US merger brings uncertain future for BoA/ Fleet FX staff
Bank of America’s (BoA) $47 billion purchase of FleetBoston Financial should bolster its regional US coverage in foreign exchange. But an overlap in jobs is unavoidable with a bank the size of BoA, analysts told RiskNews ' sister publication FX Week , and the outlook is uncertain for staff at both firms.
Bank of America’s forex coverage is also likely to extend to Boston-based mutual funds, said David Gilmore, partner at FX Analytics in Connecticut. It is expected that BoA will not have the risk appetite to take on FleetBoston’s considerable exposure to Latin American markets. Although BoA does still maintain a significant presence in Mexico, it has scaled back its foreign exchange activity in Brazil and Argentina, following last year’s poor performance and volatility.
Outside the US and South America, BoA’s forex group dwarfs FleetBoston’s. In London, it has 60 trading, sales and research staff compared with Fleet’s six. In Asia too, BoA has a greater presence, although Fleet would not give details of its activities in the region.
As yet, no decisions have been made about management in foreign exchange, although BoA’s Ed Brown will continue in his current position as president of global corporate and investment banking following the completion of the deal, the bank said. Staff at both banks were cautiously optimistic regarding the merger. One sales analyst said, "We are very positive but there is mixed confidence over our jobs."
The stock-for-stock transaction is expected to close in the first half of 2004, subject to regulatory approval.
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