US merger brings uncertain future for BoA/ Fleet FX staff

Analysts and recruiters said FleetBoston’s strengths in foreign exchange lie in its coverage of mutual funds in New England, and in the Latin American business it inherited from BankBoston after the Fleet/BankBoston merger in 1999.

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.