Demise of BAML?

GoldmanGekko's picture
Rank: Baboon | banana points 167

I'm sure you have seen it. Articles everywhere the past few days including WSJ and FT. BAML falling in league tables, bankers leaving constantly, bad hierarchy and no autonomy, etc.

Thoughts? Would you be happy going to BAML while this is going on? Discuss

Comments (61)

Oct 16, 2018

They're still a solid mid BB and I don't see it changing in the near future

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Oct 17, 2018

Interested. Bump

Oct 17, 2018

Well, at least on the pub fin investment banking side, they're #1 and it's not even close. Also constantly in the top 5 from what I've seen in corporate DCM. Someone on the corporate IBD side will probably be able to give more clarity on how that's going. Source: Bloomberg League Tables

Oct 18, 2018

Debt powerhouse. Lower DCM comp vs last year given some blockbuster deals but that will change given Comcast and other transactions. If you want to do debt BAML is definitely one of the very best places to be amongst the BBs.

M&A performance is team/industry dependent but seems that where it matters (consumer/tmt) they have fallen behind. Turnaround there may be tough as you need to poach bankers from MS/GS/boutiques. Part of strategy is to maximise on financing firepower for now (lead bridges/acquisition financing) and eventually get a seat on tables. But again depends on industry.

In short - almost no better place to be if you want to do debt (IG/HY/private placements/securitizations) but M&A experience may be a lot more pitching than execution depending on team. ECM is ok. Still a great place to work - solid culture generally. New head of banking may shake things up for the better.

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Oct 18, 2018

Any summer analysts declining offers from BAML? I don't think this should scare people off.

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Oct 18, 2018

This is greatly exaggerated - for big banks like BAML, JPM, MS, GS, etc., the deal flow and analyst / associate experience year-to-year doesn't really vary that much (short of a recession)...

These places get so much deal flow (and do a lot of pitches) that bankers are still going to be busy... from the junior perspective it doesn't really matter if a few senior folks leave.

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Oct 18, 2018
HBS-fritada:

This is greatly exaggerated - for big banks like BAML, JPM, MS, GS, etc., the deal flow and analyst / associate experience year-to-year doesn't really vary that much (short of a recession)...

These places get so much deal flow (and do a lot of pitches) that bankers are still going to be busy... from the junior perspective it doesn't really matter if a few senior folks leave.

Agreed - doesn't change much, at least for the time being. Would still take a BAML offer over pretty much anything else (bar GS, MS, JPM out of the BBs) for those who have a decision to make.

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Oct 18, 2018

They have 104MM customers. I can imagine that many people all trying to close their accounts at once would cause something like this...

If I had asked people what they wanted, they would have said faster horses - Henry Ford

Oct 18, 2018
happypantsmcgee:

They have 104MM customers. I can imagine that many people all trying to close their accounts at once would cause something like this...

I threw monkey pewp at u bc this is a serious thread

Oct 18, 2018
happypantsmcgee:

They have 104MM customers. I can imagine that many people all trying to close their accounts at once would cause something like this...

I could imagine that an inordinate amount of people would pull money out based on the fee. Have you seen what's one the front of Google news and what CNN talks about every 10 minutes. The fee. It's enough for the average Joe to pull their money out, based on principal and/or financials.

Oct 18, 2018

They're definitely screwed.

I'm closing my $463 account tomorrow morning.

twitter: @CorpFin_Guy

Oct 18, 2018

I'm staying put, I want to see what a check from the FDIC looks like.

Oct 18, 2018

Yeah, the website is down so they're definitely going bankrupt. Do you know how ridiculous that is?

Oct 18, 2018

Buffett invested in the company.

Oct 18, 2018

YES. $450b in cash is useless if they can't hold onto to several thousand accounts, each with total balances hovering around $127.50. I bought some of those things that make money if the stock goes down (silently to self: call = up, put= down) PUTS! That's it. Puts.

-go4it

Oct 18, 2018

People are probably just pissed about the debit card charge.

Oct 18, 2018

BAC is fucking INSOLVENT! what is so hard to understand? Theyre liquidating assets, cutting workforce, cutting bonuses, and shifting costs onto customers.....ask yourself why are they doing this.

Oct 18, 2018

So who actually closed an account of them? Not those 127.50 ones, but the ones with good money in them.

Oct 18, 2018

I closed my account last week, it wasn't huge by any means but well above 127.50. It wasnt my primary account, BACs customer service blows, their fee structure and rates sucks compared to my other banks and since i don't use them for all my services I worried about getting hit with an ever increasing list of fees. My atm card got declined for suspicious activity last week when I tried to withdraw the exact same amount I always take out of the exact same ATM I always use and that was the last straw.

Oct 18, 2018

I'm thinking of closing my account not because of the fees but because I no longer live in Boston so the benefit of having a local bank is no longer there. Are there any banks out there with a strong U.S. and International presence? I'm thinking Chase. Any thoughts or experiences?

Oct 18, 2018
CompBanker:

I'm thinking of closing my account not because of the fees but because I no longer live in Boston so the benefit of having a local bank is no longer there. Are there any banks out there with a strong U.S. and International presence? I'm thinking Chase. Any thoughts or experiences?

I love Charles Schwab's Investor Checking. It's interest bearing, and has free ATM use anywhere domestically or abroad I believe. Not to mention you can deposit checks from your iPhone or Android. I've been with them for years and am incredibly happy - great customer service, and have never once been hit with a BS fee.

Oct 18, 2018

if this does indeed happen, how much shit goes down when obama tries to bail them out?

yellow t-shirt

Oct 18, 2018
LancelotLink:

if this does indeed happen, how much shit goes down when obama tries to bail them out?

When they had their long term senior debt downgraded by Moody's several weeks ago it was warning sign that the bank will NOT be bailed out.

Fool me once shame on me. Fool me twice....

Here's the thing. If you can't spot the sucker in the first half hour at the table, you are the sucker.

Oct 18, 2018

It's always smart to make sure you stay under the FDIC limits, but I don't think any of us have to worry about that. So I think it's irresponsible to try and foment a panic on Bank of America.

People should close their accounts at national banks in general because they treat their customers like dirt and assume they all have two digit IQs. My local bank charges me no fees for my checking account as long as I maintain a $2000 balance ($1/month if I go below.) While big banks charged me $2 merely to check my balance with them at a foreign ATM, my local bank charged me nothing for my transactions. Two months ago, they even started refunding up to $10 of ATM-side fees every month.

Folks who work in this industry are all intelligent people with money. You deserve a better bank than a major national firm. Go local or go with a credit union.

There's no political will to bail out the banks. Obama will wind up like Nixon if he does- the Republicans will all vote for impeachment and instead of Barry Goldwater coming to him and saying he's lost his conservative base, it will be Bernie Sanders. I do think a major bank bankruptcy will give the Fed license to provide more monetary stimulus and prevent The Second Great Depression from being worse than the first.

Oct 18, 2018

Was going to post a separate topic about this but the discussion's already heating up here.
Would you accept an offer right now from BoA versus lesser known banks or boutiques?
Anyone know what's going on with bonuses/ job offers at the junior level?

Oct 18, 2018

From a investment banking perspective, I'd feel safe wihin the traditional IB lines of business at BAML...certainly more than MS which is facing stock pressure just as painful but which lacks the ability to cut heads outside of IB. I think C is also a dangerous place since, but for the insane 10x split, the stock would be damn near $1.

Merrill is performing extremely well (look no further than the recent NYT article lamenting the strength of Merrill v. the weakness of the bank at large). They are currently 2nd in total fees only to JPM (from the same article).

Bottom line is that no where seems safe in the current environment but at least BAML has already made the cuts that will be made in many of its IB-related groups (almost all of which came at the VP level and above from what I've heard). It also has the breadth of business to cut a lot of costs without impacting the IBK further.

As for losing accounts, I think it is happy to lose some deposit base in exchange for the cost savings that will come from eliminating jobs related to maintaining said deposit base. Many of the accounts subject to the $5 aren't worth keeping and many that would not otherwise be worth their time will pay the fee. Plenty more aren't even subject to it.

Oct 18, 2018

What about online savings accounts that pay 1%, that's pretty good. Anyone has those accounts? I am considering it.

Oct 18, 2018
MrLove:

What about online savings accounts that pay 1%, that's pretty good. Anyone has those accounts? I am considering it.

I've had an account with ING Direct for several months now. No problems.

Oct 18, 2018

If it's FDIC insured, it's probably pretty darned safe. NEVER stick more than $250K in unless you have to, and only then, do it with an extremely safe, boring custody bank.

Oct 18, 2018

Lehman's bankruptcy was somewhere north of $600b and that caused a shit storm, so I am pretty sure $1.5T would be cataclysm. Not going to happen though. They aren't insolvent....that's bullshit. Taking buffets investment was stupid. Countrywide is what is causing them to raise excess capital, but it's ultimately containable. Glad the FHFA picked such a great time to mount suits against the banks.....really showing how stupid our government is. I would bet they are going to return to those 09 lows near $4.

If for some awful reason they do go under, I am walking down the street to the BAML branch with a crowbar and going to town on an ATM because it's not going to matter anymore.

"I'm short your house"

Oct 18, 2018

Is it possible that BofA actually wants to shrink its deposit base? Maybe they added the fee in order to push some accounts away. I am not sure about this, but doesn't more deposits mean that a bank needs to have more capital? With rates so low banks aren't making shit on the deposits anyway.

"One should recognize reality even when one doesn't like it, indeed, especially when one doesn't like it." - Charlie Munger

Oct 18, 2018

I bank with Ally.com. Landed a 3.15% 5-year CD with a ridiculously small 60 day early withdrawal penalty.

Online banks are great for CDs, though I still use my local bank for checking.

Oct 18, 2018

Even if BAML wanted to shrink their deposit base for whatever reason, now would not be the right time.They imposed the $5 fee to offset any loses created from the new Dodd-Frank cap on debit card charge fees. Having a strong deposit base will shield them from what Morgan Stanley is feeling with short-term lending if anything.

I love seeing Durbin rail on BAML over this new charge as if they are pulling the carpet out from under everyone. That's reckless behavior at the worst time. It's $5 bucks.....I probably lose more in shoe leather walking across the street to buy booze. Having a senator run his mouth about something he knows nothing about doesn't help anyone. Durbin should go fly a kite. Getting a degree in politics and then playing off 20 minute briefings on economic/financial matters as intimate knowledge just makes you a dumbass who should get hit by a car on Pennsylvania Ave.

"I'm short your house"

Oct 18, 2018

The National banks tried to make a political statement and folks are voting with their feet. Oh well, the credit unions and local banks will be thrilled to pick up more customers.

Oct 18, 2018

Also, this new fee amounts to $60/year. Consider all the other random shit Americans spend $60/year on - dinner and drinks out ONCE, 2 weeks of cell phone service, etc. People are fucking crybabies. Go back to carrying cash if you don't want the convenience of plastic.

Oct 18, 2018
CaptK:

Also, this new fee amounts to $60/year. Consider all the other random shit Americans spend $60/year on - dinner and drinks out ONCE, 2 weeks of cell phone service, etc. People are fucking crybabies. Go back to carrying cash if you don't want the convenience of plastic.

Point being, if AT&T made some change that made your cell service $60/year more expensive - do you think we'd have a mob outside their headquarters? Of course not, people would either suck it up, or switch carriers and move on with their lives, because that's how capitalism works.

The extent to which the general public feels totally entitled to completely free and nationally available banking services is ridiculous.

Oct 18, 2018

Senator Durbin from the completely non-corrupt state of Illinois has urged customers to leave the bank and accused them of "overt attempt to profit off of its customers".

1.) A senator (congressman i might expect) using his pulpit to discourage commerce with a private company literally makes me want to send him an invite to drive a convertible through Dealey Plaza in Dallas.

2.) He almost successfully defined revenue...though seems to have a problem with it.

Oct 18, 2018

People drive for miles and miles to Wal-Mart to save $5 on a box of lightbulbs. I don't know about you, but I'd switch accounts for $5-10/month. Actually I did that three years ago. Thrifty folks know that money is made and saved on nickels and dimes.

Bank of America's website is going down because people are closing accounts. As you probably know Comp, databases are indexed and optimized for day-to-day transactions; folks reading from it, ATMs signing in to charge withdrawals against the account, ACH signing in to recognize checks and deposits, etc. It is not optimized for 100,000 people to close their accounts on the same day.

There are a lot of unemployed people who are a heckuvalot thriftier than me and have nothing better to with their time than to close their Bank of America checking account. And that's what they're doing and that's why Bank of America is so busy.

The national banks are not the same as Amazon. They are more like Montgomery Ward's and Sears. Wal-Mart can sell a $10 box of lightbulbs for a 50 cent markup. Bank of America can't do the same, and that's why it's losing accounts to Ally and the credit unions.

During every generational crash, the old order of the world gets too complacent and dies. GINIs and Herfindahl indices always find a way to collapse, and we are seeing that happen now. There's no political will to bail out the banks at this point- as long as the protesters are there making it onto CNN every night- and it looks like 2008 all over again this time without government support. Bernanke was able to delay and moderate the Great Depression for three years; now we are entering the second half which I think will be more difficult than the first but still a lot better than the 30s.

Oct 18, 2018

BEAR STEARNS IS FINE

Oct 18, 2018
zeropower:

BEAR STEARNS IS FINE

:)

Oct 18, 2018

That it...Bank of America ...has failed.

Oct 18, 2018

Buffett can't go wrong.

Oct 18, 2018
Big S. D.:

Buffett can't go wrong.

Solomon Brothers or Berkshire Hathaway (when they just made coat liners).

"One should recognize reality even when one doesn't like it, indeed, especially when one doesn't like it." - Charlie Munger

Oct 18, 2018

BoA sucks. Worst bank ever for charging retarded fees on debit card.

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Oct 18, 2018

They weren't on Glencore-Xstrata, which is dominating the league tables just like AT&T-Deutsche Telekom did last year. They'll be back in the top eight by the end of the year.

Oct 18, 2018

You know you're a fucking boss when you can crack the top 10 in global M&A by YOURSELF.

Check #10: M. Kelin & Co.

http://dealbook.nytimes.com/2012/02/07/former-citi...

Oct 18, 2018
Nouveau Richie:

You know you're a fucking boss when you can crack the top 10 in global M&A by YOURSELF.

Check #10: M. Kelin & Co.

http://dealbook.nytimes.com/2012/02/07/former-citi...

Haha that is awesome. Was wondering what bank that was...

Oct 18, 2018
Nouveau Richie:

You know you're a fucking boss when you can crack the top 10 in global M&A by YOURSELF.

Check #10: M. Kelin & Co.

http://dealbook.nytimes.com/2012/02/07/former-citi...

So sick.

Oct 18, 2018

As the above posters already pointed out, it's solely due to Glencore - Xstrata, which BAML was the only BB left out.

It would be interesting to know what the M&A fee table will look like though, as it seems several of the advisors managed to swing a role at the last minute, which would indicate a significantly lower fee than the core advisors. CS and UBS were added pretty recently to Glencore's side and same with Barcap, which was handed an "equity advisor" role to Xstrata last minute...whatever that means

Oct 18, 2018

because BAML sucks?

Oct 18, 2018

I think they'll be alright...

"For what shall it profit a man, if he shall gain the whole world, and lose his own soul?"

Oct 18, 2018

After being the only BB not to get credit for Glencore-Xstrata, they're the only BB on the Glencore deal with Viterra (the rest are Canadian banks) Is working on two deals for the same client considered a conflict of interest? or is there some reason why baml was chosen for one and not the other?

Oct 18, 2018
audemarspiguet:

After being the only BB not to get credit for Glencore-Xstrata, they're the only BB on the Glencore deal with Viterra (the rest are Canadian banks) Is working on two deals for the same client considered a conflict of interest? or is there some reason why baml was chosen for one and not the other?

Without knowing any specifics, I'd say there can definitely be a conflict of interest. Also, BAML might be earning more money on the Viterra deal than they would if they were on the Xstrata deal with everybody and their grandmother

"One should recognize reality even when one doesn't like it, indeed, especially when one doesn't like it." - Charlie Munger

Oct 18, 2018

Just kidding they posted my payment...apparently when they say today they mean like midnight, not like 5PM. Buttheads. And uh silly me.

"We are lawyers! We sue people! Occasionally, we get aggressive and garnish wages, but WE DO NOT ABDUCT!" -Boston Legal-

Oct 18, 2018