CHICAGO, Aug. 22, 2011 /PRNewswire/ -- Zacks.com announces
the list of stocks featured in the Analyst Blog. Every day the
Zacks Equity Research analysts discuss the latest news and events
impacting stocks and the financial markets. Stocks recently
featured in the blog include: Bank of America Corp. (NYSE:
BAC), The Blackstone Group (NYSE: BX) Toronto-Dominion
Bank (NYSE: TD) Bank of New York Mellon Corp (NYSE: BK)
and State Street Corp. (NYSE: STT).
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Here are highlights from Friday's Analyst Blog:
Looming Layoffs at BofA
Bank of America Corp. (NYSE: BAC) is planning to retrench
3,500 workers this quarter as the company is fraught with its
$1 trillion problem-loan portfolio.
The ongoing economic and market instability further compounded the
quandary.
Thousands of additional layoffs could ensue in the upcoming
quarters as the company is working on a broader restructuring plan
to recover its financial position, the Wall Street Journal
reported on Friday following communication with BofA employees.
According to the source, though BofA is still in the discussion
phase about the extent of the job cuts, the number might go beyond
10,000 as part of a wider review.
BoA was one of the biggest victims of the 2007 housing bubble.
Its share price has plummeted about 85% since then. Despite taking
several restructuring initiatives, the company has still not been
able to come out of the crisis.
BofA has relentlessly tried to realign its balance sheet in
accordance with the regulatory changes post meltdown to remain
afloat. In fact, BofA remains committed to shed its non-core
assets, even after repaying the bailout money it had taken as part
of its participation in the Troubled Asset Relief Program.
Primarily, the company has been selling non-core assets to
strengthen its capital position to reinstate dividend hike, meet
new international capital standards, focus on corporate borrowers
and U.S. retail clients as well as strengthen investment
banking.
BofA is also in the initial of talks with The Blackstone
Group (NYSE: BX) to sell real estate assets held by its Merrill
Lynch unit for nearly $1 billion.
Moreover, early this week, the company agreed to sell its
Canadian credit-card unit to Toronto-Dominion Bank (NYSE:
TD) for $7.6 billion. Non-core asset
selling is not a recent action. BofA shed a number of non-core
assets earlier this year and in the last.
Among others, last week, Bank of New York Mellon Corp
(NYSE: BK) said that it will cut about 1,500 jobs, which represents
about 3% of its total workforce. Also, on July 19, State Street Corp. (NYSE: STT)
said that it would reduce 850 technology jobs through layoffs and
outsourcing.
Overall, until revenue generation revives, a hideous
cost-to-income ratio will continue to force many more banks to
reduce costs through job cuts as they need to maximize profits in
order to boost capital ratios. Of course, everyone will now keep
their eyes on the weakly performing firms that have not yet
announced job cuts. But we expect job cut announcements from many
other banks in the near term.
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