive recruiters among other global banks in the region, one of the people said.

The bank posted a 9% rise in investment banking fees in the fourth quarter ended December to $1.5bn on higher income from debt and equity underwriting deals.

With the renewed focus on investment banking, BOA is aiming to break into the top four of the Asian M&A and capital markets advisory league tables in the next few years, the people said.

BOA was third in the Asia-Pacific, including Japan, M&A advisory league table in 2019, while it stood ninth in the equity capital markets and did not feature in the top 20 debt capital market rankings, according to Refinitiv data.

Reuters