BankAm to exit M&A, equity advisory in India

Our Banking Bureau

Mumbai, June 6: BANK of America (BankAm) on Wednesday stated that it will exit from certain specific investment banking activity, namely mergers and acquisitions, and equity advisory. The bank will continue to be an active player in quasi-equity, debt and structuring transactions.

The move is part of BankAm’s global decision to exit these business in the emerging markets of Asia, Latin America, and eastern-Europe.

BankAm has 3,000 staff in 12 Asian countries, and out of this 55 will be affected. A few of the affected staff are seen being offered job opportunities in BA’s debt unit.

Said Singapore-based president of Bank of America Asia, Colm McCarthy: “We will maintain investment bankers to handle client relationships for its debt capital raising businesses”.

The two product lines that BankAm now seeks to exit contributes around two per cent to overall revenues in Asian region. He was of the view that such a call was taken after prioratising business, and added that BankAm in India has done very well within the fraternity. Mr McCarthy said BankAm began to review its Asian operations in the beginning of the year, and the staff cuts are part of a 24-month strategy to focus the bank’s Asian business in debt capital markets, which includes project finance and leasing, global markets including derivatives and inter-bank trading, and working capital products such as trade finance, foreign exchange and electronic banking. He added that the bank was also looking to build-up local currency debt market securities capabilities in Hong Kong and India.

Mr McCarthy was clear that material conditions, going ahead, will make the bank review its operations on a periodic basis.

Meanwhile, speaking to local media, BankAm (India) country-manager, Vishwavir Ahuja, was categorical that the bank was bullish on doing business in the country. He cited recent moves on its part to set up a 100 per cent subsidiary — BankAm Securities — which is to be capitalised at $50 million with the amount to be bought in tranches over the next couple of years. BankAm Corp also has its proprietary equities arm and a deemed foreign institutional investor in the country, BancAmerica Equity Partners. It has been gathered that this outfit has got a higher exposure ceiling of nearly $150 million now to invest in India.