As BofA moves bankers to Paris, London staff look for new leaders
He has not migrated yet. As of today, Bank of America is said to have moved the new heads of its securities business to Paris, but Luigi Rizzo, BofA's head of investment banking for Europe, the Middle East and Africa, is in London until the end of March. In Paris, Rizzo's focus will be on investment banking in the newly decoupled EU. In London, BofA's UK-based investment bankers are already going through a period of change.
In the past five months, BofA's investment banking business has lost two of its most heavyweight staff. Christian Meissner, head of the corporate and investment bank, left in September 2018. Meissner was officially based in NY but was often present in London. Then Diego De Giorgi, the London-based global head of investment banking, left last month. In the wake of De Giorgi's departure, BofA appointed two new heads of investment banking, Jack MacDonald and Thomas Sheehan. Two new leaders, but unnervingly for bankers in London both are based in the U.S.
As Bank of America looks to regain market share in M&A globally, some London bankers say the business is increasingly skewed towards New York. "M&A at BofA is really run by Patrick Ramsey and Steve Baronoff in New York," claims one senior observer. "It feels like a domestic U.S. business, with all the major decisions made in New York, especially with regards to risk."
Risk has become an increasingly important variable in Bank of America's investment banking division ever since the bank made a $300m loss on its dealings with South African furniture maker Steinhoff International in 2017. Following the loss , Bloomberg reported that the bank scrapped “years-long” plans to expand key lines of business within its investment bank. This is thought to have contributed to last year's 26% reduction in BofA's global M&A revenues at a time when most other banks enjoyed double digit rises.
The bank is trying to make amends. In November 2018 the Financial Times reported that Meissner's replacement Matthew Koder planned to hire up to 50 managing directors globally, plus the mid-level staff to support them. In fact, the new staff may focus on U.S. mid-market clients: BofA CEO Brian Moynihan said in December that the bank had, 'left a hole in its high-end midsize deals coverage in U.S.', which contributed to last year's shrinking revenues.
Some London insiders suggest that BofA needs to pay attention to its UK-based business as it recruits too. Although Sheehan was previously based in London and is expected to spend time in the City under the new regime, it's suggested that BofA's London business needs more tlc at a senior level as the bank seeks to gain share in EMEA. Last year, BofA ranked 7th for European M&A according to Dealogic, down from 5th in 2017. In the UK, it ranked 10th, down from 4th a year earlier.
Bank of America declined to comment for this article, but the need for new talent at the top of the London business can be questioned. - London-based co-head of global M&A Adrian Mee has been with the bank for nine years, while head of EMEA corporate and investment banking Jim O'Neill has been there for 23. Last year the bank made numerous senior hires, including Severin Brisnay who joined in May from UBS as head of M&A for EMEA and Matt Cannon, who joined from Morgan Stanley in February as head of investment banking for the UK and Ireland. BofA's name was on some major deals, including Comcast's $39bn acquisition of Sky - the largest ever competitive UK offer.
Even so, the rankings slippage suggests that BofA's London bankers have more work to do. Their enthusiasm may not be helped by what some headhunters claim were low bonuses for M&A bankers in London for 2018. In 2017 (the last year for which pay figures are available), average compensation for Bank of America's material risk takers (including traders, bankers, and senior control staff in London) was below that of other U.S. investment banks in the City. "We've slipped down the rankings in terms of pay," says one senior insider.
A headhunter says BofA's London bankers are undaunted: "They had their expectations well-managed for 2018 bonuses and were expecting the pool to be down." As the bank restructures because of Brexit, 2019 holds potential - both for new recruits and for a recovery in the league table.
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