Are people really going back to BofA Merrill now?

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In the midst of last year's exodus from BofA Merrill Lynch, various reasons were put forward for the heavy outflow of senior bankers.

Most frequently given was the difference in culture between the two banks. For example, BofA Merrill's back office was said to be <a href=""overly bureaucratic, with the result that Merrill Lynch traders became frustrated at its 'slow and stupid ways'. Separately, Merrill's M&A bankers were said to be peeved at BofA's tendency to spike deals involving companies it had lent money to and was therefore conflicted over.

In one big way none of this has changed: despite speculation that Merrill might be spun out of BofA when the Volcker Rule was first aired, the two banks are still very much entwined.

However, there are also signs that BofA and Merrill may be functioning a little more synergistically. Despite the complaints from Merrill's M&A bankers, the combined banks ended 2009 fourth for deal making globally according to Thomson Reuters, down only one position from 2008; in Europe they went from 3rd to 5th.

BofA Merrill has also been keen to dispel any notions that it would be paying badly as a result of the controversy surrounding Merrill's 2008 bonuses. When we wrote in January that some legacy Merrill bankers were expecting little or nothing, we received a swift rebuke from the press office; it subsequently emerged that the average bonus would be $400k, seemingly putting BofA Merrill on a par with high payers like Goldman and Deutsche.

Is all of this enough to entice departed bankers back to the fold? Yesterday it emerged that two former ML bankers are returning as vice chairmen of investment banking. Are the hundreds of other defectors about to return?

Maybe not. Although BofA Merrill is said to be hiring in both M&A and fixed income - where it lost the largest number of people - headhunters say the appetite to go back is likely to be weak.

This is partly because other banks are also hiring in these areas and are likely to be seen as preferable to BofA Merrill, where headhunters say an element of "structural uncertainty" remains. But it's also because many of those who left haven't looked back. "I took several people out of BofA Merrill last year and they were all delighted to go," says one fixed income headhunter. "They had absolutely no regrets and haven't expressed any since."

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